GAO Report on ED Decision Process Pulls No Punches

Yesterday, insideARM reported on the public release of the Government Accountability Office (GAO) decision on protests filed in response to the December 2016 awards of Department of Education (ED) contacts for Private Collection Agency (PCA) services.  In yesterday’s article, we promised a more detailed review of the decision. The protests themselves are subject to a GAO protective order and unavailable to the public. The GAO document that was released to the public is a redacted version of the decision. Thus, it is difficult to fully understand some parts of the decision.  

As noted in yesterday’s article, an award was to be made to the responsible offeror or offerors that submitted a proposal which conformed to the solicitation and was determined to be the “most advantageous” to the government. For the purposes of determining which proposals were the most advantageous, the agency was to consider three factors: (1) past performance; (2) management approach; and (3) small business participation. Past performance and management approach were equal in importance, and small business participation was less important than either of the other factors.

The decision was written by Susan Poling, GAO General Counsel. Ms. Poling provided two charts that depicted ED findings for the 3 critical factors. The charts showed the following:

Ms. Poling then addressed the issue of the timeliness of some of the protests. Several of the intervenors and ED had sought dismissal of several of the protests, arguing that they were untimely. Poling disagreed. 

Several intervenors and ED also argued that the protesters are not interested parties to challenge the agency’s evaluation of the awardees’ proposals. Again, GAO disagreed and concluded that the protesters are interested parties to challenge the awardees’ evaluations. 

The decision then moved to the root of the problems with ED’s awards - the evaluations of the key factors. 

Past Performance Evaluations - Generally 

GAO identified a number of concerns with ED’s evaluation of proposals under this factor. Per the decision:

“Some of the errors appear to have impacted the evaluation of several proposals. In such circumstances, we address below the nature of the concern and highlight representative examples. In other instances, the errors appear to have been unique to individual proposals. 

As a general matter, we will review an agency’s past performance evaluation to determine whether the evaluation was conducted fairly, reasonably, and in accordance with the solicitation’s evaluation scheme. We will question an agency’s evaluation conclusions where they are unreasonable or undocumented. Additionally, it is fundamental that a contracting agency must treat all offerors equally, and therefore it must evaluate offers evenhandedly against common requirements and evaluation criteria."

GAO also noted as a problem the fact that the agency appears in several circumstances to have unreasonably either ignored or discounted relevant information bearing on the quality of offerors’ past performance if it was not included in one of ED’s prior Contractor Performance Assessment Reporting System (CPARS) reports.

They found that this applied the evaluation of Delta Management Associates, Inc. (Delta), Texas Guaranteed Student Loan Corp (TG), and Van Ru Credit Corporation (Van Ru). 

Ms. Poling wrote:

“[There was]……….a pattern by the agency of neglecting to consider, or unreasonably discounting, relevant past performance information, based on what appears to be the agency’s fixation on ED’s prior Contractor Performance Assessment Reporting System (CPARS) reports to the exclusion of other past performance information. It is apparent that the agency unreasonably relied almost exclusively upon CPARS reports in lieu of reasonably considering available past performance information, which the agency itself identified as being highly relevant.” 

Other Specific Past Performance Evaluation & Documentation Concerns 

The decision next moved to a discussion of other past performance evaluations and documentation concerns. 

Ms. Poling noted:

“The record also reflects certain other anomalies in the evaluation of offerors’ past performance. Notwithstanding the protesters’ detailed rebuttals to the agency’s contemporaneous evaluation findings, in many instances the agency’s reports fail to respond--either specifically or generally--to the protesters’ arguments.”

Automated Collection Services, Inc. (ACSI) 

ACSI submitted its own proposal, as well as an additional proposal as part of a contractor team. GAO referred to ACSI when addressing the proposal submitted by ACSI, and the ACSI Team when addressing the proposal submitted by ACSI as part of a contractor team. 

We noted in yesterday’s article that “in several instances, the ED contracting officer, who was also the source selection authority (SSA) disagreed with the ratings initially assigned by ED’s lower-level evaluators, and adjusted the ratings.” 

The ACSI Team challenged the SSA’s decision to change its past performance rating, which ED’s technical evaluation committee (TEC) evaluated as highly satisfactory, to neutral. Ms. Poling agreed with the protester that the SSA’s determination to change the ACSI Team’s past performance rating was inconsistent with the terms of the solicitation, and was otherwise unreasonable. 

TG

TG also challenged the agency’s assessment of an overall satisfactory rating of its past performance. GAO agreed that the record does not support the reasonableness of the agency’s evaluation of TG’s past performance. The TEC found TG’s three past performance references to be highly relevant, and the agency noted positive indicators of performance on TG’s highly relevant contracts; nonetheless, the agency assigned TG a satisfactory rating overall. Ms. Poling concluded “that the agency’s documented evaluation does not reasonably support the agency’s evaluation of TG’s past performance.”

Williams & Fudge, Inc. (W&F) 

W&F argued that the SSA improperly downgraded its past performance to marginal. The record reflected that the TEC evaluated W&F’s past performance as satisfactory. The SSA, while adopting the TEC’s underlying evaluation findings, disagreed with the TEC’s overall satisfactory rating, and instead rated W&F’s past performance as marginal solely because of the relatively small size of the references. The GAO agreed with W&F. Poling wrote: 

“We find that the SSA’s assignment of a marginal rating for W&F’s past performance was unreasonable. We find that the SSA’s assignment of a marginal rating for W&F’s past performance was unreasonable. Accordingly, at worst, W&F’s past performance should have been rated neutral.” 

Collecto Inc. d/b/a EOS CCA (Collecto)/TG/General Revenue Corporation (GRC) 

Collecto, TG, and GRC argued that the agency failed to adequately document and support their satisfactory ratings. In response to the protests, the TEC Chair asserted that the TEC declined to afford certain protesters more credit in the evaluation of their past performance because those protesters presented past performance information “in a self-serving manner” without providing “concrete details. 

Poling determined: 

“These assertions are unreasonable for several reasons. First, these concerns were not documented and are not supported by the contemporaneous record. Second, the nature of the TEC Chair’s criticism is unreasonable and unsupported. Therefore, we find the agency’s post hoc justifications for its ratings are unsupported by the record and unreasonable.” 

The decision next turned to arguments made by some of the protests concerning the companies that were awarded. Two issues were raised. Failure of one awardee to disclose negative judgments and failure of 5 awardees to disclose material changes in key personnel. insideARM refers readers to pages 20-23 of the decision for the GAO discussion of these matters. Note: The GAO sustained the protest of Gatestone & Co International, Inc (Gatestone) with respect to certain of the awardees’ failure to update their proposals based on a material change. 

Failure to Consider Totality of the Proposals 

This section of the decision applied primary to GRC and Collection Technology, Inc. (CTI). But 4 other protesters had similar issues. 

Poling determined: 

“To reach the consensus management score, the TEC reviewed section A of the offerors’ proposals (which included their management plans and key personnel resumes), while the quality control evaluator (QCE) evaluated the QCPs. The evaluators, however, do not appear to have contemporaneously reviewed the entirety of the offerors’ proposals with respect to their complete management approaches (i.e., management plan, key personnel resumes, and QCP). The agency’s cabined review of proposals under the management approach factor, however, resulted in an unreasonable evaluation in several instances. This was because offerors logically organized their proposals in accordance with the solicitation’s instructions, but were penalized by the agency’s failure to consider the merits of the management plan and QCP in a holistic manner as contemplated by the RFP’s evaluation criteria. 

In several other cases, it appears that the agency similarly failed to reasonably consider the entirety of the offerors’ management approaches (i.e., the management plan and QCP). Therefore, the evaluation of the following additional protesters’ management approaches appear to have suffered from similar flaws as addressed in this section: ACSI; the ACSI Team; Collecto; and W&F.” 

Other Unstated Evaluation Criteria 

The GAO also determined that ED imposed additional unstated evaluation criteria in the evaluation of proposals for GRC, ACSI, the ACSI Team, CTI, Performant Recovery, Inc (Performant), Progressive Financial Services, Inc. (PFS), Allied Interstate LLC (Allied). GAO determined that any evaluation on this basis with respect was unreasonable. 

Other Evaluation & Documentation Concerns 

The GAO identified other evaluation and documentation concerns that negatively impacted Delta, the ACSI Team, GRC, Van Ru, and Collecto. 

Summary of the Sustained Protests 

Poling summarized the decision to sustain to protests. 

“As set forth above, the record shows that the agency’s evaluation of proposals was unreasonable in numerous respects. Our review shows that the proposals were reasonably evaluated in some respects, but that the evaluation was unreasonable in many other respects. 

Accordingly, we conclude that the following protesters have established a reasonable possibility of competitive prejudice to prevail in their bid protests: DMA; GRC; TG; ACSI; the ACSI Team; CTI; Performant; Allied; Collecto; Van Ru; PFS; Gatestone; and W&F. “ 

The decision then turned to the protests that were denied. 

Sutherland Global Services (Sutherland) 

The GAO determined: 

“We find no basis to question the agency’s determination that Sutherland’s proposal warranted an unsatisfactory rating under the small business participation plan factor. The record reflects that Sutherland failed to submit the required participation plan and otherwise failed to commit to meeting the 31 percent minimum mandatory small business subcontracting set-aside requirement.” 

Account Control Technology, Inc. (ACT) 

The GAO determined: 

“We find no basis to question the agency’s determination that ACT’s proposal warranted a marginal rating under the small business participation factor. Additionally, the agency assigned ACT’s proposal a weakness because, in addition to missing the majority of the subcategory goals, ACT did not propose to subcontract to SDB or SDVOSB concerns any of the core debt collection-related activities.” 

Global Receivables Solutions, Inc. (f/k/a West) 

The GAO determined: 

“We find no basis to sustain GRS’s protest because the agency reasonably determined that its past performance was less than satisfactory. The record reflects that the TEC rated GRS’s past performance as unsatisfactory due to performance issues on GRS’s incumbent contract. Specifically, the TEC noted that the protester had received a marginal rating for quality on the most recent CPARS report for its incumbent contract.” 

Alltran Education, Inc (f/k/a ERS) 

The GAO determined: 

“We find no basis to question the SSA’s determination that Alltran’s proposal warranted a marginal rating for past performance. The TEC initially rated the protester’s past performance as satisfactory. In reaching that conclusion the TEC noted that Alltran had highly relevant past performance, including as a prime contractor on the incumbent requirements. The TEC noted that Alltran received a very good quality rating on its most recent CPARS report for the incumbent contract, but also noted that Alltran was rated as unsatisfactory for regulatory compliance based on its 23 percent error rate during the agency’s 2015 focused review. 

The SSA disagreed with the TEC’s satisfactory rating, and instead determined that Alltran’s past performance was marginal. Specifically, in addition to the unsatisfactory history of regulatory compliance on the incumbent contract, she also found that Alltran had been suspended for violating agency policies and procedures in performing debt collection activities for rehabilitation when performing its incumbent contract. 

In this regard, we find nothing unreasonable with the SSA considering the conduct that lead to the suspension when the conduct arose in connection with Alltran’s performance of the incumbent requirements, especially where the concerns were exacerbated by Alltran’s subsequent unsatisfactory regulatory compliance rating following the agency’s focused review.” 

insideARM Perspective 

There is a lot to be digested from this decision.  The story has not ended.  In fact, insideARM has learned that ACT has filed a lawsuit challenging this decision. The complaint is not available to the public. The case is captioned Account Control Technology, Inc v. United States of America, (Case No. 1:17-cv-00493, U.S. Court of Federal Claims). 

insideARM will continue to monitor further developments.