Brand matters in federal procurement.

Brand matters in federal procurement

In the mid 1980s, Pepsi and Coke launched what has become known as the cola wars. Both companies engaged in a fierce battle to persuade the public that they were better than the other. Who won? Neither. People just can’t be persuaded to switch brands, which is equally frustrating for companies trying to sell to the government.

Protesting contractor: Desktop Alert Inc., Chatham, N.J.

Contracting agency: Defense Contract Management Agency (DCMA)

Protest issue: Brand name limitations

Decision: Sustained by Government Accountability Office July 22, 2013

Post-mortem: Contracts seldom last more than five years and often last for much less, and by law, contracts must be competed to the maximum extent possible. That fact left DCMA with a choice: Have a competition or stick with its existing system.

DCMA acquired a warning and notification system in 2009 from Reliable Government Solutions Inc., a Silver Springs-based small business. This contract included software, licenses, phone services and the support services that went along with maintaining the system. When that contract came to an end this year, DCMA decided it wanted to upgrade to the latest version of the same system and issued a limited source justification for the specific brand. In its justification, DCMA gave several reasons for the brand name limitation, determining that Reliable’s system was the only one blessed by the federal government for purchase.

DCMA issued the solicitation, Desktop Alert filed a protest alleging the limitation to Reliable’s system was unduly restrictive of competition because it “fails to describe the salient characteristics of the agency’s requirements” as required by the Federal Acquisition Regulation. Not only was Desktop Alert’s product on the approved list, it provided mass notification services “in the same building where DCMA’s headquarters are located.”

DCMA presented one failing argument after another in response to the protest, including a claim that limiting competition to the one brand would save time and money. GAO pointed out that the FAR “does not cite cost or time savings as a basis for restricting sources.” In sustaining the protest the GAO concluded DCMA had failed to comply with the FAR and therefore the limited source justification was unreasonable.

The irony here is that this is the agency tasked with ensuring that contractors are following the law, not only in its attempt to restrict competition, but also in its refusal to issue a stay during the protest in accordance with the Competition in Contracting. Furthermore, while Desktop Alert showed easily that the agency had failed to follow the law, the GAO simply recommended the agency not award option years and instead recompete the contract at some point in the future.