GAO Sustains Protest Based on Misclassified Solicitation

In TMI Management Systems, Inc., B-401530 (September 28, 2009), the Government Accountability Office (GAO) sustained a bid protest based upon the misclassification of a request for proposal (RFP) issued by the Department of Homeland Security, Federal Emergency Management Agency (FEMA). Holding that the misclassification of the RFP prevented TMI from locating the procurement opportunity and participating in the bid process, the GAO ordered FEMA to reopen the competition and reissue the RFP under the appropriate classification. TMI was also awarded attorney fees and costs related to its protest.

The RFP issued by FEMA was for the procurement of facilities support services for its temporary housing units. FEMA posted the RFP, and later the “Issuance of Final Solicitation,” on FedBizOpps under the product classification code “Miscellaneous.” On June 26, approximately one month after the closing date for receipt of proposals, TMI submitted its protest to the GAO on the grounds that FEMA’s classification of the RFP under a product code, rather than a service code, deprived TMI of the opportunity to bid on the RFP. TMI argued that this misclassification prevented businesses, like it, that would otherwise submit a proposal, from being reasonably informed as to the nature of the solicitation.

Citing the Competition in Contracting Act of 1984 (41 U.S.C. § 253(a)(1)(A) (2006)), the GAO stated that agencies are required to obtain “full and open competition through the use of competitive procedures.” The GAO further noted that by ensuring full and open competition under CICA, agencies are able to obtain a selection of proposals necessary for it to receive fair and reasonable prices. Based on the agency’s misclassification on FedBizOpps, the GAO determined that FEMA failed to meet both requirements, thus, violating its obligation to “use reasonable methods to publicize its procurement needs and to timely disseminate solicitation documents to those entitled to receive them,” and preventing prospective contractors from making “an informed business judgment” regarding whether to respond to the solicitation. In addition, while the GAO acknowledged that there was no code on FedBizOpps that precisely classified the services requested in the RFP, it determined that the classification of the RFP under “miscellaneous” was not the best fit and that the agency had an obligation to use “the most appropriate category to promote competition.”

The GAO’s decision to sustain TMI’s protest supports the fundamental notion that real competition depends upon all potential contractors having a reasonable opportunity to participate in the procurement process. The full text of the GAO’s decision, issued on September 28, 2009, can be found at:

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