DGG RE Investments, LLC- dba Guardian Asset Management (12SAD122R0001)

B-420905 Oct 25, 2022 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Orlans PC, of Troy, Michigan, protests the terms of request for proposals (RFP) No. 12SAD122R0001, issued by the Department of Agriculture, Rural Development Administration, for nationwide default management services. The protester contends that certain pricing and payment terms are inconsistent with customary commercial practice and unduly restrictive of competition. We sustain the protest. View Decision DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Decision Matter of: Orlans PC File: B-420905 Date: October 25, 2022 Samuel S. Finnerty, Esq., Katherine B. Burrows, Esq., and Patrick T. Rothwell, Esq., Piliero Mazza PLLC, for the protester. Elin Dugan, Esq., Department of Agriculture, for the agency. Nathaniel S. Canfield, Esq., and Evan D. Wesser, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest challenging the terms of a solicitation for commercial services is sustained where the record does not show that the agency performed adequate market research to demonstrate that the terms were consistent with customary commercial practice, as required by the rules applicable to commercial item procurements set forth in the Federal Acquisition Regulation at part 12. DECISION Orlans PC, of Troy, Michigan, protests the terms of request for proposals (RFP) No. 12SAD122R0001, issued by the Department of Agriculture, Rural Development Administration, for nationwide default management services. The protester contends that certain pricing and payment terms are inconsistent with customary commercial practice and unduly restrictive of competition. We sustain the protest. BACKGROUND The agency issued the RFP pursuant to Federal Acquisition Regulation (FAR) part 12 on May 6, 2022, and subsequently amended it eight times. Contracting Officer’s Statement (COS) at 1‑2. The RFP seeks proposals to provide nationwide default management services for the Rural Development Single Family Direct Loan portfolio, including foreclosure services, real estate owned (REO) services, property preservation services, appraisal services, eviction services, and bankruptcy services. Agency Report (AR), Tab 23, Attach. 11, Performance Work Statement (PWS) at 55‑56.[1] The RFP anticipates award of two or more indefinite‑delivery, indefinite‑quantity contracts containing both fixed‑price and time‑and‑materials line items, with award to be made on a best‑value tradeoff basis. AR, Tab 22, RFP at 96, 123. As relevant to this protest, the RFP contains fixed‑price line items for property preservation and maintenance services. RFP at 3, 7. Under these line items, the selected contractors will be responsible for performing a variety of initial and recurring services to preserve and maintain properties (e.g., securing the property, lawn service, boarding or re‑glazing windows, roof repairs, winterization, pest control), with payment to be made at a fixed, monthly price per property. Id.; PWS at 61, 64‑65. Services under these line items will be invoiced on a monthly basis. RFP at 66 (detailing invoicing schedule for line items X004 and X013). The RFP also contains a fixed-price line item for uncontested foreclosure services and a time‑and‑materials line item for contested foreclosure services. RFP at 2‑3. Under those line items, the selected contractors will be entitled to payment of the fixed price for all foreclosure actions, with additional services to be billed on a time-and-materials basis when the foreclosure is contested. PWS at 59‑61. Services under these line items will be invoiced only upon the government’s receipt of an unencumbered title. RFP at 66 (detailing invoicing schedule for line items X001 and X002). Prior to the deadline for the submission of proposals, Orlans filed this protest challenging the terms of the RFP. DISCUSSION The protester alleges that the RFP’s property preservation and maintenance service pricing terms and the foreclosure services invoicing terms are contrary to customary commercial practice. Specifically, the protester alleges that customary commercial practice is not to bill property preservation and maintenance as a flat monthly fee, as stated in the RFP, but rather according to a schedule of itemized fixed prices for each task performed. Protest at 7. With respect to foreclosure services, the protester alleges that customary commercial practice is to invoice upon completion of milestones, rather than only upon delivery of an unencumbered title as required by the RFP. Id. at 9‑10.