GSA schedule deals come under scrutiny

A recent Comptroller General decision sounds a cautionary note about use of the General Services Administration's supply schedules for goods or services: Agencies that opt to use the schedules' streamlined ordering procedures should think twice about adding extra ordering requirements.

ACS Government Solutions Group, Inc., protested the award of a task order to Deloitte & Touche to set up, service and perform accounting on single family mortgage loans held by the Housing and Urban Development Department. The order was made against GSA's schedule for loan and other asset servicing and management services.

HUD's use of a more formal bidder competition than required for the GSA schedules opened the task order award to the Comptroller General's review. "Under the [schedules] program, agencies are not required to request proposals or to conduct a competition before using their business judgment in determining whether ordering supplies or services from a [schedules] vendor represents the best value and meets the agency's needs at the lowest overall cost," the Comptroller wrote (ACS Government Solutions Group, Inc., B-282098; B-282098.2, B-282098.3, June 2, 1999). Upon reviewing the order, the Comptroller found problems with several aspects of HUD's process.

To award the task order, HUD ran a two-phase competition, using firms' qualifications and past performance records to choose those to be invited to bid, and then requiring offerors to submit written business proposals and orally present their technical and management proposals. The award went to Deloitte & Touche on the strength of its technical proposal. Its price, $36.6 million, was higher than ACS' $20.2 million bid, but HUD considered the technical evaluation factors more significant than price.

The Comptroller found HUD disregarded its own instructions to bidders in issuing Deloitte & Touche the task order and then failing to inform other bidders, including ACS, that the instructions had been waived.

In its solicitation, HUD told vendors they were required to use the agency's software system, Strategy, and that their computer systems could not interface directly with HUD's system. Nevertheless, Deloitte & Touche's proposal and oral discussions with the agency made clear that the firm based its pricing and technical approach on creating an electronic interface between Strategy and the servicing software of Deloitte & Touche's partner, The Clayton Group. The Comptroller found that by awarding the task order to Deloitte & Touche, HUD "essentially waived the instructions given offerors concerning the interface." Then, by not notifying ACS of the waiver, HUD disadvantaged ACS, whose approach assumed no interface with HUD's software.

In addition, the Comptroller found HUD incorrectly awarded Deloitte & Touche 23 of a possible 25 evaluation points for prior corporate experience even though the company's proposal "lacks any support to show [its] corporate experience is relevant to the contemplated contract." The Comptroller also found HUD had failed to give ACS an opportunity to meaningfully discuss the agency's concerns about the company's pricing proposal.

The Comptroller recommended HUD reopen discussions with the two companies, evaluate their proposals in light of the prohibition against an electronic interface, give ACS a chance to explain its pricing, and reevaluate Deloitte & Touche's prior experience. The ruling also recommended ACS be reimbursed the costs of filing the protest.

The ruling comes on the heels of a controversy over the Air Force's use of past performance evaluations in awarding blanket purchase agreements (BPAs) against the GSA schedules. The dustup came over three BPAs for desktop computers for which the Air Force used a private-sector review of vendor past performance to narrow its bidder invitation list. In response to vendor complaints, the Air Force announced that in the future, it will issue Commerce Business Daily notices of all new BPAs and publish the list of firms invited to bid. The moves will give firms left out of the bidding invitation a chance to make their case to the Air Force.

Adding to the schedules simplified selection procedures makes the Air Force somewhat more vulnerable to bid protests, said Col. Glenn Taylor, who directs the organization that let the BPAs for the Air Force Standard Systems Group at Maxwell Air Force Base, Ala.

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