This article is an excerpt from the 2023 edition of The Art of Tendering: A Global Due Diligence Guide.
As evidenced in recent rulings by the U.S. Government Accountability Office (GAO), the use of unnecessarily restrictive requirements remains subject to successful legal challenge for breaching open tendering rules. These cases serve as a useful reminder to public institutions across all jurisdictions of the importance of avoiding restrictive requirements in their solicitation documents.
For example, in its August 2021 decision in InfoPoint LLC, the GAO ruled that the security clearance requirement applied to a small business joint venture was unnecessarily restrictive. The bid protest dealt with a Department of Defense (DOD) solicitation for command and control, intelligence, surveillance, and reconnaissance support services. The joint venture bidders challenged the security standards, which required that the joint venture, rather than its separate members, have top secret facility clearance to be eligible for award. The GAO ruled that this requirement violated the federal small business statute that “unambiguously prohibits DOD from requiring that a joint venture hold a facility clearance if the members of the joint venture hold the required facility clearances.” The GAO ruled that the security requirements should be amended to apply to the joint venture parties, rather than to the joint venture itself.
Similarly, in its November 2021 decision in Computer World Services Corporation, the GAO ruled that the evaluation rules imposed unjustified restrictions on past experience. The bid protest dealt with an information technology services solicitation issued by the Department of Health and Human Services. The complainant, a small business seeking work as a subcontractor under a federal government mentor-protégé program, challenged the past experience restrictions imposed on prime bidders, which limited those bidders to submitting only two or three examples in certain evaluation categories. The complainant argued that this restriction unjustifiably limited the ability to assess the proposed small business subcontractors that would be used by the prime bidder. The GAO agreed, ruling that the Department should either remove those restrictions or provide its justification for imposing those restrictions.
Further, in its December 2021 decision in Westwind Computer Products, Inc., the GAO ruled that the United States Department of Agriculture (USDA) engaged in improper branding in its software licensing solicitation. The complainant argued that the USDA improperly limited the competition to Microsoft enterprise software without providing a rationale for that restriction, and thereby failed to comply with the branding rules set out in the Federal Acquisition Regulation. The GAO agreed, finding that the USDA failed to properly justify the use of the restrictive brand-name requirement for the procurement. More specifically, the GAO found that “the USDA failed to provide or indicate that its market research showed that other companies’ similar products cannot be modified to meet the agency’s needs.” The GAO ruled that the solicitation was overly restrictive and ordered the government to either prepare the required justification for the restrictive competition or remove that restriction from its solicitation requirements.
Finally, in its May 2022 decision in Insight Technology Solutions, Inc., the GAO found that the government imposed unnecessarily restrictive time constraints on its proof of certification requirements. The bid protest dealt with a Department of Homeland Security solicitation for call centre support services for the agency’s student and exchange visitor program. While the GAO ruled that the required capability maturity model integration (CMMI) level 3 certification was a legitimate contract performance requirement, it found that the Department imposed unnecessarily restrictive time constraints by requiring bidders to provide proof of certification at the time of bid submission. As the GAO stated, it found nothing in the record “that would make the mere possession of CMMI level 3 or greater certification relevant before the start of contract performance, much less before award.” The GAO ordered the Department to amend its solicitation and remove proof of certification as a bid submission requirement.
As these case studies illustrate, public institutions are facing increasing pressure to avoid unnecessary restrictive requirements since suppliers are becoming increasingly active in legally challenging those requirements.
