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- The Old Bait And Switch Revisited – The Third Time Is The Charm – read now
The Old Bait And Switch Revisited – The Third Time Is The Charm
In 2020, I wrote an article in this publication titled “The Old Bait and Switch” about a GAO decision in the case of Matter of: T3I Solutions, LLC, B-418034; B-418034.2 (December 13, 2019). In that case, the bidder was awarded the contract based on the representation that one of its key personnel would be one of the existing incumbent contractor’s program manager. The problem was, the bidder had not contacted this person and had no reasonable basis to believe that the person would be available to perform on the awarded contract. In sustaining the protest in T3I Solutions, the GAO noted that speculation as to whether someone will be available cannot reasonably support inclusion of an individual in a proposal. An offeror may not represent the commitment of incumbent employees based only on a hope or belief that the offeror will ultimately be able to make good on its representation.
In 2021, I wrote another article in this publication about the GAO decision in Ashlin Management Group, Inc., B-419472.3; B-419472.4 (November 4, 2021), in which the GAO revisited a different angle on “the old bait and switch.” In Ashlin, the offeror became aware that one of its key personnel identified in its proposal was no longer available during the period of certain corrective action being taken in connection with a prior protested award of the proposed contract. The protester argued that the prospective awardee’s bid became technically unacceptable as a result of the loss of the key personnel and the offeror was required to notify the government. The GAO agreed. The GAO noted that under its prior holdings, an offeror or vendor generally is required to advise an agency when it knows that one or more key employees have become unavailable after its bid is submitted but prior to award.
This article today is about the Federal Court of Claims rejecting the rule applied by the GAO in the Ashlin case above. In Golden IT, LLC v. United States, No. 21-1966C, 2022 WL 334369 (Fed. Cl. Feb. 4, 2022), the Court of Federal Claims, in an appeal from a GAO decision, rejected the GAO’s requirement for notification of personnel changes. In Golden, when the bidder submitted its bid, it designated a specific person as one of its “key personnel.” However, after the bid submission, but prior to award, the designated person resigned. The bidder did not notify the government of the key personnel’s departure. The GAO held that the failure to notify the government of the departure rendered the bid unawardable.
On Appeal, the Court of Federal Claims stated that so long as the bidder had a reasonable basis to propose its key personnel for the work at the time of bidding, the fact that the key person later left the company cannot render the bidder’s quote unawardable. The Court of Claims observed that it was unable to locate the basis for the GAO’s change of personnel rule and that the rule “strikes the Court, candidly, as without legal basis and ‘unfair.’” The Court of Claims continued, “[t]he simple facts of biology (illness, injury, incapacitation due to various causes, and death) and the common realities of business life (people retire, quit, or must be laid off or fired) make it unreasonable to expect that offerors will not experience changes in the status of their staffing.”
A proposal is submitted at a point in time and is evaluated over what is often a lengthy period. A court’s assessment of an offeror’s knowledge of facts and representations, however, is made with respect to the point in time at which the offeror submitted its proposal. The Court of Claims stated that it “will not conjure up a rule — and particularly not one untethered from a statue, regulation, or Federal Circuit decision — requiring offerors or quoters to routinely update the government when facts and circumstances change post-proposal or quote submission, during the course of the government’s evaluation period.” In rejecting the GAO’s notice rule the Court noted that it was significant that the solicitation did not require bidders to: (1) obtain commitment letters from proposed key personnel; (2) constantly verify their continued availability and willingness to serve in such roles following award; or (3) update the Agency regarding the departure of employees proposed as key personnel. The Court of Claims did not alter the requirement that bidders must have a reasonable good faith basis for proposing key personnel at the time of bid submission.
If you have questions about your obligations in submitting bids to the government, please contact any member of our Government Contracts Group.