Government Contracts Inability to Meet Gate Criteria Doomed Cloud Services Protest
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Monday, August 26, 2019

Inability to Meet Gate Criteria Doomed Cloud Services Protest

By Government Contracts Editorial Staff

The Court of Federal Claims ruled in the government’s favor in a challenge to its decision to award a single task order contract for cloud services valued at $10 billion because the protester could not meet certain gate criteria when proposals were due. The protester contended the Department of Defense violated the law when it decided to use a single award for its Joint Enterprise Defense Infrastructure cloud procurement, the gate criteria that led to the protester’s exclusion were improper, and conflicts of interest of certain DoD officials and another offeror prejudicially affected the procurement. However, the court determined the government could enforce the gate criteria, which the protester conceded it could not meet, and therefore the protester could not demonstrate prejudice as a result of possible procurement errors.

Flawed D&F. In reviewing the two single award determinations that applied to the procurement, the court found the contracting officer properly concluded FAR 16.504(c)(1)(ii)(B) prohibited multiple awards because a single award would provide more favorable terms and conditions, including pricing, the expected cost of administering multiple contracts outweighed the expected benefits of multiple awards, and multiple awards would not be in the government’s best interests. However, the DoD Under Secretary’s determination and findings was flawed because it relied on an exception under 10 USC 2304a(d)(3) that did not accurately reflect the structure of the solicitation. Section 2304a(d)(3) prohibits the award of a task or delivery order for more than $112 million to a single source unless the head of the agency makes a written determination that one of four exceptions applies. The D&F applied the exception for a contract that “provides only for firm, fixed price task orders … for services for which prices are established in the contract for the specific tasks to be performed” (§2304a(d)(3)(B)(ii)). The exception applied to the request for proposals, which provided for firm, fixed price task orders for services for which offerors would propose a catalog of prices. However, the D&F acknowledged that, during the contract’s possible 10-year life, services not contemplated at the time of initial award would likely be needed and added through the contract’s technology refresh provision. The refresh provision required the cloud services provider to offer new services at a price not “higher than the price that is publicly-available in the commercial marketplace in the continental United States.” The refresh provision was inconsistent with the requirements of §2304a(d)(3)(B)(ii) because any new services could not be identified as “specific tasks” or priced at the time of award.

No Taint from Conflicts. The court also addressed the protester’s conflict of interest allegations. Although at least two DoD officials negotiated for employment with another offeror while working on the procurement, the record supported the CO’s conclusion the officials’ involvement “[did] not taint the work of many other persons who had the real control of the [procurement’s] direction.” The CO reasonably determined the conflicted government officials did not impact the substance of the evaluation factors or the decision to use a single award approach, and the other offeror did not obtain an unfair competitive advantage or protected information. (Oracle America, Inc. v. U.S., et al., FedCl, 63 CCF ¶81,710)

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