Finessing CICA Redux: Another Attempt by Government IT Offices to Avoid Competition

January 11, 2011

A bit over a year ago, I wrote about an interesting government agency strategy to avoid having to deal with the messiness of “full and open competition.” (See https://vanhornelaw.wordpress.com/2008/09/05/finessing-cica-the-open-ended-support-contract-ploy/) Now it is time to discuss another ploy to avoid the annoyance of competition, the purported standardization determination.

On January 3, 2011, the Court of Federal Claims issued a preliminary injunction against the Department of the Interior’s attempt to standardize on Microsoft’s email system without conducting a competition. After attempting unsuccessfully to interest the Department in its ability to provide an email system for the Department, Google protested various actions of the Department to implement its sole source decision to use the Microsoft product. You can see a copy of the opinion at http://tinyurl.com/4956j5g.

From the opinion, it is pretty clear that Interior had made the decision to standardize on Microsoft some time ago, perhaps as early as 2007. For months, in 2009 and 2010, Google corresponded with and met with Interior officials to pitch its competing product. Up until late 2010, Interior essentially led Google on, claiming that a competition would be held for the Department’s email system. When solicitation documents became public in late 2010, it was finally clear that there was to be no competition and that Interior had made a final, internal decision to go with Microsoft. The actual solicitation was issued only to selected Microsoft resellers to implement the standardization decision.

This is not a new tactic among government IT offices. In 2007, the Department of Homeland Security tried to do the same thing with the acquisition of financial systems software. (See Savantage v. US, http://tinyurl.com/24vj2rg.) Both DHS and Interior set up the actual solicitation so that the real party in interest, the software developer, could not bid on the procurement by making the procured services only for implementation of a sole source designation of the software to be used. This appears to be an effort to simply avoid having to have a competition for the software since IT personal have developed their own preferences for a particular company’s software and choose not to subject that preference to the competitive market place. Obviously, the strategy becomes problematic when the sole source determination fails to meet statutory and regulatory requirements. Secondarily, the strategy also makes it more difficult for the software developer to challenge the procurement.

It would appear that GAO simply will not address this type of procurement law violation because the protester is not, and cannot be, a bidder. The Court of Federal Claims, on the other hand, has repeatedly shown a willingness to address CICA finessing ploys of various types. I assume this is because the two bid protest forums work under quite different jurisdictional mandates. The statutory mandate to GAO in ruling on bid protests is to “determine whether the solicitation, proposed award, or award complies with statute and regulation.” 31 U.S. Code 3554(b)(1). The Court, however, is under a mandate “to render judgment on an action by an interested party objecting to a solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.” 28 U.S. Code 1491(b)(1). What the Court has that GAO does not is jurisdiction over “any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.” The Court interprets this third leg of its jurisdictional statute quite broadly, relying on the very broad definition of “procurement” from the Office of Federal Procurement Policy Act, 41 U.S. Code 403(2)(which is mirrored in the FAR at 2.101). See Ramcor Services Group, Inc. v. United States, 185 F.3d 1286, 1289 (Fed. Cir. 1999).

So what is going on here? Why the tendency for this type of ploy to show up in the government IT arena? I would suggest that defining requirements, as would be necessary for a competitive procurement, is really not an easy task. By just getting comfortable and familiar with and then specifying one software product, the requiring office can avoid the unpleasant task of actually articulating what the agency needs. It would appear that procurement officials, perhaps because of a lack of technical expertise, can get snowed by inadequate sole source justifications. This is then compounded with use of all of the IDIQ type contracts available to the contracting officer (e.g., GSA schedule contracts, GWACS, various agency BPAs) which also help disguise the real sole source selection. Since the Savantage decision, and now certainly after the Google decision, it hopefully will be obvious that this particular CICA finessing ploy isn’t all that likely to succeed.


Finessing CICA: the Open-Ended Support Contract Ploy

September 5, 2008

CICA, the Competition in Contracting Act (41 USC 253 et seq.), requires the government to obtain supplies and services through “full and open competition through the use of competitive procedures.” There are, of course, a number of exceptions to this requirement and sometimes it seems to me that federal procurement officials put more effort into avoiding competition than they put into running an appropriate competition. Agencies appears to have developed a number of ploys to avoid competition involving task order IDIQ contracts, buzzwords like “standardization,” and (today’s entry) the open-ended support contract.

Here’s how it works. The agency finds an IDIQ or schedule contract, a BPA or some similar contractual ordering vehicle (in this case a Government Wide Acquisition Contract (GWAC)) and issue a task order for “support” to a program. Then, with or without the help of the support contractor, the agency decides what the program needs, say IT services or software tools. The support contractor is then directed to go out and buy whatever is needed. Since the purchase is a subcontract, most federal procurement regulations (specifically the requirement for “full and open competition”) do not apply, making it much easier for agency personnel, who activity participate in the selection process, to get what they want without having to worry about messy things like solicitations, source selection evaluations and bid protests. Or so the theory goes.

This was apparently the plan in a case recently decided the by Court of Appeals for the Federal Circuit. (Distributed Solutions, Inc., and STR, L.L.C., v. United States, No. 2007-5145, August 28, 2008) This case involves a procurement of software for the Joint Acquisition and Assistance Management System program (JAAMS), a joint United States Agency for International Development (USAID) and Department of State (DOS) program to develop a common computer platform between the two agencies. In November 2003, a task order was issued to SRA International, Inc. (SRA), under GSA’s Millennia GWAC to provide “technical services and support for information technology purposes.” In June 2005, the agency, assisted by SRA, issued a Request for Information (the June RFI) soliciting sources for “commercial off-the-shelf (COTS) Acquisition and Assistance (A&A) solutions for JAAMS.” After reviewing the June RFI responses, the agency announced that it had decided “to pursue alternative courses of action.” The agency then decided to task SRA with selecting the software vendors, which SRA did first by issuing an RFI of its own (the August RFI) and then making a selection. Two disappointed software vendors unsuccessfully protested to GAO and subsequently to the Court of Federal Claims. Both GAO and the Court treated the protests as nothing more than subcontractor protests, which neither forum will hear.

The Court found that the contractors had standing (i) because they responded to the June RFI, demonstrating that they were potential offerors, and (ii) because they had a direct economic interest, having been deprived of the opportunity to compete to provide the software solution, a contract that could have been worth $10 million. The Court also found that the contractors had alleged a number of non-frivolous statutory and regulatory violations.

This left the key question, whether the complaint alleged statutory and regulatory violations “in connection with a procurement or a proposed procurement.” The Court of Federal Claims jurisdictional statute for bid protests, 28 USC 1491(b), includes three bases for jurisdiction: (I) objections to a solicitation; (ii) objections to an award; and (iii) “any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.” The contractors relied on the third basis for bid protest jurisdiction.

The Court, citing RAMCOR Services Group, Inc. v. United States, 185 F.3d 1286, 1289 (Fed. Cir. 1999), noted that the operative phrase “in connection with” is very sweeping in scope. Acknowledging that the bid protest jurisdictional statute (28 USC 1491(b)) does not define either “procurement” or “proposed procurement,” the Court adopted the statutory definition of “procurement” found in the OFPP Act at 41 U.S.C. § 403(2). Under this definition, “procurement” includes “all stages of the process of acquiring property or services, beginning with the process for determining a need for property or services.” Although the Court did not comment on this, the statutory definition from the OFPP Act has been adopted by the Federal Acquisition Regulation. See 48 CFR 2.101.