Procurement is a game of failure

There's a subreddit called "r/unpopularopinion" that, as you might infer from the name, encourages folks to share their unpopular opinions. A recent example is "A lot of people put so much spice on things they've forgotten how to actually just enjoy food." Another is "Kungfu panda is the best animated film I’ve seen." I don't spend much time on reddit so I am not going to pretend that I have read much of this or other subreddits. But I do have some unpopular opinions!

Here's one: federal procurement is a game of failure.[1] If you spend enough time in government contracting, you're going to miss a lot of the time. You're probably going to miss most of the time. This is true whether you're on the government side or the industry side. And, often, even if you may not realize you've screwed something up during the procurement process, you probably screwed something up.

This opinion is unpopular because most folks who specialize in government contracting are, by their nature, either perfectionists who don't like to hear about their mistakes, or they're trying to persuade someone to fund their effort, and admitting that the thing you’re pursuing is going to go badly is a pretty poor persuasion tactic.

To thrive in federal contracting requires an ability to make exceptionally detailed plans, and the competing ability to accept that the best-laid plans can be tossed out for reasons that are well beyond your control.

That's my unpopular opinion, and a few weeks ago, the GAO offered up some new evidence validating my perspective. I present to you Life Science Logistics, LLC, which involved a solicitation for the procurement of "warehousing and deployment services" for the strategic national stockpile.

The original solicitation, issued on May 5, 2022, required vendors to meet a number of different requirements. For example, the solicitation required a vendor to submit a "facility availability letter," which is a "signed document from the owner of the proposed property that provided clear evidence that the proposed site and facility would be available immediately upon award." It also had some substantive requirements, including a condition that the facility should not flood "under normal weather conditions." The solicitation also required the vendor to prepare a draft "transition-in plan" and a Gantt chart "detailing proposed project timelines, schedules, and milestones associated with all phases of facility conditioning."

The agency received proposals from two offerors—Life Science Logistics, LLC (LSL) and Integrated Quality Solutions, LLC (IQS)—in June 2022. After evaluation, the government made the award to IQS in August 2022. Then, LSL protested to the GAO, but the government decided to take corrective action, amended the solicitation, and received new proposals. After another round of evaluation, the government made a second award to IQS in December 2022.

Again, LSL protested. And again, LSL prevailed at the GAO when the GAO held that the government failed to conduct "meaningful discussions" because the government "failed to raise the significant weaknesses that, in the subsequent re-evalaution, resulted in LSL’s proposal being rated as not acceptable." We'll come back to this point about meaningful discussions later. The GAO decision came down in April 2023 and the government decided to reopen the solicitation in May 2023.

Here, let's take a moment to observe that LSL has lost twice and won twice. Let's also take a moment to observe that a year has gone by since the first solicitation.

Anyway, the government reopened the solicitation and requested "updated Gantt charts and transition-in plans and stated that it anticipated scheduling a site visit with each offeror." In June 2023, the updated Gantt charts were submitted and site visits conducted. During the June site visit of LSL's proposed facility, the government observed "small amounts of standing water," and the government concluded that the facility had a flood risk.[2]

In July 2023, the government submitted a "discussions letter with an attachment that listed significant weaknesses, weaknesses, and aspects of LSL’s proposal that could, in the opinion of the contracting officer, be altered or explained to enhance materially the proposal’s potential for award." Critically, though, that discussion letter "did not mention any concerns about whether the activities were realistic and reasonable." After receiving their respective discussions letters, both LSL and IQS submitted final proposals and, after another evaluation, in October 2023 the government made another award to IQS.

Despite the fact that the government didn't mention the concerns about the Gantt chart in June, the award was based – in part – on a conclusion from the technical evaluation board that the Gantt chart and transition-in plan were not realistic.

Again, LSL protested to GAO. This time LSL argued that (1) IQS didn't have an adequate facility availability letter; and (2) the agency failed to provide LSL with meaningful discussions. But in the meantime, despite the protest, the government decided to proceed with contract performance with IQS. In December 2023, LSL filed a separate action at the Court of Federal Claims seeking to prevent the government from proceeding, and the Court ruled in LSL's favor and enjoined performance.

Now, let's observe here that LSL has lost three times at the agency and won three times on appeal. Whereas IQS has won three times at the agency and, according to the contracting officer, IQS advanced consistently excellent proposals throughout.

How did the GAO rule on LSL's current protest? You guessed it: the GAO sustained the protest on both grounds! First, here's the opinion with regard to the facility availability letter:

The solicitation required the facility availability letter to provide clear evidence that the proposed site and facility would remain available, subject to release "only in the event that the contractor has been formally notified by the Government that it has been removed from the competitive range, or the Government awards a contract for this site to another firm or for another facility location before the January 30, 2033, date (provided all options are exercised)." IQS's facility availability letter did not provide the clear evidence of immediate availability required by the RFP.

Instead, the landlord of the proposed site retained the right to decline to lease the property to IQS at any time and for any reason. Contrary to the contracting officer’s assertions, IQS's facility availability letter did not provide clear evidence that the site IQS proposed would be available immediately upon contract award. IQS's facility letter did not provide such evidence because the landlord could lease the site to a third party at any time and for any reason--rendering the site unavailable to IQS for contract performance. IQS's facility availability letter did not comply with the material requirements of the solicitation, and IQS's proposal was therefore ineligible for award.

I mean, sure! If the point of a facility availability letter is to make sure that the facility is... well... available at a given time, it is problematic for that letter to also include language that says that the facility might not be available at any given time for any given reason.

And, then, the GAO ruled on the Gantt charts:

Here, [the government] notified the offerors that it was continuing discussions, and it requested updated Gantt charts and transition-in plans. LSL submitted an updated Gantt chart and transition-in plan in its June proposal submission. One month later, [the government] sent LSL a discussion letter that included two questions about LSL’s June proposal submission, but it did not mention any concerns about whether the activities were realistic and reasonable. When the TEB evaluated LSL’s final proposal revision--including the essentially unchanged Gantt chart and transition-in plan--the evaluators assessed a significant weakness related to seven concerns that had not been mentioned in the discussions letter.

There is no dispute that the Gantt chart and transition-in plan included in LSL’s final proposal revision were substantially the same as the documents that were included in the June proposal submission. [The government] did not advise LSL of the significant weakness until it selected IQS for award. For this reason, the discussions that occurred were not meaningful because the agency did not advise the protester of significant weakness in its June proposal submission

Yes, of course. If you review a Gantt chart in month one and it looks fine to you in month two, you can't come back a few months later and complain about the Gantt chart. If you want to hold "meaningful discussions" about how a company can improve its proposal, you need to tell them which parts aren not up to snuff.

Bottom line: LSL won once more. And you just have to admire the approach here. LSL just kept on losing, and losing, and losing. But in spite of it all, LSL kept on fighting and, I guess, submitting updated Gantt charts and transition-in plans or whatever. Incredibly, in the end, LSL might just pull off the win.

Meanwhile, the government also keeps losing, and losing, and losing, and losing, but in the end they'll get the job done.

Still, with cases like these, you can understand why folks might be a bit skittish about getting into the government contracts game in the first place. I mean, IQS submitted consistently excellent proposals and kept a property vacant for almost two years! But its $238 million deal is still on hold because, the summer before, the government didn't talk about a Gantt chart and because its landlord might want to rent the place out eventually.

Them's the breaks, I guess.

Procurement's a game of failure, after all. If you play, chances are good that you'll lose. Then again, eventually, someone has to win, right?

[1] Here's another. I prefer the British punctuation practice of placing periods and commas outside of quotation marks. I have been pretty inconsistent in my adoption—or lack of adoption—of this practice.

[2] This turns out to be not especially relevant to the GAO decision but it is funny. Apparently, the government misread the weather records? Here's what GAO said: "The TEB evaluated LSL’s site with the mistaken belief that the site received 3.34 inches of rain on June 27, 2023, and it experienced an average of 3.59 inches per day on June 27. In actuality, the National Weather Service data showed that the site received 0.12 inches of rain on June 27, 2023, and an average of 3.59 inches of rain between June 1 and June 27." I guess if a location had an average daily rainfall of more than 3.5", that sure would present a flood risk. In fact, an average daily rainfall of 3.5" would make the facility's location the rainiest place in the world by a wide margin. But an average monthly rainfall of 3.5" is a bit different. That's what Dallas, Texas, experiences in December. Then again, standing water after 0.12" of rain is not a great look.

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