Adhering to the requirements of a government solicitation is paramount when submitting a proposal. In a recent decision (B-413104.5; B-413104.6) by the Government Accountability Office (GAO), two separate government contractors’ protests were denied for failure to meet the explicit requirements of a solicitation for the Department of Health and Human Services, National Institutes of Health (NIH). The protestors were ultimately challenging their respective elimination from competition based on the fact that the non-responsibility determination should have been referred to the Small Business Administration (SBA) under SBA’s certificate of competency (COC) procedures.
A little background is as follows: Both protesting contractors had chosen to form contractor team arrangements (CTAs) with two other companies. The solicitation expressly required that if an offeror chose to submit a proposal in the form of a CTA, each member of the CTA “must show evidence that it has verification of an adequate accounting system.” The solicitation further explained that the failure to provide such evidence would result in the contractor being eliminated from competition. In order to meet the government’s expectations of evidence of an adequate accounting system, per the solicitation, the contractor must provide one of the following:
- Adequacy determination from DCAA
- Adequacy determination from DCMA
- Adequacy determination from any federal civilian audit agency
- Adequacy determination from an independent third-party CPA
The last option for the verification of an offeror’s accounting system is relatively new to the government contracting world, but is increasingly being utilized by contractors without any accounting system determination by a government agency. The caveat with this option is that the solicitation identifies additional support that needs to be provided. In this case, both contractors had CTA members whom elected to choose this option of verification; meaning, each must submit a form entitled “Adequacy of the Accounting System”. The solicitation specifically required that if the audit was conducted by an independent third-party CPA firm, the form had to be completed on the letterhead of the third-party CPA firm which was verifying the adequacy of the accounting system. Unfortunately, the contractors failed to adhere to the explicit requirements of the solicitation when they submitted the forms, which were not on the respective CPA firm’s letterhead. This requirement was a go/no go; meaning immediate elimination for failing to conform.
Faced with a determination of being non-responsive, and thus disqualified from further consideration and potential source selection, the contractors then tried the more creative route of asserting that “the agency’s exclusion of their proposals based on their failure to submit documentation verifying an adequate cost accounting system for all CTA members amounted to a non-responsibility determination that should have been referred to the SBA for a COC (Certification of Competency).” The GAO found this argument unpersuasive because this was not a matter of responsibility subject to the COC process. Rather, it was a matter of the inability to account for all of the requirements in the solicitation. More and more often, we see contractors being removed from competition for failure to meet the solicitation’s explicit requirements, even those which would seem to be inconsequential. Due to the high volume of offerors, this filtering mechanism is an easy way for the government to shrink the bids, which require more extensive and time-consuming source evaluation and selection.
At Redstone GCI, we have the capabilities to assist our customers in multiple ways throughout the bid process. We generally help with the development and review of the cost volumes, but have the capabilities to review other volumes as well. We also have the capability to timely provide a third-party audit of a contractor accounting system…and we do have and use our own letterhead.
