THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND IS BEING RELEASED TO THE PUBLIC IN REDACTED FORM ON SEPTEMBER 14, 1993 _________________________________________________________ DENIED: September 3, 1993 _________________________________________________________ GSBCA 12484-P, OAO CORPORATION, Protester, v. GENERAL SERVICES ADMINISTRATION, Respondent, and COMPUTER DATA SYSTEMS, INC., and CBIS FEDERAL INC., Intervenors. Terrence O'Donnell, F. Whitten Peters, Ari S. Zymelman, Stephen D. Raber, Kevin M. Hodges, Eric J. Moss, and John T. Parry of Williams & Connolly, Washington, DC, counsel for Protester. Seth Binstock, Pamela J. Reiner, Tenley A. Carp, and John Sawyer, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Gerard F. Doyle, Scott W. Woehr, and Alexander T. Bakos of Doyle & Bachman, Washington, DC; and Charles B. Machion and Robin McCune of Computer Data Systems, Inc., Rockville, MD, counsel for Intervenor Computer Data Systems, Inc. Joseph J. Petrillo, Jessica C. Abrahams, and Laurel A. Heneghen of Petrillo & Hordell, Washington, DC; and Susan Warshaw Ebner, of CBIS Federal Inc., Fairfax, VA, counsel for Intervenor CBIS Federal Inc. Before Board Judges PARKER, HENDLEY, and HYATT. PARKER, Board Judge. OAO Corporation's contract to provide automatic data processing (ADP) support services was terminated for convenience by the General Services Administration (GSA) as a result of GSA's admitted violations of statute and regulation in connection with the award. OAO protests the termination, maintaining that the original award was proper in all respects. GSA, with the help of two offerors which have intervened in the protest, maintains that its original grounds for terminating the contract were correct. In addition, GSA and the intervenors argue that the termination was proper because OAO's proposal did not comply with material requirements of the solicitation and, thus, was not eligible for award. We need go no further than to agree with GSA and the intervenors that OAO's proposal was not eligible for award. OAO misled the Government as to the status and availability of its proposed key personnel. In addition, OAO failed to comply with solicitation provisions requiring that such personnel be "employed by, or under employment agreement" with the offeror, and that the employees be available for assignment on the date of award. As described more fully below, OAO failed to comply with these requirements with respect to six of the seven individuals to which the requirements were addressed. Because OAO's proposal did not comply with these key solicitation requirements, OAO should not have received the award. Termination of the contract was thus appropriate. Findings of Fact 1. On November 21, 1991, GSA solicited proposals for ADP technical support services for Federal agencies in a geographical area known as the Central Zone. The solicitation contemplated award of a requirements type contract with fixed labor rates, and was for a one-year period, with four one-year options. Protest File, Exhibit 1. Approximately 700 contractor personnel will perform the services for this contract, which is worth in excess of $150,000,000. 2. The contract was awarded to OAO on June 1, 1993. On June 11, Computer Data Systems, Inc. (CDSI), protested the award. CDSI claimed that it had been misled during price discussions in that the contracting officer induced CDSI to raise its prices and then awarded the contract to a lower-priced offeror. CDSI also alleged that OAO's rates were unreasonably low, that GSA had misevaluated CDSI's proposal, and that OAO was ineligible for award because its proposed Program Manager was not available for assignment to the contract. Protest File, Exhibit 286. Shortly thereafter, CBIS Federal Inc. (CBIS) also filed a protest. CBIS alleged that OAO's prices were unreasonable and unrealistic. Id., Exhibit 288. Two other losing vendors, CTA, Inc., and ARC Professional Services, intervened on the side of the protesters. 3. On June 17, GSA terminated the contract with OAO. Protest File, Exhibit 290. On June 28, GSA, CDSI, CBIS, ARC and CTA filed a Joint Stipulation of Dismissal with the Board. The Joint Stipulation provided in pertinent part as follows: The Parties jointly stipulate that GSA evaluated the offers in a manner inconsistent with the evaluation criteria during the competition for the Contract and that this constitutes a violation of the Competition in Contracting Act. In addition, GSA stipulates that it (i) failed to conduct meaningful discussions with the offerors during the competition for the Contract; and (ii) provided information which reasonably led offerors to believe that if changes were made in their rates for skill categories included in the requirement, that such changes would improve the offeror's chances for award, while in actuality, the offeror's chances for award were negatively affected as a result of making such changes. GSA stipulates that the above constitute violations of the Competition in Contracting Act of 1984. The Board dismissed the protests as the protesters and the Government requested. Computer Data Systems, Inc. v. GSA, GSBCA 12455-P et al., 1993 BPD 179 (June 30, 1993). OAO, which had intervened on GSA's side, did not participate in the settlement or the request for dismissal. On July 2, 1993, OAO filed the instant protest, contesting GSA's decision to terminate the contract. Solicitation Requirements 4. Section C of the solicitation (the statement of work) stated that: Certain senior professional and managerial personnel are essential for successful contractor performance. The contractor shall assign specific individuals, by name, to the key positions of Program and Group Managers. Key personnel shall be available for full- time assignment under this contract on the award date of the contract. Protest File, Exhibit 1 at C-16. Similarly, section C.9.1.a provided that "[t]he proposed Program Manager and the Group Manager(s) shall be available for assignment to this contract on the effective date of the contract, and remain in their respective positions for a minimum of twelve (12) months." Id. at C-17. 5. The solicitation contained six technical evaluation criteria, one of which was "Personnel": This area will be evaluated as a whole as acceptable or unacceptable. To be acceptable, an offer must have acceptable resumes for all required positions. (1) Individual resumes must be submitted for the Program Manager (1), and the Group Managers (6), that will be assigned initially to the contract. . . . All resumes submitted must meet the minimum requirements for the offeror to be evaluated as acceptable in this factor. The Offeror and individual shall certify that the information on each resume is true and complete, and that the individuals named shall be available for assignment on the date the contract is effective. . . . . (4) If any of the following conditions are not met, the resume will be evaluated as unacceptable: . . . . (c) Is employed by, or under employment agreement, with the firm, (d) Is committed by the firm to be provided, if required, on the award date of the contract; for Program Manager and Group Managers, for the first twelve months of the contract. Protest File, Exhibit 1 at L-15 - L-16. According to the contracting officer, the solicitation did not permit award of the contract to an offeror which did not have the Program Manager and the Group Managers available on the date of award. Transcript at 1284-86, 1288. The Program Manager 6. In its initial proposal of February 19, 1992, OAO proposed as its Program Manager. Mr. Sherrer was at that time an OAO employee and had agreed orally to serve as Program Manager in the event OAO won the contract. Transcript at 493. OAO submitted Mr. Sherrer's resume, which stated that he was currently an OAO employee, and was "available immediately." Protest File, Exhibit 14. The proposal further stated that OAO's key personnel "are willing and committed to be available on the award date of the contract and for the first twelve months of the contract." Id., Attachment G at 6-1. 7. Mr. Sherrer resigned from OAO by letter of February 15, 1993. The letter stated: I will not be continuing my employment with OAO upon completion of my five year employment contract. Accordingly, I tender my resignation effective 3/7/93. CDSI Protest File Supplement, Exhibit 36. On March 15, Mr. Sherrer went to work for a company called Calspan, in Tullahoma, Tennessee. Id., Exhibit 41. OAO never informed GSA (by updating his now-incomplete resume, or otherwise) that Mr. Sherrer was no longer an OAO employee, even though OAO submitted two subsequent best and final offers (BAFOs). Transcript at 933-34. OAO did not propose a substitute Program Manager (prior to award), either. 8. OAO never discussed the Program Manager position with Mr. Sherrer again until May 31, three days after OAO was informed that it had been awarded the contract. Transcript at 209, 503, 731. OAO's Senior Vice President called Mr. Sherrer on May 31 to discuss the contract award and Mr. Sherrer's availability to serve as Program Manager. The next day, OAO's Senior Vice President called the contracting officer and told her that Mr. Sherrer was "unavailable" because he was working for another company. Id. at 282.[foot #] 1 The Senior Vice President sensed that the contracting officer was disappointed. Id. at 751. Nevertheless, OAO confirmed the notification in a letter of June 1, which stated that "Mr. Sherrer is no longer available for this assignment." CDSI Protest File Supplement, Exhibit 37. OAO brought a substitute Program Manager to the "kickoff" meeting with GSA on June 4. 9. On June 7, OAO's Senior Vice President attempted to set up a face-to-face meeting with Mr. Sherrer. Transcript at 750. The meeting occurred on June 15, four days after CDSI had filed its protest alleging, among other things, that OAO was ineligible for award because its proposed Program Manager was unavailable. On the same date, two weeks after award of the contract, OAO entered into a employment contract with Mr. Sherrer. CDSI Protest File Supplement, Exhibit 39. The agreement provides for a salary of for the first year and for the second year. This is and thousand dollars, respectively, more than Mr. Sherrer is paid at Calspan.[foot #] 2 The employment agreement also provides that OAO will reimburse Calspan for Mr. Sherrer's relocation from Pasadena, California, to Tullahoma, Tennessee, and pay up to an additional for a further relocation from Tullahoma to Huntsville. Id. These terms were all proposed by Mr. Sherrer and OAO accepted them without negotiation. According to OAO's Senior Vice President, OAO's President agreed to the terms because he is "very fond of Mr. Sherrer." Transcript at 765.[foot #] 3 ----------- FOOTNOTE BEGINS --------- [foot #] 1 OAO's Senior Vice President and Mr. Sherrer went to great lengths to explain that Mr. Sherrer was under an oral employment agreement and thus "available" immediately to perform the contract. Moreover, according to OAO's Senior Vice President, when he told the contracting officer that Mr. Sherrer was unavailable, he really did not mean it in that sense. See ___ Transcript at 733-38. The facts, however, speak for themselves. We simply do not find OAO's after-the-fact explanations to be credible. [foot #] 2 Although Mr. Sherrer was paid a similar salary when he worked for OAO in Pasadena, California, he was surprised that OAO agreed to pay him so much to work in Huntsville, Alabama, where the cost of living is much lower. He had expected, and would have accepted, much less. Transcript at 510, 530, 538, 554, 764. [foot #] 3 In its proposal, OAO had proposed a salary of approximately per year for the Program Manager, which is the Transcript at 537, 764. ----------- FOOTNOTE ENDS ----------- The Group Managers 10. In January of 1992, OAO's Senior Vice President sent by electronic mail the following message to OAO's President and its Chief Operating Officer: The RFP for the 700-person job requires us to provide resumes for the PM [Program Manager] and nine GMs [Group Managers]. We are resuming [sic] Jim Sherrer for the PM position. . . . . The nine GMs have to have 10+ years of experience in the business including two years managing at least 20 people performing both business and scientific software development tasks in diverse locations. This is a difficult requirement and we have looked throughout the company to find nine that qualify. . . . When we win the job, it is our intention to do everything we can to hire the incumbent managers, since that is far less costly than moving these individuals and certainly less disruptive to our current operations. The scoring for the resume section is pass or fail. If we fail, we are essentially out of the competition, so we do not want to skimp onn [sic] the talent. . . . CDSI Protest File Supplement, Exhibit 13 (emphasis added).[foot #] 4 11. In its initial proposal of February 19, 1992, OAO proposed six Group Managers, as required by the solicitation (as amended). At that time, all six were OAO employees; five of the six were currently working on OAO's Western Zone contract with GSA. Transcript at 720-21. All had agreed that OAO could propose them for the Central Zone contract. ----------- FOOTNOTE BEGINS --------- [foot #] 4 As it does with virtually every event involved in this case, OAO attempts to "explain away" the significance of this message. OAO's Senior Vice President explained that the message was not reflective of OAO's actual intentions and that OAO understood that this language was not consistent with the solicitation. Transcript at 715, 814. Like many other of OAO's "explanations," this one strikes us as an after-the-fact rationalization, rather than a credible explanation. ----------- FOOTNOTE ENDS ----------- 12. In the Summer of 1992, OAO lost the Western Zone contract to CDSI. Five of OAO's six proposed Group Managers were laid off. Transcript at 720-21. OAO never informed GSA (either by correcting their now-incomplete resumes, or otherwise) that these five proposed Group Managers were no longer employed by OAO, even though OAO went through extensive negotiations and submitted two subsequent BAFOs. OAO did not propose substitute Group Managers, either. 13. When the five proposed Group Managers left OAO's employ in early July 1992, OAO had them sign letters of commitment. Four of the letters said exactly the same thing: This confirms my commitment to work for OAO as a Group Manager on the GSA Central Zone Business/Science Contract. This agreement is contingent upon OAO being awarded the contract by GSA. Protester's Exhibit (Lohfeld) 8. The fifth letter said substantially the same thing. Id. The letters of commitment were not signed by OAO, and do not contain any terms of employment such as salary, benefits, start date or duration. 14. Three of the proposed Group Managers, Messrs. do not believe that they have employment agreements with OAO. They consider their letters of commitment as an indication of their willingness in 1992 to consider offers from OAO for a Group Manager position on the Central Zone contract. Transcript at 1354, 1361 , 1372-76, 1378 1405 . Mr. who has a tenuous job situation, believes that he has some sort of agreement with OAO. Id. at 835, 1803-06.[foot #] 5 Mr. the fifth of the laid off Program Managers, did not testify. 15. Even though OAO continued to propose these people for the Group Manager positions ("willing and committed to be available on the award date of the contract"), OAO never followed up to see whether these former employees were still available to work on the contract. The proposed managers (with one possible ----------- FOOTNOTE BEGINS --------- [foot #] 5 Although Messrs. and currently work for CDSI on the Western Zone contract, the Board finds their testimony to be highly credible. In the Board's opinion, these mid-level employees answered each question honestly and appeared to be under no pressure from CDSI. The Board also found the testimony of Mr. to be credible. After listening to all of the testimony on this subject, we cannot help but feel that each individual's perceptions as to whether he had an employment agreement with OAO depended to a large extent on the degree to which that person desired the job. ----------- FOOTNOTE ENDS ----------- exception) were not even contacted until after award -- almost a year after they had left OAO. Transcript at 828, 1354, 1374, 1407; Protester's Exhibit (Lohfeld) 8. The current availability of the proposed Group Managers is varied and at present uncertain. Discussion Jurisdiction This protest is what is commonly referred to as a "reverse" protest. Such protests involve a challenge by the contract awardee to an agency's decision to terminate a contract based upon improprieties in the award process. GSA argues that the Board lacks protest jurisdiction over challenges to such terminations, even where the propriety of the award underlies the determination to terminate. We disagree. We have held that the Brooks Act "permit[s] an interested party to file with . . . [the Board] a complaint against an agency's termination of an ADPE contract for the convenience of the Government based upon a determination by the agency that the procurement process failed to conform with law." Diversified Systems Resources, Ltd., GSBCA 9493-P, 88-3 BCA 20,897, 1988 BPD 119. Thus, the Board's jurisdiction includes the so called "reverse" protest: We hold that a protest, as that term is defined in the Brooks Act, encompasses an objection by an interested party to the retraction as well as the making of an award of a contract, where the retraction is based on an agency determination that improprieties occurred in the procurement process. This holding recognizes that in effect, the agency, where such a retraction has occurred, has already objected to the award, and the awardee is simply challenging the agency's objection. The case is thus here on precisely the same issues on which it would be here if the award had been made to another firm and that protester had elected to protest that. The fundamental issue is in both situations whether the award was made in accordance with applicable statutes and regulations. The protester still bears the burden of proving its case by a preponderance of the evidence, but the Brooks Act entitles it to be heard. 88-3 BCA at 105,655, 1988 BPD 119 at 7. As we pointed out in Diversified, the General Accounting Office has, for many years, been deciding such protests. See, e.g., Service Industries, Inc.; Merchant's Building Maintenance Co., B-183535, 75-2 CPD 345 (Nov. 24, 1975); Norfolk Shipping and Drydock Corp., B- 219988.3, 85-2 CPD 667 (Dec. 16, 1985). Here, as in many "regular" protests, a disappointed offeror (OAO) is challenging an agency's (GSA's) decision not to award it a contract. The fact that GSA's decision came in the form of a termination for convenience (because GSA initially awarded the contract to OAO) does not change the fundamental nature of that challenge. To dismiss such a protest for lack of jurisdiction would inappropriately emphasize form over substance -- something we are confident that the Congress, in enacting the Brooks Act, did not intend for us to do. GSA's motion is denied. The Merits OAO maintains in this protest that the award was made in accordance with statute and regulation and, thus, should not have been terminated by GSA. We hold that the termination was proper. As discussed below, we find that OAO's proposal was ineligible for award and should not have been accepted. OAO misled GSA as to the status and availability of its proposed key personnel. In addition, OAO's proposal failed to comply with material requirements of the solicitation. The solicitation required each offeror to submit seven resumes as part of its proposal. These seven people would be supervising approximately 700 people involved in performing a contract worth more than $150,000,000. The solicitation required that the resumes be certified as "true and complete," and that "the individuals named shall be available for assignment on the date the contract is effective." Finding 5. The solicitation further provided that a resume would be unacceptable if the proposed person was not "employed by, or under employment agreement with, the firm" and "committed by the firm to be provided, if required, on the award date of the contract . . . ." Id. In its initial proposal, OAO told GSA that its proposed Project Manager and its six proposed Group Managers were employees of OAO and were "willing and committed to be available on the award date of this contract and for the first twelve months of the contract." Findings 6, 11. This may well have been true at the time OAO submitted its initial proposal. Things changed drastically during the course of the procurement, however. OAO's proposed Project Manager and five of the six proposed Group Managers left OAO to work for other companies. Findings 7, 12. Yet OAO said nothing about it to GSA. OAO did not update the now-incomplete resumes or otherwise inform GSA during negotiations or in either of OAO's two BAFOs. Id. OAO simply let GSA believe that its key personnel were still employed by OAO and "willing and committed to be available on the award date of the contract and for the first twelve months of the contract." In fact, they were neither. In RGI, Inc. v. Department of the Navy, GSBCA 11752-P, 93-1 BCA 25,402, 1992 BCA 156, a case remarkably similar on its facts to the instant case, we held: When a significant segment of the evaluation of a technical proposal is based upon the qualifications of the proposed key personnel, offerors must determine that the personnel they propose are, in fact, available. Merely to assume that former employees are available to return to their former employment, based on information months old, is not reasonable. 93-1 BCA at 126,514, 1992 BPD 156 at 8. In RGI, the Board followed numerous Board and Comptroller General decisions which have invalidated contract awards on the basis that the awardee proposed key personnel it had no assurance that it could deliver. See Sterling Federal Systems, Inc., GSBCA 10381-P, 90-2 BCA 22,802, 1990 BPD 70; Electronic Data Systems Federal Corp., GSBCA 9689-P, 89-2 BCA 21,655, 1989 BPD 69, aff'd in part, vacated in part sub nom. Planning Research Corp. v. United States, 971 F.2d 736 (Fed. Cir. 1992); CBIS Federal, Inc., B- 245844, 92-1 CPD 308 (Mar. 27, 1992) (assumption that proposed personnel would be available for contract performance because offeror heard nothing to the contrary was unreasonable); Mantech Field Engineering Corp., B-245886, 92-1 BPD 309 (Mar. 27, 1992) (failure of awardee to ascertain current availability of proposed personnel invalidated award; offeror has responsibility to determine whether its proposed personnel are available when proposal is evaluated on the qualifications of those individuals); see also Omni Analysis, B-233372, 89-1 CPD 239 (Mar. 6, 1989) (an offeror's failure to inform an agency that a proposed key person is no longer available and to provide a substitute constitutes a misrepresentation warranting a termination, even though it is not clear if the selection decision would have been different had the offeror accurately reflected the true status of the key person). Here, notwithstanding its protestations to the contrary, OAO had no reasonable assurance that its proposed Program Manager and five of its six proposed Group Managers would be available to perform the contract. All of them had other jobs, and OAO had not spoken to most of them in almost a year. Finding 15. This was precisely the situation we found in RGI to render that firm ineligible for award. OAO argues that the solicitation did not really require the proposed personnel to be available on the date of award because there was not enough work for all of them to do during the contract transition period. Even if OAO's reading of the solicitation could be considered reasonable, which neither we nor the contracting officer consider it to be, OAO's proposal still failed to comply with the availability requirements. Given the employment situations that existed prior to award, OAO could not reasonably have believed that its key personnel were available at all, much less on the date of award.[foot #] 6 OAO also maintains that key personnel availability was not a mandatory requirement of the solicitation. Under OAO's theory, OAO's failure to assure the availability of proposed key personnel should result in at most a point reduction in its technical score, points being the number of points assigned to the "Personnel" section. Again, we agree with the contracting officer and disagree with OAO. First, the requirement that proposed key personnel be available on the date of award was not confined to the "Personnel" section, which was worth technical points; the requirement appeared throughout the solicitation. See Findings 4, 5. More important, however, is the mandatory nature of the solicitation language. The solicitation uses the terms "shall" and "must" throughout when referring to the personnel availability requirement. Id. In a contract for services of this magnitude, it is hard to imagine a provision more material than one which requires the offeror to have acceptable key personnel available to work on the contract.[foot #] 7 OAO's failure to ensure that its ----------- FOOTNOTE BEGINS --------- [foot #] 6 We do not view the fact that OAO ultimately was able to "buy back" its proposed Program Manager as proving that he was available. See Informatics, Inc., 57 Comp. Gen. 217 ___ __________________ (1978), 78-1 CPD 53 (it is inappropriate to take note of an offeror's post-selection recruitment efforts when these personnel were not committed at the time of award). If offerors were permitted to propose personnel without regard to preaward availability, the integrity of the procurement process would be destroyed. [foot #] 7 Under OAO's theory, for example, a contractor could fail to propose any personnel for the Program Manager and ___ Group Manager positions and still win the contract award on (continued...) ----------- FOOTNOTE ENDS ----------- proposed key personnel were in fact available rendered its proposal unacceptable. OAO's proposal was unacceptable for another reason -- its proposed Program Manager and five of its six Group Managers were not "employed by, or under employment agreement, with the firm," as required by the solicitation. OAO maintains that its oral agreements with the proposed Program Manager and Group Managers while they were employees of OAO constituted employment agreements which continued to exist after the employees left OAO. OAO views the letters of commitment signed by the Group Managers as confirmations of those oral employment agreements. The terms of the employment agreements are said to include a "reasonable" salary and "standard" benefits. OAO did not have "employment agreements" with either its proposed Program Manger or its proposed Group Managers. First, we point out that OAO uses actual employment contracts; the proposed Program Manager had one before he resigned from OAO, and he has one now. Findings 7, 9. Mr. Sherrer's current employment agreement was signed by both Mr. Sherrer and OAO, and it sets forth Mr. Sherrer's salary, the duration of the agreement, and his benefits, including his two relocation allowances. Finding 9. At the time of award, however, Mr. Sherrer did not have one of these agreements; in fact, when he left OAO, the two parties never again discussed the status of Mr. Sherrer's oral agreement to serve as Program Manager for the Central Zone contract. Mr. Sherrer simply went on to his new job at Calspan. Finding 7. We reject OAO's self-serving characterization of Mr. Sherrer's status at the time of award as being under an "employment agreement." The proposed Group Managers were in similar situations. As OAO employees, they agreed to serve as Group Managers in the event OAO won the contract. When they left, however, at least three of them reasonably considered their letters of commitment to be nothing more than indications of their willingness to consider offers from OAO. Finding 14. Such an unsettled situation is entirely consistent with OAO's original plan to hire as many incumbent managers as possible, after award. Finding 10. Read in the context of the entire solicitation, the requirement for employment agreements for non-employees of the offerors was a method of attempting to assure that the Government would actually receive the services of the personnel upon which it based its award decision. OAO's stale commitment letters did not serve that purpose. We agree with the contracting officer that an employment agreement is something more than a commitment letter. Transcript at 225. ----------- FOOTNOTE BEGINS --------- [foot #] 7 (...continued) points. Such a reading of the solicitation is unreasonable. ----------- FOOTNOTE ENDS ----------- Decision GSA's decision to terminate OAO's contract was reasonable. OAO misled GSA as to the status and availability of its proposed key personnel. In addition, OAO's proposal failed to comply with material requirements of the solicitation and was, therefore, ineligible for award of the contract. Accordingly, the protest is DENIED. ______________________ ROBERT W. PARKER Board Judge We concur: ________________________ JAMES W. HENDLEY Board Judge ________________________ CATHERINE B. HYATT Board Judge