M6700420R0012LionVallenProtestRedacted (1).pdf

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THOMPSEON

February 21, 2020

BY ELECTRONIC DELIVERY

ATLANTA CINCINNATI COLUMBUS NEW YORK

CHICAGO CLEVELAND DAYTON WASHINGTON, D.C.

U.S Government Accountability Office Attn: Procurement Law Control Group Office of the General Counsel 441 G Street, N.W.

Washington, D.C. 20548

CICA STAY REQUIRED

PROTECTIVE ORDER REQUESTED

Re: Pre-Award Protest of Lion Vallen, Inc. under United States Marine Corps Solicitation No. M67004-20-R-0012

Dear Sir or Madam:

Lion Vallen, Inc. ("LVI"),1 through counsel, timely files this pre-award protest challenging the requirements of Solicitation No. M67004-20-R-0012 ("the Revised Solicitation") issued by the United States Marine Corps ("Marine Corps" or "the Agency") in support of its Consolidated Storage Program ("CSP") requirements. Specifically, LVI challenges the Marine Corps' failure to address the unfair competitive advantage provided to other offerors competing under the Revised Solicitation caused by the Agency's release of LVI proprietary information and to conduct a proper investigation of a violation of the Procurement Integrity Act ("PIA"), 41 U.S.C. §§ 2101-2107, caused by that information release. The Marine Corps alerted LVI in January 2020 that it had provided discussion questions drafted for LVI regarding LVI's proposal submitted in response to Solicitation No. M67004-19-R-0004 ("the Original Solicitation") to another competitor in November 2019. Those discussion questions contained proprietary information regarding LVI's proposal, including . The Agency cancelled the Original Solicitation in response to the information release, but did not advise LVI of the release of its proprietary information or the reason for the cancellation of the Original Solicitation until January 2020. On January 30, 2020, the Agency released the Revised Solicitation. As part of the Revised Solicitation, the Agency released a revised pricing attachment, Attachment 22, which contained additional LVI proprietary information.

1 LVI's address is 7200 Poe Avenue, Suite 400, Dayton, OH, 45414, its telephone number is (800) 548-6614, and contact e-mail is aschwartilit,lionprotects.com. All communications regarding this protest should be directed to the attention of undersigned counsel.

Chip.Purcell@ThompsonHine.com Fax: 202.331.8330 Phone: 202.263.4118

THOMPSON HINE LLP

ATTORNEYS AT LAW

1919 M Street, N.W.

Suite 700 Washington, D.C. 20036-3537 wwwalsompsonHine.com Phone: 202.331.8800 Fax: 202.331.8330

THOMPSHINEON

U.S Government Accountability Office February 21, 2020

LVI protests the terms of the Revised Solicitation, specifically the Marine Corps' failure to revise the terms of the CSP solicitation to mitigate the unfair competitive advantage caused by the Agency's release of LVI proprietary information. An examination of the Original and Revised Solicitations demonstrates that the Agency has failed to make any substantive changes to the CSP requirements, and those changes reflected in the Revised Solicitation do not impact the manner in which offerors would staff or price the CSP requirements. As a result, competitors to LVI continue under the Revised Solicitation to enjoy an unfair competitive advantage due to the Marine Corps' repeated release of LVI proprietary information.

LVI also protests the Agency's failure to undertake an appropriate and thorough investigation of a potential violation of the PIA caused by its release of LVI proprietary information. Upon first learning of the Agency's transmission of LVI proprietary information to a competitor, LVI timely requested that the Marine Corps conduct an appropriate PIA investigation. The Marine Corps responded by providing a summary overview of its investigation in November 2019 of the information release, and its summary reflects an incomplete investigation that failed to consider the effect on the Revised Solicitation caused by the release of LVI proprietary information.

LVI requests that the Government Accountability Office direct the Marine Corps to cancel the current Revised Solicitation and undertake a thorough analysis of appropriate revisions to the CSP solicitation to mitigate the unfair competitive advantage created by the Agency's release of LVI proprietary information. LVI further requests the GAO to direct the Agency to undertake an appropriate and thorough PIA investigation related to the information release, including consideration of the impact of the release of LVI proprietary information on the CSP procurement.

I. INTERESTED PARTY STATUS

LVI is an interested party under 4 C.F.R. § 21.0(a) with respect to the Revised Solicitation. LVI, a past incumbent prime contractor and current subcontractor providing the CSP requirements, is an actual offeror under the Revised Solicitation with a direct economic interest in the procurement (and submitted a proposal in response to the Original Solicitation).

LVI therefore has standing to challenge the terms of the Revised Solicitation.

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February 21, 2020

II. TIMELINESS

LVI's protest is timely, both with respect to its challenge to the terms of the Revised Solicitation and the Agency's failure to conduct a proper investigation of the violation of the PIA caused by its release of LVI's proprietary information.

With respect to LVI's challenge to the terms of the Revised Solicitation, LVI files this protest before the time set for the receipt of proposals in response to the Revised Solicitation, which is February 28, 2020. 4 C.F.R. § 21.2(a)(1).

With respect to LVI's allegations regarding the Agency's violations of the PIA, LVI first learned of the Agency's improper release of LVI proprietary information in a letter from the Marine Corps dated January 23, 2020. See Attachment ("Att.") 1. (The information release occurred in November 2019, but the Marine Corps did not provide notice to LVI of the release until its letter dated January 23, 2020.) In response, LVI wrote to the Marine Corps on January 31, 2020, advising the Agency of a violation of the PIA and requesting the Agency to conduct an appropriate investigation. See Att. 2. LVI sent its letter, alerting the Agency of a potential PIA violation, eight days after initial notice of the information release, well within the 14-day requirement mandated by the GAO. See 4 C.F.R. § 21.5(d) ("For any Federal procurement, GAO will not review an alleged violation of subsections (a), (b), (c), or (d) of sec. 27 of the Office of Federal Procurement Policy Act, 41 U.S.C. 2101-2107, as amended by sec. 4304 of the National Defense Authorization Act for Fiscal Year 1996, Public Law 104-106, 110 Stat. 186, February 10, 1996, where the protester failed to report the information it believed constituted evidence of the offense to the Federal agency responsible for the procurement within 14 days after the protester first discovered the possible violation."). The Agency responded by letter dated February 12, 2020, addressing its analysis of a potential PIA violation. See Att. 3.

Because LVI files this protest alleging that the Agency failed to conduct a proper PIA investigation within 10 days of receipt of that letter, this protest is timely with respect to LVI's PIA allegation. See 4 C.F.R. § 21.2(a)(2); CACI, Inc. — Fed; Gen. Dynamics One Source, LLC, B-413860.4 et al., Jan. 5, 2019, 2018 CPD ¶ 17 ("Here, because the agency clearly advised the protester that it had found no PIA violation, the protester was required to file a protest with our Office challenging the agency's conclusion within 10 days.").

LVI files this protest through GAO's Electronic Protest Docketing System, which automatically generates an e-mail notifying the procuring agency that an interested party has protested the procurement. Upon such notice, the Competition in Contracting Act of 1984 prohibits the Marine Corps from awarding the challenged contract during the pendency of this protest. See 31 U.S.C. § 3553(c); FAR § 33.104(b).

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U.S Government Accountability Office February 21, 2020

III. CONTRACTING OFFICER INFORMATION

The contracting officer for this procurement is Kimberly Dandridge. Ms. Dandridge's telephone number is (229) 639-6753, her fax number is (229) 639-8232 and her e-mail is kimberlv.dandridge(ivusmc.mil. Pursuant to the GAO's rules, LVI will provide a copy of this protest to Ms. Dandridge within one day of filing.

IV. BACKGROUND

A. Original CSP Solicitation

On March 18, 2019, the Marine Corps issued Solicitation No. M67004-19-R-0004 ("the Original Solicitation") for the Marine Corps' CSP requirements. The Original Solicitation stated that "[t]he purpose of this contract is to provide for the Management and Operational services for the Marine Corps' CSP worldwide network facilities and to maintain total asset visibility."

Original Solicitation § 1.0. The Original Solicitation further stated:

The Contractor shall provide logistics services to manage, support, and operate the Marine Corps CSP network. Contractor efforts shall include overall coordination, streamlining, and supervision of operations within the [Individual Issue Facilities] and [Unit Issue Facilities] to include [Individual Combat Clothing and Equipment], [Chemical, Biological, Radiological, and Nuclear Defense] equipment, [Special Training Allowance Pool], [Soft-Walled Shelters and Camouflage Netting], and the [Barstow Distribution Center]. The [Non-Destructive Testing and Evaluation Armor Inspection System] operation (scanning, maintenance, and repair) shall be under the cognizance of the Technical Service Contract.

However, the inventory (armor plates) shall be under the cognizance of this contract. The contractor shall provide these services to the Marine Operating Forces, Sailors, and other authorized personnel. Other authorized personnel may include Government civilian employees, contractor personnel, Individual Augmenters (IAs), and Individual Ready Reserves. All authorized personnel shall henceforth be referred to as "customers." The contractor shall serve all customers in a professional, courteous, and timely manner.

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Original Solicitation § 1.3. The Original Solicitation further stated that "[t]he contractor shall provide qualified personnel, equipment, supplies, regional transportation, tools, material handling equipment (MHE), materials, supervision, training, integrated logistics support, technical and analytical support, and supply chain and program management necessary to perform management and operations services for the CSP as defined in this PWS, with the exception of those items specified as Government Furnished Equipment (GFE), Government Furnished Property (GFP), Government Furnished Services (GFS), Government Furnished Material (GFM), and Government Furnished Information (GFI)." Original Solicitation § 2.0.

The Original Solicitation contemplated the award of a contract with a base period of approximately eight months and three one-year option periods. The Original Solicitation included three fixed-price contract line item numbers ("CLINs") and one time and materials ("T&M") CLIN for the base and option years of the contract.

As a contractor with significant experience fulfilling the Marine Corps' CSP requirements, LVI submitted a timely proposal. Following LVI's submission of a proposal in response to the Original Solicitation, the Agency wrote to LVI on November 15, 2019, noting that

. Att. 4. The letter attached a summary of items for discussion with LVI, addressing as well as

. With respect to , the summary noted :

With respect to , the summary stated:

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February 21, 2020

With respect to , the summary stated:

With respect to the summary stated:

Att. 4. The discussion questions set forth in the letter referenced LVI proprietary information included in its proposal, including

. This information addressed key components of LVI's proposal and would provide insight to a competitor of LVI's pricing and technical strategy for the Original Solicitation.

B. Cancellation of Original CSP Solicitation and Disclosure of Marine Corps Release of LVI Proprietary Information

On November 19, 2019, the contracting officer e-mailed LVI stating that the discussions planned between the parties had been cancelled "until further notice." Att. 5. On November 25, 2019, the Agency alerted LVI that it had cancelled the Solicitation in its entirety. In her e-mail, H

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U.S Government Accountability Office February 21, 2020 the contracting officer noted that the Agency's CSP Procurement requirements had "significantly changed regarding inventory of the government property managed by the awardee." Att. 6. The contracting officer further stated that "[a] new solicitation will be issued in the near future." Id.

In neither of these communications did the contracting officer state that the Marine Corps had provided LVI proprietary information to another offeror or what steps the Marine Corps had taken to investigate the release of LVI proprietary information.

The Marine Corps did not provide further information on the basis of its cancellation of the Solicitation. Nearly two months later, on January 23, 2020, the Procuring Contracting Officer ("PCO"), D.E. Beaulieu, notified LVI by letter of the Marine Corps's improper disclosure of LVI proprietary information. Mr. Beaulieu wrote:

There was an inadvertent disclosure of Lion Vallen's information during the email delivery of the discussion letters for M67004-19- R-0004 on 15 Nov 2019. Lion Vallen's discussion letter (attached) was incorrectly titled and emailed to another offeror. No other information was released. The contractor in receipt of the released information was notified on 18 Nov 2019. The offeror's response was that they had destroyed the email and attached letter.

Att. 1. The letter concluded: "The release of information and a simultaneous change in the requirement resulted in the decision to cancel Solicitation M67004-19-R-0004. Draft Solicitation M67004-20-R-0012 for the updated requirement has been posted to beta.Sam.gov for industry review." Id. The letter did not address critical issues such as the specific steps taken by the USMC to investigate the disclosure of LVI proprietary information, the reason for the three-day delay in notifying the recipient of LVI's proprietary information and the reason for the two-month delay in notifying LVI of the disclosure.

One January 31, 2020, LVI wrote to the Marine Corps regarding its release of LVI's proprietary information to a competitor as part of the CSP procurement. Att. 2. In its letter, LVI noted that the release of LVI's proprietary information could give rise to a potential PIA violation, and requested the Marine Corps to provide information regarding any investigation conducted by the agency regarding a potential PIA violation. LVI also noted that the release of LVI proprietary information created an unfair competitive advantage for LVI's competitors for the CSP procurement, as the information released by the Marine Corps provided competitors with direct insight into LVI's to the Original Solicitation.

LVI requested the Marine Corps to withhold the release of a revised solicitation until it had the opportunity to address the issues raised by LVI.

U.S Government Accountability Office February 21, 2020

C. Issuance of Revised CSP Solicitation and Additional Release of LVI Proprietary Information

Prior to issuing a written response to LVI's correspondence, the Marine Corps issued Solicitation No. M67004-R-20-0012 ("the Revised Solicitation") on January 30, 2020. Like the Original Solicitation, the Revised Solicitation sought proposals for the management and operation of the Marine Corps' CSP requirements. The Revised Solicitation employed identical text to the Original Solicitation to describe its primary purpose: "The purpose of this contract is to provide for the Management and Operational services for the Marine Corps' CSP worldwide network facilities and to maintain total asset visibility." Revised Solicitation § 1.0. The Revised Solicitation also employed a nearly identical description of the requirement's scope to that used in the Original Solicitation:

The Contractor shall provide logistics services to manage, support, and operate the Marine Corps CSP network. Contractor efforts shall include overall coordination, streamlining, and supervision of operations within the [Individual Issue Facilities] and [Unit Issue Facilities] to include [Individual Combat Clothing and Equipment], [Chemical, Biological, Radiological, and Nuclear Defense] equipment, [Special Training Allowance Pool], [Soft-Walled Shelters and Camouflage Netting], and the [Barstow Distribution Center]. The [Non-Destructive Testing and Evaluation Armor Inspection System] operation (scanning, maintenance, and repair) shall be under the cognizance of the Technical Service Contract.

However, the inventory (armor plates) shall be under the cognizance of this contract. The Contractor shall provide these services to the FMFs, Sailors, and other authorized personnel.

Other authorized personnel may include Government civilian employees, Contractor personnel, Individual Augmenters (IAs), and Individual Ready Reserves. All authorized personnel shall henceforth be referred to as "customers." The Contractor shall serve all customers in a professional, courteous, and timely manner.

Revised Solicitation § 1.3. The Revised Solicitation's description of its general requirements also was largely identical to the description provided in the Original Solicitation: "The Contractor shall provide qualified personnel, equipment, supplies, regional transportation, tools, material handling equipment (MHE), materials, supervision, training, integrated logistics support, technical and analytical support, and supply chain and program management necessary

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U.S Government Accountability Office February 21, 2020 to perform management and operations services for the CSP as defined in this PWS, with the exception of those items specified as Government Furnished Equipment (GFE), Government Furnished Property (GFP)." Revised Solicitation § 2.0.

The Performance Work Statement ("PWS") set forth in the Original Solicitation remained largely intact in the Revised Solicitation. The Revised Solicitation's PWS retained the core CSP requirements set forth in the Original Solicitation, including general contractor requirements (including pull and pre-stage; laundry; issue; receipt; storage; exchange; recovery;

and lot number control), equipment availability and readiness-for-issue (including inventory forecasting; stocking level; sustainment and replenishment; kitting and assembly/disassembly;

equipment readiness and reporting; recall of equipment; and enhanced small arms protective inserts), serviceability and quality of equipment (including serviceability; warranty management;

accurate and real-time data; accurate accountability of CSP assets; shelf life management;

timeframe for training and education command equipment; timeframe for MARFORSOC equipment; repair of returned equipment; preventive and corrective maintenance; field protective mask requirements; unserviceable, obsolete and excess equipment; financial liability investigation of property loss documentation; serialized equipment management; environmental requirements hazardous materials; Marine Forces Special Operations Command; and skis and supporting equipment); and special requirements (including security and safety; additional safety requirements; transition plan; and quality).

The main revision to the PWS was changes made to Section 3.3.5, which addresses physical inventory (retitled "physical inventory control program" in the Revised Solicitation).

Upon close examination of the revised section, while the Marine Corps has made superficial changes related to schedule, reporting and applicable performance standards, the Marine Corps has not substantively changed requirements in a manner that would impact how a contractor would perform the inventory control requirements. For example, the revised inventory control section in the Revised Solicitation adds several new orders and directives applicable to performance; however, the main directive from the Original Solicitation (MCO 4400.201) remains the primary guide for performance, and the other directives added by the Revised Solicitation merely reflect requirements that were present in the Original Solicitation. In addition, the Revised Solicitation adds a requirement in the inventory control section to provide a physical inventory plan for the upcoming fiscal year. However, the Original Solicitation included a contract data requirements list ("CDRL") requirement (at CDRL A009) that the contractor provide an inventory plan at the post-award conference. Further, while the Revised Solicitation calls for the contractor to be at least 98% on schedule over the period of performance of the inventory by facilities, the Original Solicitation required that "Mlle Contractor shall be at least 98% on schedule over the period of performance of the inventory method." Original Solicitation § 3.3.5.1. While the Revised Solicitation's application of the 98% schedule standard

U.S Government Accountability Office February 21, 2020 to each inventory location represents a change to the solicitation, it does not alter the manner or method of the contractor's performance. Other changes made to the inventory control section of the Revised Solicitation similarly are not substantive and do not change the main CSP requirements or the staffing and associated pricing to be provided by an offeror.

As part of the Revised Solicitation, the Marine Corps issued a revised pricing workbook as Attachment 22 to the solicitation. Attachment 22, which is comprised of Excel spreadsheets used by offerors to submit pricing for the solicitation requirements, contains two spreadsheets — one on which offerors enter their pricing for each of the contract line item numbers ("CLINs") included in the solicitation, and one for the development of pricing for the T&M CLIN, CLIN 0004, CSP Mission Support. The T&M spreadsheet has separate columns listing labor categories, definition of the labor category and base and overtime hours for each of the labor categories. Offerors are instructed to provide their normal and overtime rates for each labor category, which yields a total proposed not-to-exceed price for the base and option years pertaining to the T&M CLINs. When issued as part of the Original Solicitation, the T&M spreadsheet listed two generic labor categories — logistics specialist and site manager — and one Service Contract Act ("SCA") labor category (warehouse specialist). In response to the Original Solicitation, LVI submitted a proposal

Attachment 22 issued by the Marine Corps as part of the Revised Solicitation reflects revisions to the T&M spreadsheet that incorporate LVI proprietary information taken from its

. Specifically, the Marine Corps has modified the T&M spreadsheet to include .

The Marine Corps provided no explanation for these revisions; however, it is clear that the Agency has taken information included in LVI's proposal and incorporated it into the revised attachment. The fact that demonstrates the Agency's reliance upon LVI's in amending the T&M spreadsheet.

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February 21, 2020

LVI wrote to the Marine Corps on February 7, 2020, to supplement its initial letter regarding the Marine Corps' release of LVI proprietary information to include the additional information release through Attachment 22 to the Revised Solicitation. Att. 7. LVI noted that the Agency's release of LVI proprietary information through Attachment 22 aided competitors in several ways, including instructing offerors on and . LVI repeated its request that the Marine Corps investigate the potential PIA violation arising from the release of LVI proprietary information and to cancel the Revised Solicitation.

D. Prior Marine Corps Release of LVI Proprietary Information

Both LVI's January 31' and February 71h letters noted that the Marine Corps' release of LVI proprietary information as part of discussions in November 2019 and Attachment 22 in February 2020 reflect a pattern of mistreatment of LVI's proprietary information by the Marine Corps. In June 2018, the Marine Corps issued a request for information ("RFI") for the exact same requirement regarding its CSP needs that included LVI proprietary information regarding

LVI immediately provided notice to the Agency of its release of the company's proprietary information. See Att. 8. Although the Marine Corps took steps to reissue the RFI without LVI proprietary information, the release of its information put LVI at a disadvantage in competing for the CSP procurement, as the proprietary information released by the Marine Corps provided competitors with direct insight into LVI's approach to performing the CSP requirements.

Specifically, . The two instances of the Marine Corps' release of LVI proprietary information in 2019 and 2020, relating to the same CSP procurement requirements, and the 2018 release of proprietary information demonstrate gross mismanagement by the Marine Corps of contractor proprietary information and raise serious questions regarding the Agency's ability to safeguard contractor proprietary information and to conduct a fair and equal procurement for the CSP requirements.

E. Marine Corps Response to LVI Request for Procurement Integrity Act Investigation and Cancellation of CSP Solicitation

On February 12, 2020, Christopher Carlson, Director of the MCLC Contracts Department, e-mailed counsel for LVI, attaching the Marine Corps' response to LVI's January

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U.S Government Accountability Office February 21, 2020

3151 and February 7'h letters. Att. 3. In the response, Mr. Beaulieu, the Marine Corps PCO, noted that "I regret that an inadvertent release of Procurement Integrity Act (PIA) information occurred in solicitation M6700419R0004, where upon discovery of this release, the Agency investigated and took appropriate remedial action to alleviate any unfair competitive advantage with the Consolidated Storage Program (CSP) requirement." Mr. Beaulieu outlined the Marine Corps' investigation of the release of PIA information, stating:

On 15 November 2019, while the Agency emailed discussion letters to offerors in the competitive range identifying weaknesses and deficiencies, an inadvertent release of the Agency's evaluation of LVI's proposal deficiencies went to another offeror which also included , but no other proposal information was released. Upon discovery the following business day, the Agency communicated with the offeror who received the wrong Agency's discussion letter. The Agency instructed the offeror to destroy the information and to confirm its destruction, which the Agency received destruction confirmation from that offeror.

Although the Marine Corps letter stated that "[t]he Agency concluded no PIA violation occurred since no evidence of a knowing discussion occurred on the release," the Marine Corps offered no details to support its conclusion. The Marine Corps' letter also did not address the reason for the delay in alerting LVI regarding the release of its proprietary information or the impact of the release of PIA information on the CSP procurement.

The Marine Corps' letter also addressed revisions reflected in the Revised Solicitation that the Agency asserted would mitigate any risks of an unfair competitive advantage created by the release of LVI proprietary information. The Agency noted that the Revised Solicitation reflected a change from "simply issue and receive equipment to issue and receive equipment, along with conducting inventory in accordance with the Commandant of the Marine Corps direction." The letter cited changed to Section 3.3.5 of the Revised Solicitation's PWS, to include "overall changes in inventory accountability and frequency within a constrained time period" and a requirement to submit a "physical inventory control plan (not a 2019 requirement) in their proposal, which the Agency will evaluate before award to assess which submitted proposal provides the best value to the Agency." The Marine Corps also cited its use of a best value tradeoff as part of the Revised Solicitation, which "mitigates to the greatest extent possible the concern posed by the inadvertent release as all previous proposal submissions to M6700419R0004 are obsolete as any released information on the 2019 solicitation is no longer pertinent to the new 2020 requirement." The Marine Corps' letter did not describe how these

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U.S Government Accountability Office February 21, 2020 proposed changes would alter an offeror's proposal, whether in terms of staffing or proposed price.

In addition, the Marine Corps' letter disputed the impact of the release of Attachment 22 to the Revised Solicitation. The Marine Corps asserted that it had not reviewed or utilize LVI proprietary information in preparing the attachment, and that "Nile data used to prepare Attachment 22 came from the contracting officer's record of approval for T&M Request for Goods and Services (RGS) the Agency initially submitted to the current incumbent. The data came from the Agency's records not from LVI's proposal submitted in 2019."

V. ARGUMENT

A. The Marine Corps' Release of LVI Proprietary Information Provides Other Offerors with an Unfair Competitive Advantage

The Marine Corps' release of LVI's proprietary information has provided other offerors for the CSP procurement with an unfair competitive advantage. LVI's information released in November 2019 as part of discussions and in February 2020 as part of Attachment 22 to the Revised Solicitation provide LVI's competitors with direct insight into LVI's to the CSP requirements. This information release in 2019 and 2020 compounds the harm suffered by LVI from the Marine Corps' prior release of LVI proprietary information in 2018, which provided detailed information on LVI's to the CSP requirements. Although the Marine Corps cancelled the Original Solicitation following its release of LVI proprietary information in November 2019, its decision not to make any substantive revisions to the solicitation that would address the unfair competitive advantage and to effectively reissue the same solicitation in the form of the Revised Solicitation demonstrates that the Marine Corps has failed to address the competitive advantage created by the information release. The GAO therefore should direct the Marine Corps to cancel the Revised Solicitation and take appropriate steps to mitigate the impact of its release of LVI's proprietary information.

The GAO has held that the disclosure of proprietary or source selection information (including an offeror's price) to an unauthorized person during the course of a procurement is improper. S&K Aerospace, LLC, B-411648, Sept. 18, 2015, 2015 CPD ¶ 336; Kemron Environmental Servs., Inc., B-299880, Sept. 7, 2007, 2007 CPD ¶ 176. Where an agency inadvertently discloses an offeror's proprietary information, the agency may choose to cancel the procurement if it reasonably determines that the disclosure harmed the integrity of the procurement process. Information Ventures, Inc., B-241441.4, Dec. 27, 1991, 91-2 CPD ¶ 583.

"Where an agency chooses not to cancel the procurement after such a disclosure, we will sustain

February 21, 2020 a protest based on the improper disclosure only where the protester demonstrates that the recipient of the information received an unfair competitive advantage, or that it was otherwise competitively prejudiced by the disclosure." S&K Aerospace, 2015 CPD ¶ 336.

The Marine Corps has released LVI proprietary information on three separate occasions that clearly falls within the scope of "proprietary or source selection information" subject to protection under GAO caselaw. In November 2019, the Marine Corps sent a letter intended for LVI to a competitor that detailed LVI's

Such information, specifically LVI's

, constitutes proprietary information that would aid another offeror competing for the CSP requirements. See Kemron Envt '1 Servs., 2007 CPD ¶ 176. In February 2020, the Marine Corps released Attachment 22 as part of the Revised Solicitation, which included a spreadsheet that incorporated

. This information, proprietary to LVI, would allow another offeror competing for the CSP requirements to understand for the procurement (as reflected in both the Original and Revised Solicitations). In addition to these two releases of LVI proprietary information, in 2018 the Marine Corps issued an RFI for the CSP requirements that incorporated a substantial amount of information reflecting

. The LVI proprietary information released in 2018 relates to the same CSP requirements reflected in the Original and Revised Solicitations under which the Agency released LVI proprietary information in 2019 and 2020.

Cumulatively, the LVI proprietary information released by the Marine Corps on three separate occasions provides direct insight to a competitor for the CSP requirements into the core elements of LVI's approach to those requirements —

. As discussed below, the combination of the breadth of the LVI proprietary information released by the Marine Corps and the Agency's failure to incorporate significant, substantive revisions to the CSP solicitation gives other offerors an unfair competitive advantage for the Revised Solicitation.

At the outset, it is important to recognize that although the Marine Corps initially cancelled the Original Solicitation, it ultimately chose not to cancel the CSP procurement and effectively issued a new solicitation — the Revised Solicitation — that incorporates no substantive

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February 21, 2020 changes to the Original Solicitation. Following its discovery that it had released LVI proprietary information to a competitor in November 2019, the Agency issued notice to all offerors cancelling the Original Solicitation. The Marine Corps provided no reason for its cancellation decision, and did not inform LVI at that time that it was cancelling the solicitation due to the release of LVI proprietary information. Had the Agency stopped at that point, it arguably would have provided an effective response to its disclosure of LVI's proprietary information. Instead, the Agency decided to press ahead with the CSP procurement and to issue a new solicitation for the same requirements. Given that decision, the Agency may not now claim the protection of a prior decision to cancel the Original Solicitation in response to LVI's assertions of harm caused by the Marine Corps' release of its proprietary information.

The Marine Corps' decision to continue with the CSP procurement and to issue the Revised Solicitation means that the Agency has the burden to demonstrate that, given its release of LVI's proprietary information, its revisions to the solicitation make the Revised Solicitation substantially different from the Original Solicitation. See S&K Aerospace, 2015 CPD ¶ 336 (analyzing changes in the procurement following release of protester's proprietary information).

A comparison of both solicitation shows that the Agency cannot satisfy this burden. The vast majority of the requirements in Sections 3 (Performance Operations Requirements) and 4 (Special Requirements) of the PWS are unchanged from the Original Solicitation to the Revised Solicitation. In its February 12, 2020 letter to LVI, the Marine Corps points primarily to revisions to the solicitation's physical inventory requirements in Section 3.3.5 of the PWS, citing "overall changes in inventory accountability and frequency within a constrained time period" and the requirement to "submit [a] physical inventory control plan." However, the revisions to Section 3.3.5 of the PWS fail to alter the overall requirements to be performed by a contractor, and would not require an offeror to revise the staffing or pricing proposed in response to the Original Solicitation. The Revised Solicitation retains the same applicable inventory standards (MCO 4400.201) as are included in the Original Solicitation. The new provisions added to the Revised Solicitation address aspects of inventory control that have no impact on the manner in which the contractor would manage inventory — inventory accuracy, controlled items definition, serially managed items definition, standards for property record adjustments and materiel receipt.

Instead, these new provisions provide more granular details to the manner in which the Marine Corps evaluates the contractor's performance of the inventory control requirements (for example, application of the 98% on schedule requirement to individual locations (as required by the Revised Solicitation) versus on an overall basis (as required by the Original Solicitation). Such revisions therefore are insufficient to mitigate the impact of the Marine Corps' release of LVI's proprietary information. With respect to the inventory control plan requirement cited by the Marine Corps, the Original Solicitation required that the contractor provide an inventory plan at the post-award conference. The Agency therefore cannot claim that the inventory control plan is a new requirement. The result is that the changes reflected in the Revised Solicitation do not

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U.S Government Accountability Office February 21, 2020 alter the manner or method of performance or associated pricing from that required under the Original Solicitation.

Although not cited in the Marine Corps' February 12th letter, the Revised Solicitation adds a minimum workforce requirement of 360 personnel. Revised Solicitation PWS § 2.5. The addition of a minimum workforce requirement by itself, however, is insufficient to mitigate the competitive advantage to offerors caused by the LVI proprietary information release. While the Revised Solicitation's PWS states that "Nile minimum workforce required is 360,' id., the Revised Solicitation does not address how the Agency intends to evaluate an offeror's proposed staffing against this stated minimum. The solicitation also lacks any clause creating an enforcement mechanism for the Marine Corps for a contractor's failure to meet the minimum staffing requirement during performance. Further, the main CLINs for the provision of CSP operations support are fixed price, meaning that an offeror can provide the level of staffing that it determines to be most efficient in meeting the CSP requirements. Absent any enforcement mechanism in the contract for failure to provide a minimum level of staffing, the contractor would be free to provide staffing below the stated minimum

The Agency's efforts to revise the solicitation sufficiently to negate the impact of its release of LVI's proprietary information stands in stark contrast to the standards articulated by the GAO in similar cases. For instance, in S&K Aerospace, 2015 CPD ¶ 336, the agency amended a solicitation following its discovery that it had inadvertently released proprietary information belonging to one of the competitors. The competitor whose information was released filed a protest, arguing in part that the agency's release of information gave other competitors an unfair advantage for the revised procurement. The agency asserted that several factors, including revisions to the solicitation, mitigated the risk of competitive prejudice. The GAO reviewed the agency's revisions to the solicitation, finding that differences in the two versions of the solicitation supported the agency's conclusion. The GAO pointed to several material differences in the revised solicitation, including (i) inclusion of a service fee not included in the original solicitation that represented a 50% increase in the number of requisition categories; (ii) the requirement to include more overhead costs in fill fees; (iii) an increase in the objective performance incentive available to the contractor, from $1 million to $10 million; and

(iv) a requirement to refund to the government both the vendor refund and the contractor's fill fee if the contractor is at fault for a supply discrepancy. The GAO concluded that "given the differences between the PROS IV and PROS V procurements . . . there is no basis to question the reasonableness of the agency's conclusion that knowledge of the PROS IV pricing would be of only limited utility for the PROS V procurement." S&K Aerospace, 2015 CPD 11336.

In contrast, in the present procurement, the Marine Corps relies solely on revisions made to the inventory control requirements of the Revised Solicitation. While those additional

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U.S Government Accountability Office February 21, 2020 provisions in the inventory control section introduce inventory control standards not included in the Original Solicitation, the Marine Corps has failed to articulate how these revisions have changed the solicitation sufficiently to mitigate the impact of the release of LVI proprietary information. The Agency also fails to offer any analysis on how such revisions would require an offeror to alter its staffing or pricing approach for the Revised Solicitation compared to the Original Solicitation. Given these failures by the Marine Corps to undertake sufficient revisions to the CSP solicitation to address the competitive advantage created by its release of LVI proprietary information, the GAO should sustain LVI's protest.

An additional factor relevant to consideration of the impact of the information release upon the CSP procurement is the length of time between the date of the information release and the current procurement. In S&K Aerospace, the GAO noted that the agency had disclosed the protester's pricing information four years prior to the issuance of the revised solicitation, which meant that the pricing information would have limited utility for the revised solicitation S&K Aerospace, 2015 CPD ¶ 336. Here, less than three months have passed since the Marine Corps released LVI's proprietary information, , in November 2019 to a competitor. The Agency issued additional information regarding in Attachment 22 as part of the Revised Solicitation. The LVI proprietary information released by the Agency therefore retains its relevance and currency for the CSP procurement. Added to this is the released by the Marine Corps in 2018, less than two years before the issuance of the Revised Solicitation. This information too has direct relevance to the current CSP requirements and could be used in concert with LVI proprietary information released by the Agency in November 2019 and February 2020 to gain a competitive advantage against LVI.

The record shows that the Marine Corps failed to make sufficient revisions to the Revised Solicitation that would mitigate the unfair competitive advantage created by the Marine Corps' serial release of LVI proprietary information. Those revisions cited by the Marine Corps in its February 12th letter address the metrics and standards used by the Agency to monitor contractor performance, and do not alter the core requirements or scope of work related to CSP operations.

The Agency's failure to make sufficient revisions to and decision to proceed with the Revised Solicitation prejudices LVI, as competitors for the CSP requirements have received direct insight into LVI's through the Marine Corps' release of LVI's proprietary information. The GAO therefore should sustain this protest and direct the Agency to cancel the Revised Solicitation and undertake sufficient revisions to the CSP requirements to mitigate the current unfair competitive advantage.

THOMPSON - HINE

February 21, 2020

B. The Marine Corps Failed to Conduct a Proper Procurement Integrity Act Investigation in Response to the Release of LVI Proprietary Information

The record demonstrates that the Marine Corps failed to conduct a sufficient investigation regarding a potential violation of the PIA caused by its release of LVI proprietary information.

Information provided by the Agency in response to LVI's notice of a potential PIA violation shows that the Marine Corps engaged in a cursory review of the facts surrounding its release of LVI proprietary information and failed to follow the investigative requirements of the PIA statute and regulations. Significantly, the Agency erred in its conclusion that steps taken by the Agency, including revisions to the CSP solicitation, were sufficient to address the impact of its release of PIA information belonging to LVI. These failures by the Marine Corps underscore the unreasonable and incomplete nature of its PIA investigation, and the GAO should sustain LVI's protest on this ground.

LVI set forth allegations of potential PIA violations relating to the Original and Revised Solicitations in a letter dated January 31, 2020. See Att. 2. As addressed in LVI's January 3151 letter, both the Original and Revised Solicitations failed to address the Agency's release of LVI proprietary information, including information regarding

Without further revisions to the Revised Solicitation by the Marine Corps to address the impacts of the release of this proprietary and source selection information, LVI is unable to compete fairly for the CSP procurement and will suffer competitive harm. While the Agency has provided a response to the allegations of PIA violations, it appears that the Agency did not conduct a full investigation and did not follow the procedures of the FAR, and its conclusion is incorrect.

In addition, LVI identified additional potential PIA violations in its February 7, 2020 letter. See Att. 7. As detailed in the February 7th letter, Attachment 22 issued by the Marine Corps as part of the Revised Solicitation reflects revisions to the T&M spreadsheet that incorporate LVI proprietary information taken from . The Marine Corps has modified the T&M spreadsheet to include in response to the Original Solicitation. While the Agency has provided a response to these allegations of PIA violations, the Agency did not conduct an investigation or follow the procedures of the FAR, and its conclusion is incorrect.

In response to these allegations of potential PIA violations, the Agency has failed to conduct investigations consistent with the requirements of the FAR, and its conclusions are incorrect and unreasonable, because they do not remediate the competitive harm to LVI and the unfair competitive advantage provided to LVI's competitors.

February 21, 2020

1. The USMC's February 12, 2020 Letter

On February 12, 2020, the Marine Corps responded to LVI's requests for a PIA investigation. See Att. 3. In the letter, PCO D.E. Beaulieu stated that:

On behalf of the Agency, I regret that an inadvertent release of Procurement Integrity Act (PIA) information occurred in solicitation M6700419R0004, where upon discovery of this release, the Agency investigated and took appropriate remedial action to alleviate any unfair competitive advantage with the Consolidated Storage Program (CSP) requirement.

The letter noted that on November 15, 2019, during the process of emailing discussion letters, "an inadvertent release of the Agency's evaluation of LVI's proposal deficiencies went to another offeror which also included LVI's total evaluated price, but no other proposal information was released." According to the letter, the USMC instructed the offeror to destroy the information and confirm its destruction, and the Agency received confirmation of the destruction from that offeror.

According to the February 12th letter, "[w]hile the Agency conducted an investigation gathering the facts on this release," the Marine Corps learned that the CSP requirement had changed. According to the letter, the new CSP requirement is contained in Section 3.3.5 of the PWS, and this change between the Original and Revised Solicitations was sufficient to eliminate any unfair competitive advantage. Further, according to the letter, the Marine Corps concluded that no PIA violation had occurred because the Agency's disclosure was not intentional:

The Agency concluded that no PIA violation occurred since no evidence of a knowing disclosure occurred on the release. The Agency considered whether it could salvage solicitation M6700419R0004 by taking remedial action alone. The Agency reviewed GAO inadvertent disclosure cases where agencies had not canceled solicitations and cases where agencies had canceled solicitations. Another factor the Agency considered was the new inventory requirement that changed the 2019 requirement. Based on these factors, the Agency assessed it could not level the competitive playing field by remedial actions alone to salvage the 2019 solicitation. To ensure its new requirement would be met and to ensure competitive fairness, the Agency concluded appropriate

February 21, 2020 remedial action was to cancel the solicitation. Since the Agency is awarding based off of Best Value Tradeoff rather than based off lowest price, the new requirement mitigates to the greatest extent possible the concern posed by the inadvertent release as all previous proposal submissions to M6700419R0004 are obsolete as any released information on the 2019 solicitation is no longer pertinent to the new 2020 requirement.

Att. 3 at 1-2. As stated in the letter, the Marine Corps concluded that it could not level the playing field by remedial action alone and cancelled the Original Solicitation. According to the letter, all previous proposal submissions are "obsolete" and any released information relating to the Original Solicitation is "no longer pertinent" to the Revised Solicitation and new requirements.

2. The Agency Conclusions Were Unreasonable and Incorrect

However, as explained above, the changes to the Original Solicitation are not significant enough to eliminate the unfair competitive advantage that was created through the release of LVI proprietary information. The Agency conclusion to the contrary was incorrect and was unreasonable.

The potential PIA violations here are a basis to sustain the protest for the same reasons discussed in Dell Services Federal Government, Inc., B-414461,…