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Key Personnel Clauses in RFP's
Each year the Federal Government buys a large amount of services of every imaginable kind. Examples include information technology work, health care, architect and engineer services, and many, many more.
Frequently included in a solicitation to acquire services is a Key Personnel clause. The Government has a keen interest in knowing who on the contractor's staff will have responsibility for the day-to-day operations of major segments of the work. Examples of such positions are Program Manager, Project Manager, Senior System Analyst, Chief Nurse, Lead Engineer, Supervisor of Mechanics, and so forth.
The Key Personnel clause will vary slightly from one RFP to another. But in general it will:
- identify the key positions
- require resumes of the proposed key persons
- require offerors to submit letters of commitment from the key personnel and/or contingent letters of offer and acceptance counter-signed by the employer and the prospective employee
- insist that the proposed Key Personnel be qualified to perform the work
- usually require a minimum amount of time after award when the key person(s) must remain on the job, such as 90 days or 6 months, except for a catastrophic event (e.g., illness, accident, or death).
When an offeror is preparing a proposal that includes a requirement to provide Key Personnel, not only must the offeror "answer the mail" but they must also provide bone fide, accurate information to the Government. Stated differently, an offeror cannot misrepresent the status of the key persons proposed to work on the project.
The issue of Key Personnel was recently the subject of a decision by the General Accountability Office (GAO). They issued an Advisory Opinion to the U. S. District Court for the Northern District of California in the Matter of Patriot Contract Services, Number B-294777.3, May 11, 2005. The case arose when the Navy awarded a contract in response to an RFP for the operation and maintenance of nine large, medium speed roll-on/roll-off (LMSR) ships to move cargo in support of U. S. military forces worldwide.
The RFP required offerors to include in their proposal resumes and letters of commitment from key persons that "reflect mutually agreed position, salary, and benefits" and their agreement to work on the contract for at least 90 days. Although Patriot Contract Services (PCS), the incumbent contractor, provided the required information, the Navy Source Selection Authority awarded the contract to American Overseas Marine Corporation (AMSEA), a contractor with a lower price.
PCS filed a protest at the GAO, then withdrew the protest and filed an action at the U.S. District Court. PCS alleged in their protest that AMSEA misrepresented the availability of certain Key Personnel. PCS noted that AMSEA placed advertisements for Port Engineers in the local print media immediately after award. Therefore, AMSEA did not have the Key Personnel it proposed.
PCS gave GAO a record of statements the President of AMSEA had made to the Court. The GAO held a conference call with Counsel and the proposed Port Engineers. Five (5) of the six (6) proposed engineers denied agreeing to work on the LMSR contract. Furthermore, the engineers claimed that, prior to the award of the contract, AMSEA never discussed employment, salary, benefits, or positions with them. When GAO questioned the President of AMSEA about the discrepancy, he claimed the Navy changed the location of the layberths of the LMSR. However, when PCS pointed out that the Navy did not change the locations and that this assertion was not correct, AMSEA acknowledged a mistake but insisted the letters of commitment were accurate. GAO deemed AMSEA's assertion an inaccurate representation.
The GAO's decision was that AMSEA made a material misrepresentation of fact in their proposal and, therefore, the PCS protest was sustained as meritorious. GAO further stated that because the Navy relied on this material misrepresentation by AMSEA, there is a substantial chance that the Navy awarded the contract to AMSEA based on the "very good" evaluation of this misrepresentation rather than awarding the contract to PCS, in part, on what should have been a negative evaluation of the Key Personnel proposed by AMSEA.
In accord with other decisions, the GAO held that "a proposal containing material misrepresentation of fact should disqualify the proposal from consideration for award, noting that the integrity of the procurement process demands no less." The GAO went on to tell the U. S. District Court that if they (GAO) were the final deciding authority, they would sustain the protest "and recommend that AMSEA's contract be terminated and that a contract be awarded to PCS if otherwise appropriate."
The moral of the story here is that all offerors, when including Key Personnel in a proposal in response to an RFP, must accurately, comprehensively and correctly provide the information about the key person(s) requested in the solicitation. Inaccurate information is a material misrepresentation and could result in loss of the contract or later termination.
By the way, the contract award that GAO recommended be terminated had a value of $122.6 million!
Tom Petruska, Owner
Contract Unlimited Incorporated
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