ED Files Status Report on RFP Litigation; Planned Notice of Awards Date Seems in Doubt

Last Friday afternoon the Department of Education (ED) filed a “Status Report” in the United States Court of Federal Claims. The report was required per the August 2, 2017 Sua Sponte Order issued by Judge Susan G. Braden. insideARM wrote about that order on August 3, 2017. 

Editor’s Note: “Sua Sponte” is a Latin term used to indicate that a court has taken action without prompting or motion from either party.

In our August 3^rd article insideARM commented that portions of Judge Braden’s order were puzzling.  We noted that the order contained the following: 

“On August 1, 2017, however, the Department of Education announced that it was no longer seeking to select a single student loan servicer and would be pursuing a new proposal that would award separate contracts to one or more companies. Once again, the Department of Justice has failed to inform the court of these developments. 

Since the date of the Government’s proposed action is only twenty-three days away, the court orders the Government to provide the court and the parties a status report in the above captioned case no later than the close of business on August 4, 2017.”

We then commented: 

“What is puzzling about this Order is the fact that the cancelled servicing solicitation is separate and distinct from the ED RFP for PCA services. It would seem to this writer that one has nothing to do with the other.” 

A significant portion of the status report filed on August 4^th politely informs and educates the court on the difference between the ED solicitation for loan serving and the ED solicitation for private collection agencies: 

“We also address in this report the attachments to the Court’s Orders dated May 31, 2017 and August 2, 2017, to clarify how the solicitation for Federal student loan management services described in those attachments is unrelated to the single procurement for private collection agency services for student loans that are in default that is pending before the Court. To assist the Court, we file with this status report the accompanying Declarations of William Leith, Chief Business Operations Officer, Federal Student Aid, and Dr. Patrick Bradfield, Head of the Contracting Activity, Federal Student Aid.” 

What is more interesting, however, is the fact the status report also provides a look at the current state of events in the ED RFP “Do Over” originally proposed by ED on May 19, 2017 and subsequently revised by ED on May 25, 2017. See insideARM article dated May 30, 2017.  While the status report is only 6 pages, it provides information about the “Do Over” that was not public knowledge prior to the filing. 

The most interesting items were: 

• “As of the date of this status report, Education has completed a review of more than half of the 37 proposals it has received under the corrective action.” 

Prior to the filing of this document, insideARM was unaware of the total number of responses to the “Do Over.” June 15, 2017 was the deadline for filing a response. Thus, we can infer that it took ED approximately seven weeks to review the “more than half” of the 37 proposals. 

• “The agency is striving to complete the reevaluation by August 25, 2017, but there are various contingencies that may cause Education to require more time to complete its corrective action.” 

The report then describes the “various contingencies.” 

“First, there remains an active protest of the corrective action that is pending before the Court in Automated Collection Services, Inc. v. United States, Ct. No. 17-765C.  Mindful of the August 25, 2017 projected completion date for the corrective action, the parties agreed to an expedited briefing schedule. The protest is now fully briefed and awaiting the Court’s decision, which could affect Education’s ability to meet the projected completion date. 

In addition, Education is entering into a critical phase of the reevaluation that potentially could cause it to require additional time. In addition to preparing an administrative record and conducting various internal reviews, Education may decide to establish a competitive range and conduct discussions, which could consume an additional few weeks. Id. After Education identifies prospective awardees, the contracting officer will need to determine their responsibility, which may require communications with some offerors and the negotiation of subcontractor agreements. 

This corrective action is a top priority of Federal Student Aid, and it is working diligently to complete the corrective action by the August 25 target date. If Education concludes that it will not meet this target date, it will promptly advise the Department of Justice, and we will immediately so advise the Court.” 

insideARM was aware of, but has not previously written about, the above referenced ACSI litigation. The reason was because the complaint was not available to the general public. However, based upon items recently filed we now have some insight into that litigation.  

On July 19, 2017 ACSI filed: Plaintiff's Memorandum in Support of its Motion for Judgment on the Administrative Record. 

On August 3, 2017 ACSI filed: Plaintiff’s Response and Reply to Defendant’s and Intervenor-Defendants’ Cross-Motions for Judgment on the Administrative Record. 

A review of those documents indicates that the ACSI litigation centers around the validity of ED’s May 25, 2017 revisions to the May 19, 2017 “notice of corrective action” (aka the “Do Over”). Specifically, ACSI argues that the May 25 revisions should not be allowed. 

In our May 30, 2017 article on the revisions, we wrote: “Though ED notes it is a “minor change to the prior plan,” this document outlines a significant change to their initial corrective action plan.”  

The revision was described:

“The corrective action set forth in the (original) notice did not permit offerors to revise small business participation plans. After further review, and considering the time that has passed since the original solicitation and the desire to receive up-to-date small business participation plans that are consistent with the other elements of the revised proposals, ED has decided to amend the notice and to allow offerors to submit revised small business participation plans, if they so choose.” 

As noted above, ACSI objects to the revisions. Per the ACSI pleadings:

“Less than a week after announcing its initial planned corrective action, however, the Agency abruptly reversed course and announced an amendment to the corrective action to allow offerors to submit revised small business participation plans. ACSI’s protest challenges that expansion as overly broad.” 

insideARM Perspective

The twists and turns continue for this RFP. The ACSI litigation adds a new element to the complexity of the case. 

Unless Judge Braden issues several orders in the related cases, that August 25, 2017 date for Notice of Awards is looking more and more doubtful.