Bureau Of Indian Affairs Has Discretion To Interpret Standards For Buy Indian Act, But Not To Ignore A Mandatory Solicitation Requirement
GAO sustained the protest of Native American Industrial Distributors, Inc. (“NAID”) of the Bureau of Indian Affair’s (“BIA’s”) award of a fixed-price contract to Chenega Federal Systems, LLP, for information technology infrastructure services. BIA set aside the solicitation under the Buy Indian Act, which permits a preference in purchasing the products of Indian industry. NAID challenged BIA’s determination that Chenega was eligible for awards of contracts set aside under the Buy Indian Act. GAO disagreed, upholding BIA’s method for determining eligibility. NAID added a supplemental protest after BIA provided the administrative record challenging Chenega’s failure to provide required letters of commitment from proposed key personnel. GAO sustained on this basis, but as can be seen below, a sustained protest does not always yield the outcome a protester wants.
Buy Indian Act Eligibility
NAID protested Chenega’s eligibility for award under the solicitation, which was set aside under the Buy Indian Act. Relying on a court case and GAO precedent (Colorado Constr. Corp., B-290960, Sept. 6, 2002, 2002 CPD ¶ 162), NAID argued that Chenega could not be eligible for a Buy Indian Act set-aside unless it had “(1) at least 51 percent American Indian ownership; (2) American Indians involved in the daily management of the firm; and (3) an American Indian recipient of the majority of [Chenega’s] earning.”
GAO disagreed, finding that BIA was “entitled to considerable deference in determining the standards to apply” in a Buy Indian Act set-aside, and that neither the statute nor the solicitation required NAID’s interpretation of Buy Indian Act requirements. Therefore, GAO held that Chenega, as a wholly-owned subsidiary of an Alaska Native Corporation, was entitled to award of a contract under a Buy Indian Act set-aside.
Letters Of Commitment Required By The Solicitation
Despite finding Chenega eligible for set-asides under the Buy Indian Act, GAO did not agree with BIA’s handling of the letters of commitment required by the solicitation that Chenega failed to provide. The solicitation required letters of commitment from offerors’ key personnel, along with non-disclosure agreements from all contractor personnel. Notably, a third offeror not involved in the protest was cited with a deficiency for failing to provide letters of commitment, and consequently received a rating of “unacceptable” under the solicitation’s “personnel resources” evaluation factor.
Chenega did not provide the letters of commitment as part of its original offer, nor as part of its revised proposal, which was submitted after BIA took corrective action in response to an earlier NAID protest. Initially, BIA argued that it did not review the letters as part of Chenega’s revised proposal because it had reviewed them as part of Chenega’s initial proposal. BIA quickly corrected itself upon realizing that Chenega had not provided the letters until after the protest was underway. BIA’s fallback position was to argue that the failure to provide the letters was inconsequential, and that NAID was not prejudiced by this failure because Chenega would have been selected anyway.
GAO found this explanation insufficient. First, BIA excluded another offeror on the basis of the “unacceptable” rating received due to that offeror’s failure to include letters of commitment. Second, GAO noted that BIA’s fallback position was belied by its initial argument that it had received and reviewed letters of commitment as part of Chenega’s original proposal. This argument implied that the letters of commitment were important to BIA, and that BIA’s fallback consisted of post hoc rationalizations made in the heat of litigation. GAO therefore sustained NAID’s protest on this basis.
A Footnote on Interested Party Status
BIA initially requested that GAO dismiss NAID’s protest on the grounds that NAID’s technical score was lower than a third offeror, and therefore NAID was not an interested party next in line for contract award if the protest were to be sustained. As is often seen, GAO refused to dismiss the protest because the procurement was conducted on a best value basis. In best value procurements, GAO does not necessarily require that a protester be the “second place” offeror because GAO’s holding could result in a reordering of the evaluated offers. In this case, even though another offeror had a higher technical score than NAID, NAID’s lower price meant that NAID was potentially in line for award if BIA were required to reperform a best value analysis.
A Remedy?
This protest may not result in the happy ending hoped for by NAID. In the final section of GAO’s decision, titled “Conclusions and Recommendations,” GAO suggested that BIA may have overstated its requirements by requiring letters of commitment for all key personnel. If that is the case, GAO noted that BIA may amend the solicitation to reflect its diminished requirements. Additionally, GAO noted that both Chenega and NAID were concerned about whether BIA adequately communicated to them the weaknesses of their proposals. GAO therefore stated that BIA should consider conducting discussions with the competitive range offerors and then reqesting final proposal revisions. Chenega was therefore still permitted to provide a revised proposal and BIA may still award the contract to Chenega despite its failure at the outset to provide the required letters of commitment. GAO recommended that BIA reimburse NAID’s protest costs.
