To resolve the conflicting authority, three changes should be made. First, the Federal Acquisition Regulation (FAR) should be revised to include the GAO duty to disclose. Second, solicitation policy should include preferences to state key personnel requirements as performance specifications. Finally, departing employees should be permitted to sign letters of commitment to perform the contracts being completed before leaving their former employer. This solution accounts for the concerns of contractors, ensures that the government obtains what it bargains for, and restores efficiency to the system by avoiding drawn-out bid protests that drain contractors’ funds and public resources.
I. Introduction
The Court of Federal Claims (COFC) and the Government Accountability Office (GAO) agree on most issues in government contracts law. When the two tribunals differ in their resolutions of a legal issue, offerors and officials from the procuring agency are left in an uncertain landscape with tough choices on how to proceed. One issue that GAO and COFC disagree on is what steps must be taken by an offeror who learns that one of the proposed key personnel in its proposal has become unavailable to perform the contract after the proposal deadline has passed. GAO has long declared that this absence must be reported to the procuring agency, who is then free to proceed as it sees fit. COFC followed along until early 2022, when an opinion cut in the opposite direction. The Great Resignation has only exacerbated the impact of this disagreement on the procurement industry. With so many employees resigning to search for better employment opportunities, more key personnel have become unavailable to perform a contract if their former employer wins the award.
The GAO’s rule can lead to harsh results for faultless contractors, but, ultimately, the duty to disclose a key personnel absence must be written into the Federal Acquisition Regulation (FAR). The new regulation should include procedural safeguards to alleviate the potential unfairness towards contractors while ensuring that the government can receive the best value from a procurement. Solicitations involving key personnel should also be revised to state the requirement as a performance specification, and departing employees should be permitted to sign letters of commitment to the contract if their former employer wins the award. This solution protects the interests of both contracting parties, and the new legal standard would eliminate the uncertainty that contractors and agency officials have faced when it comes to key personnel absences moving forward.
This Note will first examine the economic impact of the Great Resignation on private employees, the government, and specifically government contractors. Next, the precedents established by GAO and COFC will be analyzed, in addition to the interplay between the tribunals as forums for bid protest litigation. Finally, this Note proposes a solution to the ongoing circuit split that revises the FAR and enforces the GAO’s duty to disclose key absences, but also creates new procedural safeguards; suggests that solicitations only seek individually named key personnel when that level of detail is essential to the government’s needs; and permits departing key personnel to sign letters of commitment to perform the contract to completion for if their former employer wins the award.
II. The Background
President Joe Biden declared the end of the COVID-19 pandemic during an interview with 60 Minutes that aired September 18, 2022. Despite the President’s statement, the national and public health emergency declarations remained in effect until May 11, 2023, and the impact of the pandemic lingers. One economic impact is the Great Resignation, which has not only created new opportunities for workers but also new problems for businesses, including government contractors.
A. The Great Resignation
The COVID-19 pandemic has led to enormous changes across society. One phenomenon to accompany the pandemic has been referred to as the “Great Resignation” by Professor Anthony Klotz of Texas A&M University’s Mays Business School. The Great Resignation has seen millions of employees resigning from their jobs to seek more favorable employment opportunities, including a peak of 4.5 million resignations over the course of March 2022. According to Pew Research Center, the top reasons for these departures have been “low pay, a lack of opportunities for advancement and feeling disrespected at work.” Pew also found that those workers who resigned and found a new position were “more likely than not to say their current job has better pay, more opportunities for advancement and more work-life balance and flexibility.”
Although state and local governments have struggled with the effects of the Great Resignation, the federal government’s workforce has largely remained immune to these changes. The age group most likely to leave federal employment was individuals sixty years old and older, with 16.7% leaving federal employment in 2021, “indicating the totally normal phenomenon known as retirement.” For other age ranges, turnover rates were low, such as 4.4% for those between thirty to thirty-nine years old, 2.8% for those between forty to forty-nine years old, and 4.9% for those fifty to fifty-nine years old. These statistics led columnist Tom Temin to conclude: “[P]eople aren’t quitting the government in droves. They’re not even departing at any rate as to cause concern about staffing levels.” This shows that the greatest turnover has been occurring naturally among federal employees, rather than in response to the Great Resignation.
Government contractors, on the other hand, have not been immune to these changes and have felt the impact of the Great Resignation like other private entities. Aerospace and Defense (A&D) firms have seen especially harsh effects, with the consulting firm McKinsey reporting that in 2021 forty-six percent of employees in the A&D industry “were at least somewhat likely to leave their jobs in the next three to six months.” McKinsey also noted that the turnover rate among these employees was likely to remain high because the A&D industry’s drawback, its “organizational health ratings,” were precisely what is causing resignations across the private sector, which means that unless A&D firms embrace change, their employment shortfalls will likely remain problematic.
For example, in response to “labor shortages and COVID-19-related absenteeism,” major government contractor Northrop Grumman has been forced to turn to “less skilled workers it has been training itself” to maintain production capabilities at one of its manufacturing plants in California that produces parts for the F-35 fighter jet. Other major contractors such as Raytheon and Lockheed Martin also cite labor shortages in addition to supply chain disruptions as major challenges facing the A&D industry moving forward.
The National Defense Industrial Association has been quick to point out that some of the workforce troubles across the A&D sector predate the COVID-19 pandemic and the Great Resignation, as skilled workers were in high demand and short supply before these events led to further issues. Regardless of the source of these workforce shortages, the trend shows employees on the move and labor shortages across the industry. This is especially problematic with the demand for armaments sky high amid the ongoing war in Ukraine that shows no signs of slowing down. Greg Hayes, Raytheon Chief Executive, commented that “[t]he only thing that’s going to solve labor availability—I hate to say this—is a slowdown in the economy because right now there just simply aren’t enough people in the workforce for all of our suppliers.”
Even before the Great Resignation, but especially in light of the changes stemming from it, government contractors faced challenges in successfully performing contracts. The Great Resignation has exacerbated the staffing struggles of many contractors, meaning that they need to pay close attention to the current split between GAO and COFC when it comes to informing the government of departures of key personnel during the pre-award acquisition process.
III. GAO and COFC as Bid Protest Forums (Among Others)
Over the course of a competition for a contract, a range of alleged improprieties can cause an offeror to seek redress. Before an award is made, the offeror can alert the Contracting Officer (CO) to the alleged issues so the CO can amend the solicitation or seek a formal bid protest to correct the error. Through these actions, the offeror will seek to fix any errors that they have identified to “help ensure a fair, competitive process” that “can lead to [the] contractor winning the award.” After a contract award has been made, disappointed offerors must file a bid protest to address the issues they believe existed with the awarding of the contract. These disappointed offerors may protest in a number of venues, including at GAO, at COFC, and at the agency who is responsible for the procurement.
With a variety of potential protest venues, there arises the possibility that these tribunals will disagree with each other on how to resolve a legal issue. When federal courts of appeals disagree with one another on how to resolve certain issues, this disagreement is known as a “circuit split.” A similar dynamic exists when GAO and COFC arrive at conflicting resolutions of a legal issue. While the term “circuit split” refers specifically to the federal courts of appeals, this Note will refer to the disagreement between GAO and COFC as a “circuit split” to highlight how the relationship between GAO and COFC mirrors the relationship between federal courts of appeals. For example, neither tribunal is bound by the decisions of the other, much like how judges in the First Circuit are not bound by the precedent established by the Second Circuit. In fact, COFC judges are not even bound by the decisions of their fellow COFC judges. They are bound by the precedent established by the Federal Circuit and Supreme Court of the United States and also “give careful consideration to prior COFC decisions.” But with fourteen judges and nine senior judges currently active at COFC, a broad spectrum of opinions are to be expected. It is also important to note the relationship between GAO and the Federal Circuit. While COFC is bound by the Federal Circuit, GAO is not formally bound by the Federal Circuit, though it will generally follow Federal Circuit precedent. This relationship makes venue selection an important aspect of certain bid protests where such circuit splits exist.
Currently, a circuit splits exits between GAO and COFC over the duty imposed on a contractor who has already submitted its proposal for the competition, but later learns that one of its key personnel will not be able to perform the contract. GAO precedent requires the contractor to report this absence to the procuring agency, even if the deadline for proposal submissions has passed, while a recent COFC opinion held the exact opposite, leading to the circuit split that this Note will describe. Based on this circuit split, this Note offers a solution to that reestablishes uniformity in procurement law and avoids the costly and unnecessary litigation that could result from the split.
A. GAO’s Rule: Contractors Owe a Duty to Disclose Key Personnel Absences to the Procuring Agency, Even After the Proposal Submission Deadline Has Passed
GAO’s rule requires that a contractor inform the procuring agency when one of its key personnel becomes unavailable to perform the contract, even after the offeror has submitted its proposal and the proposal submission deadline has passed. Many commentators believe that the GAO approach should be abandoned, with some referring to the rule as “strange, ill-considered, and unfair,” or even “arbitrary, unduly burdensome to contractors and based on shaky precedent.” In forming this rule, GAO relied upon two of its existing doctrines, one that rejected bait and switch tactics, which occur when a contractor “proposes to perform a contract with particular personnel or resources that it intends to substitute after award.” The other doctrine states that “offerors have an obligation to notify agencies of impending corporate transactions that will affect proposed performance—and that upon receiving such notification, agencies must consider it.” In Greenleaf Construction Co., Inc. (Greenleaf), the two precedents were merged and the duty to disclose key personnel absence rule was formally established.
Greenleaf’s sustained bid protest involved the award of an Indefinite Delivery Indefinite Quantity (IDIQ) contract to Chapman Law Firm Company (CLF) by the Department of Housing and Urban Development (HUD) for single-family home management and marketing (M&M) services. Greenleaf sought to overturn the award because “CLF’s proposal misrepresented the resources and staff CLF intended to use to perform the contract.” In response to HUD concerns, during discussions over CLF’s staffing and lack of M&M experience, CLF submitted two key personnel, Mr. and Ms. A, in its new proposal. HUD’s Technical Evaluation Panel thought highly of these two individuals, evaluating their addition as a “strength” that made CLF’s staffing plan superior to Greenleaf’s, “because, unlike for Greenleaf, all key CLF personnel were clearly qualified for their positions.” Despite CLF’ staffing plan, Greenleaf’s overall technical approach was still rated “marginally superior” to CLF’s. Thereafter, Mr. and Ms. A fell out with Mr. Chapman, the owner of CLF, and informed him they would not perform if CLF was awarded the contract. CLF had already submitted its proposal, but a decision would not be made by HUD on the contract’s award for another two months. Over those two months CLF never informed HUD of the absence of Mr. and Ms. A.
GAO found that the absence of Mr. and Ms. A “was a material change in the awardee’s proposed staffing.” This material change occurred after the deadline for proposal submissions and two months before the contract was ultimately awarded. GAO held that “[u]nder these circumstances, CLF was required to advise the agency of the material change.” In sustaining this protest ground, GAO focused on the fact that, due to the key personnel absences of Mr. and Ms. A, the agency was unable to reasonably select CLF for the contract award because the agency would not be accurately evaluating the offeror’s ability to perform the contract. Moreover, CLF was “required” to tell the agency of these changes and its failure to do so threatened the integrity of the procurement.
B. COFC’s Rule: Contractors Owe Agency No Duty to Disclose Key Personnel Absences
GAO has consistently applied the same precedent, and the next section of this Note will discuss how it has doubled down and possibly even expanded the disclosure rule, rejecting the approach of Judge Solomson in Golden IT, LLC v. United States (Golden IT). In Golden IT, the Geography Division of the United States Census Bureau (Census) sought a contractor to provide IT support for the vast amounts of data collected to compile the census through a Blanket Purchasing Agreement (BPA). Census posted its RFQ that required that
quotes include two parts, which were to be submitted simultaneously: “Technical” (referred to as either “Part 1” or “Volume 1”) and “Price” (referred to as either “Part 2” or “Volume 2”). AR 1311. 7 The Technical Part was comprised of three evaluation factors: “Management Approach for Master BPA” (“Factor 1”); “Similar Experience and Past Performance” (“Factor 2”); and “Call Order 0001 — Technical” (“Factor 3”). AR 1311. Factor 2, in turn, had two subfactors: “Similar Experience” (“Subfactor 2A”) and “Past Performance” (“Subfactor 2B”). Id. Factor 3 also had two subfactors: “Technical Approach for Call Order 0001” (“Subfactor 3A”) and “Call Order 0001 Key Personnel” (“Subfactor 3B”). Id. Following a series of RFQ amendments, Census issued a revised, conformed Solicitation on May 14, 2021. AR 2858–59. Quotes were due on May 20, 2021. AR 2757–58.
The BPA was awarded to Spatial Front, Inc. (SFI), leading Golden IT, LLC (Golden), who was one of the four finalists competing for the BPA, to file its protest at COFC. Golden made several arguments, most importantly that Census’s evaluation of Factor 3 was “‘unreasonable, arbitrary, capricious, and otherwise contrary to law’” because one of SFI’s key personnel, Mr. JH, had “‘taken a position with [another company] before Spatial Front submitted its quote and four months before Spatial Front received an award.’” Golden knew Mr. JH had left SFI to take a position with a new company based on viewing his LinkedIn account, and Judge Solomson granted Golden’s motion to supplement the administrative record with the relevant LinkedIn information. Mr. JH was still working at SFI on May 20, 2021, when SFI submitted its quote, but left SFI and began working elsewhere “by May 31, 2021, at the latest.”
Judge Solomson also found that, although the record showed that the solicitation stated that the “‘availability and commitment of Key Personnel is important to the Government,’” the solicitation did not require “any documentation, such as letters of commitment, assuring the continued availability of key personnel.” The CO determined that Mr. JH represented a significant strength as the Information Specialist/Knowledge Engineer in SFI’s quote. In awarding the BPA to SFI, the CO found SFI’s superior technical approach, which included its significant strength for key personnel, justified awarding to SFI, even though their approach cost $1,299,705.60 more than Golden’s.
Ultimately, Judge Solomson found that Golden was not entitled to relief and that Census had acted appropriately in selecting SFI for the award of the BPA. Judge Solomson determined that, if SFI had known Mr. JH would leave the company at the time they submitted their quote, then they would have submitted a quote containing a material misrepresentation, but that the record lacked any indication that SFI knew of Mr. JH’s impending departure.
Most importantly, Judge Solomson directly engaged with and rejected GAO’s disclosure rule. He stated that “the Court is unable to locate the basis for the GAO’s rule” and that the rule “strikes the Court, candidly, as without legal basis and ‘unfair.’” He continued, noting that “the Court will not conjure up a rule” that was “untethered from a statute, regulation, or Federal Circuit decision.”
C. GAO Doubled Down, and Possibly Expanded, Its Own Disclosure Duty Precedent
Following COFC’s ruling in Golden IT, GAO had an opportunity to revisit its key personnel absences precedent in Sehlke Consulting, LLC (Sehlke). In the sustained protest, Sehlke argued that the awardee’s proposal was technically unacceptable “because one of its proposed key personnel became unavailable to perform on the resulting contract prior to the agency completing its evaluation and award decision.” The solicitation stated that the
award was to be made on a best-value tradeoff basis with non-cost and cost factors to be given equal weight. The non-cost factor included five constituent “items,” which are listed in descending order of importance: (1) management; (2) past performance; (3) organizational conflict of interest; (4) intellectual property; and (5) security . . . . The management item was further divided into four factors: (a) key personnel; (b) staffing; (c) management approach; and (d) transition approach. The key personnel factor was slightly more important than the staffing and management approaches factors, which in turn were slightly more important than the transition approach factor.
These evaluation factors highlight the great emphasis placed on the key personnel that each offeror put forward in their proposals. After proposals were submitted, but before a source selection decision was made, the eventual awardee, KPMG, notified the Department of Defense’s National Reconnaissance Office (NRO) that one of its key personnel was retiring. NRO still awarded the contract to KPMG, despite knowing that a key employee would not be present to perform the contract, citing the fact that at the time of the source selection decision, the employee was still with the company.
Instead of following COFC’s new direction, GAO directly dismissed Golden IT and reiterated its rules requiring disclosure and appropriate agency action in response to the disclosure of the absence of key personnel. In a footnote, GAO stated that, “as an initial matter, our Office is not bound by decisions of the Court of Federal Claims” and that, “in any event, the facts of that case are materially distinguishable from the facts at issue here.” The facts are distinguishable between Sehlke and Golden IT, as the agency in Sehlke knew that the key personnel would be unavailable to perform, whereas in Golden IT, it was not proven that the parties knew that the key employee would soon depart. Regardless, GAO was asked by the agency and the intervenor to rely upon the legal conclusion from Golden IT and instead rejected Judge Solomson’s conclusion that there was no duty to disclose. Attorneys from Crowell & Moring LLP commented on the new ruling in a blog post. They noted that Sehlke . . . “signals GAO’s continued willingness to sustain bid protests when key personnel become unavailable after proposal submission. In fact, it arguably extends the doctrine, as even prospective unavailability can now be problematic.”
IV. The Problems Raised by the Lingering Circuit Split
This circuit split creates the prospect of a reverse protest. During a reverse protest, a protester that first filed their protest at either GAO or the procuring agency can likely proceed to file a protest at COFC if GAO or the procuring agency does not rule in their favor or offer the requested relief. For example, in the following scenario (Scenario One), assume a competition is down to two competitors, A and B, and A is awarded the contract, but later learns that a member of the key personnel it submitted is leaving to join another company. Under GAO precedent, A has an affirmative duty to inform the procuring agency of the absence. This means that if B learns of the unavailability of A’s key personnel, B could successfully bring its bid protest at the GAO. If GAO sustains the protest and the procuring agency follows the GAO recommendation, A may then file a bid protest at COFC alleging that, by following the GAO recommendation, the procuring agency acted unreasonably, with COFC reviewing the case. As the twenty-four active COFC judges are not required to follow Judge Solomson’s ruling in Golden IT, the resolution of the case may be decided merely by the judge it is assigned to, rather than by a coherent body of law. If that judge follows Judge Solomson’s decision in Golden IT, A will be able to keep its contract award. If the judge declines to follow Judge Solomson, however, the award will likely be set aside. In either instance, the ultimate ruling will be issued after extensive litigation across two tribunals. This process will be costly to both the contractors seeking relief and require government resources to defend the agency’s actions. This result wastes time, in addition to private and public money that would be better spent elsewhere.
Another scenario (Scenario Two) could involve B, from above, first filing its protest at COFC, with a ruling in favor of A because COFC elected to follow Judge Solomson’s approach. Although COFC does expedite bid protest cases, the case is unlikely to be resolved within the ten days necessary to be timely at GAO. At that point, it is likely too late for the protester to file a protest at GAO or the procuring agency where more favorable precedent should govern the protest. While this problem seems less likely to occur, and could be an error made by the protester in choosing its forum, the fact that B may have won at COFC on these protest grounds highlights the uncertainty surrounding this issue and the importance of quickly identifying a workable solution.
Scenario Two also raises the controversial issue of forum shopping. Forum shopping is when “‘the parties attempting to bring the case in a forum that will be advantageous to them’ or ‘the act of seeking the most advantageous venue in which to try a case.’” Outside of the government contracts context, there are diverse opinions about the role of forum shopping in shaping the legal system with three primary groups of thought. The dominant point of view is that forum shopping is something to be avoided in favor of uniformity and should be eliminated from practice whenever possible. However, others disagree and instead favor forum shopping as a useful tool for strategic attorneys to help their clients. The third and final group passes judgment on the doctrine on a case-by-case basis, labeling the specific instance of forum shopping as a positive or negative depending on the specific facts of the case, rather than on a per se basis.
Here, the chief problem with forum shopping is that the state of the law leaves outcomes uncertain. When no coherent body of the law provides clarity for the parties, the exact obligations of the contractor will lead to disputes. Stephen Bacon, a government contracts attorney at Rogers Joseph O’Donnell, recognizes the hardships created by the uncertainty. He recommends that contractors implement incentives into the contracts of their key personnel that would entice them to remain employed with the company while the procuring agency reviews proposals and selects the winning contractor. This is practical advice to avoid the problem, but, if a key employee decides to leave the company, or even just retires or falls ill, the problem remains, what should the contractor do? They could inform the agency and potentially lose out on the opportunity to compete for the contract award, or they could rely on Golden IT before COFC to claim they owe no affirmative duty to inform the agency of the absence. Bacon describes this dilemma as “a difficult choice with no clear legal answer.”
In the context of the Great Resignation, this dilemma is unlikely to be resolved with time, and instead may become more acute for contractors and agency personnel. In addition, contractors have increasing access to information regarding their competitor’s employees via LinkedIn, giving B in the above hypothetical scenarios a greater possibility of finding out about the unavailability of A’s key personnel and initiating a bid protest to correct the defect. This possibility would mean an uptick litigation that slows down procurements, without cutting into the problem underlying the protest ground. Government personnel working for the procuring agencies will also have access to this publicly available information, which means that A is less likely to avoid the detection of its key personnel absence, either by the procuring agency or its watchful competitors. Regardless, A lacks clear guidance as to whether its failure to disclose the absence is material, since COFC may hold they did not have a duty to disclose at all. Both the agency and A’s competitors’ access to often public employment information emphasize the need to resolve the circuit split between GAO and COFC quickly, rather than allowing the problem to linger and constrain the procurement system.
Ultimately, the circuit split harms both the procuring agency and offerors competing for government contract awards. Both parties must remain diligent about the issue of key personnel becoming unavailable to perform the contract after proposals have been submitted. This diligence will be rewarded at GAO if an awardee’s competition discovers a key employee has become unavailable. But the awardee may prevail in the end and keep their award after COFC’s review of the procurement, as occurred in the reverse protest from hypothetical Scenario One. In the end, both sides will be forced to spend money to litigate this unsettled area of government contracts law, leading to delays in the procurement process that defeat the purpose of a procurement system—ensuring the government receives what it set out to buy in the first place.
V. Resolving the Circuit Split
This section will discuss three solutions to the issues caused by key personnel absences. The first solution is to revise the FAR, establishing a regulatory framework for GAO’s disclosure duty with additional measures to protect government contractors when one of their key employees inevitably departs. The second solution is to reimagine how agencies use their solicitations. The solicitation must still convey the requirements the government seeks, but without unnecessarily burdening potential offerors and the awardee whenever possible. Finally, the issue can be avoided all together if the departing employee is willing to perform the contract if their former employer is awarded it.
A. Revise the FAR to Include GAO’s Disclosure Duty in the Federal Procurement Regulatory Scheme and Add Procedural Safeguards That Protect Complying Government Contractors
When federal courts of appeals face a circuit split, the issue will linger until the Supreme Court grants certiorari to definitively rule on the issue, settling the dispute. While this solution could play out in the government contracts context, too, with either the Federal Circuit or even the Supreme Court ruling on the issue of what a contractor must do when their key personnel become unavailable, GAO would not be formally bound by that ruling, and the split may linger. While it is unlikely that GAO would reject the Federal Circuit or Supreme Court’s ruling, waiting for the right case to land on these appellate courts’ dockets may take years while the issue continues to plague federal procurement. In theory, GAO could also alter its own approach and ignore its duty to disclose precedents, or Judge Solomson and COFC could return to follow GAO’s lead instead of creating their own rule, but these are both also unlikely to occur and would likely take considerable time, all the while leaving the state of procurement law unsettled.
Instead of waiting for a higher court to intervene, or one of the two tribunals to reverse itself in favor of the other’s solution, the best resolution of this issue is for the Federal Acquisition Regulatory Council (FAR Council) to revise the FAR to solve the circuit split. The multi-pronged solution this Note proposes favors the GAO’s duty to disclose the absence of key personnel, but with important alterations to alleviate the hardships facing a contractor who has lost its key employee after the deadline for submitting proposals has expired. The GAO rule, though seemingly harsh, accomplishes one of the important goals of a procurement system—“customer satisfaction.” If the procurement ends before the procuring agency can obtain the products or services that it set out to obtain, then the procurement has failed. It may be unreasonable to permit an offeror to maintain its contract award, despite the departure of the key personnel that the agency evaluated in the proposal and relied upon to perform the contract, even if it is not the contractor’s fault that they lack the appropriate staff. This result also undermines the procurement and leaves the government without the products or services it specifically bargained for.
While it is crucial that the government receive value in exchange for the public funds that it spends on procurements, it is also important to cultivate competition as part of a healthy procurement system. This Note’s solution seeks to ensure that the procuring agency receives the value it sets out to acquire without placing undue burdens on the offerors competing for the award. While procurement goals in general often contradict each other, by proposing a solution that allows the government to receive the highest quality services and products without eliminating offerors from competition for key personnel departures, these two goals can be balanced.
The FAR should be revised to explicitly require that offerors alert the procuring agency when their proposed key personnel become unavailable to perform the contract. If the proposal deadline has not yet passed, the offeror can simply revise and resubmit its proposal. When the proposal submission deadline has passed, the FAR should mandate that the CO allow the offeror affected to correct its proposal, if the offeror is able to, by replacing its departing key personnel with a new qualified individual who will be able to perform the contract.
One potential mechanism for this correction is through a substitution procedure as envisioned by Vernon J. Edwards, researcher, writer, and lecturer in federal contracting. This substitution provision would read:
SUBSTITUTION OF PROPOSED KEY PERSONNEL
(a) If, after submission of proposals, but before contract award, an offeror learns that any of its proposed key personnel are no longer available for contract performance, the contracting officer will permit the offeror to substitute another person, provided that the government finds that the person previously proposed would have been acceptable in accordance with the evaluation factors.
(b) An offeror will not be permitted to improve the evaluation of its proposal through substitution of proposed key personnel. Depending on the substitute’s résumé, he or she will receive either the same evaluation as the person previously proposed or a lower evaluation, as appropriate in accordance with the evaluation factors for award. Under no circumstances will the substitute receive a better evaluation than the person previously proposed, regardless of the content of his or her résumé.
(c) An offeror seeking to make such a substitution before award must notify the Contracting Officer in writing by submitting a brief explanation, accompanied by the substitute’s résumé prepared in accordance with Section L of this solicitation.
(d) Substitutions made before contract award in accordance with this procedure shall not be considered proposal revisions. Acceptance of any such substitution by the Government shall not constitute discussions as described in FAR 15.306 and FAR 52.215-1 and shall not require the Contracting Officer to make a competitive range determination. Such substitutions shall not be considered late proposal submissions as described in FAR 52.215-1. After contract award, key personnel substitutions shall be processed in accordance with the contract Key Personnel clause.
While this substitution scheme offers a step in the right direction, its drawbacks prevent it from becoming implementable. One issue is that the agency would first need to evaluate the initially proposed employee. This step takes time that would be best spent evaluating the replacement employee. The ability of the original employee no longer has any impact on the procurement since the original employee will not be involved in its performance even if the company is awarded the contract. In addition, the scheme does not allow the procuring agency to receive the best possible value, because “under no circumstance” will the new employee receive a higher evaluation than the original. Cumulatively, these defects waste time and harm the government’s ability to procure the quality that it seeks, making the proposed solution unworkable.
Instead, this Note proposes that when identified key personnel become unavailable after the deadline for proposal submissions, the offeror must first alert the CO in writing of the absence. Maintaining this affirmative duty is important because it will allow the CO to intervene, and because it provides the government with important information that will allow the procuring agency to make an informed source selection. Next, the CO would be required to open, or re-open, discussions depending on the earlier stages of the procurement. By turning to discussions, the offeror can correct its defective or non-responsive proposal by replacing its departing employee with a new one if it is able to. This replacement employee will be scored as they are, uncapped by the performance value of the original employee submitted with the proposal, unlike in Vernon J. Edward’s proposed solution.
The new language in the solicitation would read:
Unavailability of Key Personnel Prior to Contract Award, but After the Submission Deadline Has Expired
a) If an Offeror knows or should have known that one or more of its proposed key personnel will not be available to perform the contract during the period between the proposal submissions deadline and the awarding of the contract, the Offeror shall notify the Contracting Officer in writing of the unavailability of its previously proposed key personnel and explain the circumstances of the employee’s departure.
b) The Contracting Officer will then determine if the absence is justified and submit a written determination to the Offeror. An absence will be presumed to be justified; however, circumstances that would defeat this presumption include: a Contracting Officer’s determination that the original employee never intended to perform the contract, bad faith acts of an Offeror, or any other circumstances the Contracting Officer deems unreasonable.
c) If the Contracting Officer determines that the absence is justified, the Contracting Officer shall next establish a competitive range and open discussions with all qualifying offerors. The scope of the discussions shall be limited to the issue of Key Personnel, and no other revisions will be accepted by the Agency. Discussions shall be held on an accelerated basis to avoid undue delay to the procurement.
d) If a key personnel absence occurs after contract award, the Contracting Officer and Contractor shall follow the procedures in Section H of the Contract, Substitution of Key Personnel.
This format will optimize customer satisfaction and maintain higher levels of competition. The end user will be happier with their selection because the best offer can be selected, instead of limiting the scoring of the key personnel to the value of the departing individual. Competition is also improved because the offeror facing the staffing problem will be allowed to reenter the competition and replace its key personnel with another qualified individual, as opposed to the current GAO rule that provides the CO with the requisite discretion to dismiss that offeror without the opportunity to fix their non-responsive proposal.
Competition will also be fair and equal because this exchange has been made through the normal discussions process of a negotiated procurement. The use of discussions means that all offerors will be given the opportunity to revise their proposals if they so choose. It is important to recognize that extending discussions may add time to the procurement process, but the CO will maintain their discretion to narrow the competitive range as they see fit, and the scope of the discussions will be limited to key personnel. Ultimately, the time used by the discussions process is not nearly as wasteful or long-lasting as the time taken up by a reverse protest laid out in scenario one above.
One advantage of this regulatory approach is that it undermines a valid critique of the GAO rule—that it is judicially created as opposed to an application of existing procurement statutes and regulations. Judge Solomson wrote in Golden IT that the GAO rule struck “the Court, candidly, as without legal basis.” Vernon Edwards in his article critiquing the GAO rule, referred to the rule as “GAO diktat” and was critical of its existence “without publication in the Federal Register and an opportunity for public comment.” With this FAR revision, the new rule would become part of the controlling regulations and would ease the concerns of those who saw no basis for the GAO rule in the existing statutory or regulatory scheme.
B. Creating Further Clarity Through the Solicitation
While this Note’s primary recommendation is to amend the FAR to root the GAO’s duty in the controlling regulations, the solicitation is also key to resolving the issue by letting offerors know what rules apply to the specific procurement. As a broad policy change, procuring agencies should phrase key personnel requirements in the solicitation to favor stated experience criteria as opposed to individually named employees. For example, instead of requiring an employee’s name and resume to be submitted with the proposal, the contractor would certify that they have someone who meets the stated requirements. This change would allow the winning contractor more latitude to insert the key employee who will perform the contract.
This switch would mirror the distinction between a Statement of Work (SOW), also called a design specification, and a Performance Work Statement (PWS), also called a performance specification. The FAR does not define a SOW, but it is understood as when the procuring agency specifies step-by-step instructions for how a contractor is supposed to perform the work required by the contract. In comparison, a PWS is defined in the FAR as “a statement of work for performance-based acquisitions that describes the required results in clear, specific and objective terms with measurable outcomes.” Instead of specifying the work process, the PWS describes the end result that the agency seeks. The FAR also shows a preference for the PWS as shown by FAR 37.602, which specifies that COs should use a PWS to the “maximum extent practicable.” The change that this Note proposes mirrors this preference. Instead of requiring resumes and names of key personnel, to the maximum extent practicable, the requirement should be stated in broad terms that show the end result that the agency is seeking. Examples would include five-plus years of management experience or an advanced degree in engineering, as opposed to requiring a named individual and their resume.
C. Commitment Contracts Signed by the Departing Employee
Another option that would ease the burden on offerors is to allow a departing employee to sign a contract that commits them to perform the government contract being competed for if the company they are leaving is selected for the contract award. Not all departing employees will be willing to commit to a project with their former employer, but some might, depending on their individual circumstances and obligations to new employers. These commitment letters would bind the employee to the contract to ensure their performance and effectively negate the issue caused by their departure.
VI. Conclusion
The COVID-19 pandemic disrupted every aspect of society and continues to impact the daily lives of many people around the globe, including in the United States. The pandemic also brought about sweeping economic changes like the Great Resignation, as employees across sectors sought better employment opportunities. Amid this shift of personnel, COFC released an opinion clashing with a long-standing and much maligned GAO precedent that required offerors to disclose key personnel absences to the procuring agency even after the proposal submission deadline had expired. The resulting circuit split must be addressed, and quickly, to avoid costly litigation and confusion.
This Note has proposed three solutions that would eliminate the circuit split. First, and most importantly, the FAR must be amended to include the GAO’s rule but with additional procedural safeguards that protect a contractor from being removed from the competition solely because of a key personnel absence. Second, agency solicitations should be written with a strong preference for performance solicitations. Finally, departing key personnel should be permitted, though not required, to sign letters of commitment that bind them to the contract if their former employer wins the award. These solutions fairly and efficiently return government procurement law to a level ground and helps avoid costly and time-consuming litigation that will only worsen as government contractors continue to feel the impact of the Great Resignation.
