An example of why protests halt contract performance

An example of why protests halt contract performance

Much to the frustration of some contractors, only in the rarest of times should an agency override the stay of performance that typically comes when a contract is protested. Here I offer an example of why.

Protesting contractor: Clark/Foulger-Pratt Joint Venture, Bethesda

Contracting agency: Department of State

Issue: Whether proposals were technically equal.

GAO decision, July 23, 2012: Sustained.

Post-mortem: In July, FedBiz Daily wrote about the Government Accountability Office’s decision to sutain a protest filed by a Bethesda-based joint venture between Clark Construction Group LLC and The Foulger-Pratt Cos. that halted a $447 million contract to build a new U.S. Embassy in London. At the time, details were murky. Now, with the release of a redacted version of GAO’s decision, we have more information.

Six firms were pre-qualified by State to bid on the opportunity, including Clark/Foulger-Pratt JV and the contract winner Harbert International LLC. Proposals were submitted, and for every evaluation criteria Clark was rated either equal or better than Harbert. Discussions were conducted and revised proposals submitted, which resulted in Harbert’s rating in 6 different areas increasing while Clark’s ratings remained unchanged. The difference in price between the two offers was $5.7 million — 1.2 percent — with Harbert coming in cheaper.

After rating the final proposals, the Technical Evaluation Panel prepared two best value recommendations — unable to come to a consensus on which company deserved the win. Two panel members recommended Harbert, stating that it “offered an equal degree of best value at a lower cost,” while three other members, as well as the non-voting chair, recommended Clark, concluding that its technical superiority and business approach represented the best value. The Source Selection Authority made the determination that the two proposals were “essentially technically equal” and selected Harbert based on the lower price.

That was the wrong decision, according to GAO, which showed in detail in its decision how the two proposals were not even close to being technically equal. Even with the opportunity to explain the decision in a hearing before the GAO, the SSA “provided little detail or substantiation” for the decision.

The biggest mistake that State made though was not to choose the lesser of two bids, but rather to ignore the standard stay of performance that happens amid protest proceedings. One of the biggest advantages to filing a protest with the GAO is that it automatically halts performance, unless it’s not in the best interest of the United States. State exercised its authority to override the stay of performance, instructing Harbert to move ahead on contract work.

That forced the GAO to recommend “without regard to cost or disruption” that the contract be terminated and proposals be reevaluated. And that means State will have to pony up the cost associated with halting and restarting a contract — whether it sticks with Harbert or not.