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Integrated Biometric Technology v. Department of General Services

May 11, 2011


The opinion of the court was delivered by: Rochelle S. Friedman, Senior Judge

Argued: March 8, 2011



Integrated Biometric Technology, LLC d/b/a L-1 Enrollment Services (L-1), petitions for review of the May 21, 2009, order of the Department of General Services (DGS), which denied L-1's protest of DGS's rejection of the proposal L-1 submitted in response to a request for proposals (RFP) for digital fingerprinting and electronic federal criminal background check services. We reverse.

DGS issued the RFP and received proposals from Cogent Systems, Inc. (Cogent), from L-1 and from two other entities. The proposals contained three components: technical, cost and disadvantaged business (DB).*fn1 The Issuing Officer examined the cost portion of each RFP for responsiveness. As a result of the examination, the Issuing Officer asked Cogent to clarify its subcontracting costs. In response, Cogent submitted a revised cost sheet, stating that Cogent mistakenly added subcontracting costs twice on the original cost sheet.*fn2 (Findings of Fact, Nos. 1, 8-12.)

The Issuing Officer removed the financial records from the technical part and gave them to a team within the Bureau of Procurement for analysis of vendor financial capability. The rest of the technical part was given to the evaluation committee. The DB component was given to the Bureau of Minority and Women Business Opportunities. The Issuing Officer retained the cost portion. (Findings of Fact, Nos. 13-16.)

The Bureau of Procurement team analyzed the financial records of each offeror, using eleven financial ratios considered to be key financial indicators by Dun & Bradstreet. A score of six or greater indicated that the offeror would be financially capable of handling a large statewide contract. L-1 received a score of three, and Cogent received a score of eight. (Findings of Fact, Nos. 18-20.)

Because of L-1's low financial ratio score and because DGS had reason to believe that L-1's cost submittal showed an insufficient understanding of the cost structure of the contract, the Issuing Officer sent L-1 a letter requesting clarification. The Issuing Officer's letter did not express concern about L-1's financial position. In response, L-1 affirmed that it understood the cost structure of the contract and that its bid pricing was consistent with other programs in the industry of similar size and complexity. L-1 gave examples of other states that used a cost structure similar to the one that L-1 proposed. (Findings of Fact, Nos. 22, 24, 26-27.)

After the evaluation committee reported its results to the Issuing Officer, DGS selected Cogent and L-1 to proceed to the Best and Final Offer (BAFO) phase of the evaluation process. However, in its BAFO letter to L-1, DGS stated that it still had concerns about L-1's cost proposal, and, if L-1 did not increase its pricing, DGS may reject L-1's proposal as not responsible. (Findings of Fact, Nos. 29-31.)

Cogent and L-1 each submitted its BAFO, with L-1 increasing its prices in response to DGS's letter. On March 12, 2010, the Issuing Officer recommended to Deputy Secretary Anne Rung that DGS select Cogent for contract negotiations. The Issuing Officer determined in the recommendation that L-1 was not responsible. On March 13, 2010, the Deputy Secretary signed and approved the recommendation; this was the first time that the Deputy Secretary had any direct involvement in the RFP process. (Findings of Fact, Nos. 33-38.)

On March 16, 2010, the Issuing Officer sent a letter to L-1, informing L- 1 of DGS's conclusion that L-1 was not a responsible offeror based on L-1's lack of financial resources to perform the requested services. On March 23, 2010, L-1 filed a protest challenging DGS's conclusion. (Findings of Fact, Nos. 39-41.)

The Deputy Secretary then directed Chief Procurement Officer Jeffrey I. Mandel, the contracting officer, to de-brief L-1 on its non-selection and to provide L- 1 with copies of the selection memorandum, Cogent's proposal and Cogent's BAFO.

The Deputy Secretary advised L-1 that, if it did not supplement its protest within seven days after receiving those items, DGS would dismiss the protest as clearly without merit. L-1 submitted a supplemental protest; Mandel submitted a response; and L-1 submitted a reply. (Findings of Fact, Nos. 42-47.)

L-1's protest was assigned to the Deputy Secretary for disposition. At that point, L-1 requested that the Deputy Secretary recuse herself because she had signed and approved the recommendation to select ...

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