"arbitrary and capricious"

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The GAO’s decision in BC Peabody Constr. Serv., Inc., B-408023 (May 10, 2013) [pdf] illustrates the importance of establishing prejudice in a bid protest. The protester alleged that it proposed the same subcontractor (Bauer Foundation Corporation) as the awardee proposed on a dike rehabilitation project. Both offerors relied on Bauer for the “cut-off wall,” a critical element of the project. Both proposals showed that Bauer had the required experience for the cut-off wall.

Despite their use of the same subcontractor, the Corps of Engineers nevertheless assigned the awardee and the protester different scores for the cut-off wall element of their proposals. The Corps rated the awardee’s proposal acceptable for both the demonstrated experience and past performance subfactors, but it rated the protester’s proposal unacceptable.  The GAO agreed the Corps’s action was procurement error. “Where multiple proposals propose the same contractor, once the agency becomes aware of that subcontractor’s experience . . . it cannot reasonably assign one proposal a higher score than another based on that experience.” GAO nevertheless denied the protest.

Does an unproven allegation of fraud or an improper termination for default limit a contractor’s ability to seek and obtain new contracts? Not automatically. According to the decision in Afghan American Army Services Corp. v. United States, No. 11-520C (Fed. Cl. Oct. 15, 2012) [pdf], contracting officials are required to conduct their own investigation and get the facts right before determining that a contractor is not responsible. Relying on unsupported conclusions of other government officials to justify a determination of non-responsibility is arbitrary and capricious.

The Army disqualified AAA from receiving a contract for trucking services in Afghanistan because AAA was deemed non-responsible. The determinative factor in the decision was a proposed debarment containing allegations that AAA had forged documents relating to an earlier trucking services contract. AAA had not previously been notified of the allegations and was not given an opportunity to rebut them. Rather than investigating the facts herself, the contracting officer simply assumed that AAA had violated criminal forgery statutes and had failed to take any corrective action.