Losing the Keys to the Kingdom – How Key Personnel Unavailability Can Jeopardize Contract Award
Winning government contracts often comes down to who you have on your team. It should come as no surprise then that government agencies have placed increasing emphasis on key personnel as an evaluation factor in best value procurements. But what happens when the individuals you propose become unavailable after proposal submissions but before award? Will losing key personnel result in losing the contract? Or, if you learn that your competitor’s key personnel left the organization – or there are open recruiting notices for the key personnel on your competitor’s website – can you get the award overturned?
These are just some of the questions contractors face when it comes to complying with key personnel requirements in government solicitations. To better understand how contractors can avoid the pitfalls that come with proposing key personnel, we first examine what it means to propose key personnel who are committed and expected to work on the project for which you are bidding. Then, we discuss what to do should a key person leave your company after you’ve submitted your proposal. Finally, we conclude with a summary of key points to consider when faced with a key personnel issue that arises during a bid protest.
Proposing Key Personnel
Generally, whether an offeror’s proposed key personnel do, in fact, perform under an awarded contract is a matter of contract administration. However, government contract tribunals often will consider allegations that an offeror failed to propose key personnel committed and expected to perform on the resulting contract as a bid protest ground. It is well-established that a requirement to provide letters of commitment from proposed key personnel is a material solicitation requirement, such that an award to a contractor failing to supply these letters certainly is subject to being overturned. This occurred in IT Objects, LLC, B-418012, B-418012.2, Jan. 2, 2020, 2020 CPD ¶ 2, where the Government Accountability Office (“GAO”) sustained a protest because the agency awarded a contract to an offeror that failed to provide a letter of commitment for one of the nine key personnel positions required by the solicitation.
But beyond rendering it ineligible for award, an offeror’s proposal of key personnel that the offeror does not reasonably expect to be available for performance may also constitute a material misrepresentation. Specifically, an offeror could be viewed as committing a “bait and switch” when (1) the offeror either knowingly or negligently represented that it would rely upon specific personnel who it did not have a reasonable basis to expect would be used during performance, (2) the misrepresentation was relied upon by the agency, and (3) the agency’s reliance upon the misrepresentation had a material effect on the evaluation results. Such an impermissible “bait and switch” tactic led to the overturning of an award in ASRC Federal Data Solutions, LLC, B-421008 et al., 2022 WL 17505197 (Comp. Gen. Dec. 2, 2022). There, the GAO held that the putative awardee’s quotation contained a material misrepresentation as to the availability of a key person where the identified individual was exclusively committed to another firm, did not consent to the use of their name or qualifications in the quotation, and did not accept a contingent offer of employment from the putative awardee. Given the adverse effect material misrepresentations have on the integrity of the procurement process, the GAO not only recommended that the putative awardee’s contract be terminated, but recommended that they be excluded from recompeting for the requirement as well.
Substituting Key Personnel after Proposal Submission
Even if an offeror has complied fully with a solicitation’s key personnel requirements at the time of proposal submission, it can still find itself on the losing end of a bid protest. Specifically, should any of the proposed key personnel become unavailable to perform after the submission of final proposal revisions – for example, by having left the company, resigned, fallen ill, or even died – and the offeror knows of this unavailability prior to award, then under GAO precedent, the offeror can be found ineligible for award if it fails to notify the agency. Thus, for example, in M.C. Dean, Inc., B-418553, B-418553.2, Jun. 15, 2020, 2020 CPD ¶ 206, the GAO sustained a protest where the putative awardee knew its proposed project manager failed to obtain a required security clearance after proposal submission but failed to inform the agency of that fact, resulting in a knowing material misrepresentation in its proposal upon which the agency relied in awarding the contract.
When an offeror becomes aware that a proposed key person is no longer available and informs the agency of that fact, the GAO recognizes two options for the agency: either (1) evaluate the proposal as submitted without considering the resume of the unavailable employee, in which case the proposal likely will be rejected as unacceptable for failing to meet a material solicitation requirement; or (2) open discussions to permit the offeror to amend its proposal. Should the agency choose this latter option, however, then the opportunity to amend must be extended to all offerors in the competitive range, lest the agency risk engaging in unequal discussions. This occurred in YWCA of Greater Los Angeles, B-414596, B-414596.2, July 24, 2017, 2017 CPD ¶ 245, where the GAO sustained a protest because the agency permitted an offeror to substitute a key person who had become unavailable after proposal submission, but without affording other offerors in the competitive range the same opportunity to amend their proposals. Reopening discussions can be time-consuming and expensive for procuring agencies, particularly where the competitive range is composed of many different offerors. Consequently, the GAO’s post-proposal submission notification rule has the unintended consequence of creating an incentive for agencies to simply reject a proposal as noncompliant should proposed key personnel become unavailable after proposal submission, to the detriment of the offering contractor.
Fortunately, the GAO rule has not been adopted by the Court of Federal Claims (“COFC”). Indeed, in Golden IT, LLC v. United States, 157 Fed. Cl. 680 (2022), the COFC rejected the GAO’s rule that offerors had to notify agencies of changes in the status of their proposed key personnel after submission of final proposal revisions, describing that rule “as without legal basis and ‘unfair.’” Instead, in the absence of an explicit solicitation provision requiring or mandating a certification regarding the future availability or commitment of proposed key personnel, the COFC in Golden IT held that to be eligible for award, an offeror need only have a reasonable belief at the time of its offer that the key personnel it proposed would be available upon contract award. This holding was reinforced in IAP Worldwide Services, Inc. v. United States, 159 Fed. Cl. 265 (2022), where the COFC held that the awardee was under no obligation to inform the agency of the departure of a proposed key person after proposal submission given the absence of an affirmative requirement to do so in the solicitation.
In the wake of the COFC’s decisions in Golden IT and IAP Worldwide Services, Inc., the GAO seemingly rejected an invitation to revisit its post-proposal submission notification rule for key personnel changes. In Sehlke Consulting, LLC, B-420538, May 18, 2022, 2022 CPD ¶ 119, the GAO – acknowledging the COFC’s holding in Golden IT in a footnote – nonetheless sustained a protest where the agency awarded a contract after being informed of a proposed key person’s resignation and scheduled departure prior to the commencement of contract performance. Accordingly, contractors should be aware that this remains an area of disagreement between the two major bid protest fora.
Careful consideration should be taken when selecting which key personnel to include in your proposal. You not only must ensure and demonstrate that individuals meet all of the mandatory requirements, but also ensure they are committed to the position, no matter how long it takes the government to award the contract. Severe consequences could result if the key personnel you propose were either never committed to take the proposed role or become unavailable before award. It should come as no surprise then that allegations of key personnel changes can be a powerful tool for protesters looking for another bite at the procurement apple. But disappointed offerors beware – the obligation to inform agencies of key personnel changes post-proposal submission applies only in the GAO, having been explicitly rejected by the COFC in at least two recent decisions. Accordingly, before bringing a protest allegation attacking an awardee’s key personnel, offerors should carefully consider which forum is most receptive to its arguments.