Many government contractors are part of corporate families consisting of multiple corporate entities.  One entity may be named as the official contracting party, but use the resources of affiliates, parents, or subsidiaries during performance.  The distinction between those members of the corporate family may not seem important in terms of day-to-day operations — in fact, the synergy and seamlessness between the corporate entities may be a selling point.  Two recent GAO decisions make clear, however, that when it comes to bidding on government work, it is important to precisely identify which corporate entity is going to do what and which corporate entity has which resources.

In BDO USA, LLP and Intermarkets Global USA, LLC, GAO’s decisions turned on a perceived misidentification of corporate entities at some point in the procurement process.  In BDO, the problem occurred during bid submission.  In Intermarkets, the problem occurred when the protest was filed.

BDO: Keep Your CAGE Codes Straight

BDO concerned a request for quotations issued to holders of GSA’s Federal Supply Schedule Professional Services Schedule contracts.  The RFQ required each offeror to list its commercial and government entity — or CAGE — code.  It also required each offeror to have a facility clearance, and therefore instructed each offeror to submit a form DD-254.

When the procuring agency reviewed the quotation of the protester, BDO USA, LLP, it discovered that the CAGE code listed on BDO’s cover letter and DD-254 (6YTUO) was different than the CAGE code associated with BDO’s schedule contract (32ZC7).  Compounding the confusion, the government’s databases showed multiple entries for BDO with different geographic locations, each of which operated under either 6YTUO or 32ZC7.

BDO’s answers to the agency’s questions further muddied the waters.  First, BDO said that the CAGE code on its proposal should be switched from 6YTUO to 32ZC7.  Then, BDO said that 6YTUO was the correct CAGE code.  Still later, BDO told the agency that 32ZC7 was the CAGE code for its schedule contract, while 6YTUO was the CAGE code for its “subsidiary” with a facility clearance called BDO Public Sector, LLC.

The agency found BDO to be ineligible for award because the CAGE code listed in the cover letter did not match the CAGE code associated with the schedule contract, the CAGE code in the cover letter did not have an active System for Award Management (SAM) registration, and the CAGE code associated with the schedule contract did not have an active facility clearance.

In its protest, BDO argued that the facility clearance was not associated with the BDO Public Sector, LLC subsidiary, and in fact belonged to the same BDO entity that held the schedule contract.  It also attempted to clarify this by making a new entry in the SAM database.  GAO denied BDO’s protest, reasoning that none of this information was before the agency when it made its decision.

Take-away?  Proposals should clearly identify which corporate entity will be doing the work and which corporate entity holds the required resources and tools for performance.  And it is equally important to accurately answer agency questions regarding corporate structure.

Intermarkets: Remember Who Made the Offer  

In Intermarkets, a company named “Intermarkets Alliance” submitted a proposal together with its co-adventurer.  After the joint venture lost out on award, a company named “Intermarkets Global USA, LLC” filed a protest with GAO.  GAO dismissed the protest on the basis that Intermarkets Global USA, LLC was not an interested party — as the offer had been submitted by Intermarkets Alliance.

Although Intermarkets Global USA, LLC argued that it was part of the “same group of entities” that would have performed the contract had it been awarded to Intermarkets Alliance, “there was nothing in the record” indicating that Intermarkets Global USA, LLC would have been in privity of contract with the government.  Therefore, Intermarkets Global USA, LLC could not meet GAO’s test for interested party status.

Take-away?  The entity filing the protest should be the same as the entity that submitted the proposal.  (And if intervening corporate restructuring makes that not possible, that raises its own considerations, which should be addressed on a case-by-case basis.)