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Federal Market Intelligence for Small Business |
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Column: The Key Personnel ConundrumUnderstanding the Increasing Importance of Key Personnel Changes and ProtestsBy Beth McMahon, government contracts attorney, Reaves GovCon GroupGovernment agencies often emphasize an offeror’s key personnel as an evaluation factor in procurements. Requests For Proposals (RFPs) typically require resume submissions and contain detailed matrices calling out the experience, degrees and certifications required of proposed key employees. An offer must meet all the explicitly stated criteria for key employees, but a more implicit aspect that is increasingly being protested is whether the key personnel that have been proposed will be the same particular employees provided during contract performance. Because the procurement process is long, key personnel sometimes leave employment or change their intentions during the evaluation process. Importantly, in order to avoid protests and disqualification, Contractors should understand the law governing key personnel. For example, a protest our firm handled, which included a hotly contested key personnel issue, ground on for more than 18 months imposing costly delay and legal expenses. (Conley & Associates, Inc. v. United States, 142 Fed. Cl. 177 (2019). Basis of Protests and lawsuits Most of the cases addressing key personnel issues consider what is referred to as a “bait and switch.” A “bait and switch” is established when a contractor proposes a key employee while intending not to provide that particular employee during contract performance. The Government Accountability Office (GAO) and Court of Federal Claims case law generally align on this scenario, with both the GAO and the Court focusing on whether the offeror had a reasonable basis for anticipating that the proposed key person would be available to work if the contract were awarded. Obtaining signed letters of intent provides such a basis (and contractors should consider obtaining them even if not required under the RFP to document their reasonable basis). Both the GAO and Court also will assess whether the key personnel issue was material to the agency’s decision, meaning most simply “did the issue impact the award decision?” Cases consider a spectrum of alleged misrepresentations (ranging from a sloppily-worded statement in a proposal to misplaced reliance on third-party hearsay about employees’ willingness to be hired, to outright lies without any factual basis), but the takeaway is that a material misrepresentation about key personnel availability will likely result in a sustained protest and can result in complete disqualification from re-procurement. Change in Circumstance But what should a contractor do if a proposed key employee departs after a bid is submitted but before an award? No active misrepresentation has been made but there is a potentially relevant change in circumstances. Step one should be to scour the RFP to determine if it contains language mandating a disclosure. The FAR has a provision often included in contracts requiring agency notification of proposed substitution of key personnel after award as a matter of contract administration. The FAR does not contain a provision mandating disclosure before award. But the particular RFP at issue may contain such a requirement, and, if it does, the requirement must be followed. But, if there is no such provision in the RFP, a contractor is faced with a perilous choice. Because the GAO and Court of Federal Claims cases do not align on this scenario, any contractor action will involve some risk because a protestor can elect to file a protest in either forum. GAO case law requires that a contractor notify the agency of a change in key personnel availability after bid submission even when the RFP contains no such explicit directive. See AttainX, Inc., B-419306 (Jan. 12, 2021). This leaves a contractor in an unenviable position because, after notification that a proposed key person has become unavailable, the agency can then elect to consider the proposal as submitted but without the key person who has become unavailable (which often results in disqualification since the requirements are not met or a rating is lowered) or the agency can open discussions to permit amendments. Opening discussions is burdensome for the agency because it must permit all offerors to then make changes to avoid unequal treatment. The contractor may thus be incentivized to keep its head in the sand and not disclose the personnel unavailability knowing that the agency is incentivized to simplify its analysis by disqualifying the offeror. The Court of Federal Claims has reached the opposite conclusion about a contractor’s duty to disclose the unavailability of proposed key personnel after bid submission, finding no such duty. In Golden IT, LLC v. United States, 157 Fed. Cl. 680 (2022), the Court noted that the GAO’s imposition of such a duty was “without legal basis and ‘unfair.’” It declined to “conjure up” such a requirement absent a statutory or regulatory basis. Key personnel unavailability is thus one of a few fact patterns where a protestor’s choice of forum can be outcome-determinative. If you are a contractor faced with an issue of key personnel unavailability, consult your government contracts legal advisor to map out the actions you can take to reduce the risk of protest and disqualification. If you believe a competitor has an issue of key personnel unavailability, counsel can assess whether a protest is advisable and where it should be filed. The case law on this topic will likely continue to evolve rapidly so a government contracts specialist should be able to provide current and efficient guidance. Beth McMahon frequently brings and defends protests at the GAO and Court of Federal Claims. Her email is Beth.McMahon@ReavesGovCon.com.
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