There is some element of irony with a FEMA contract turning into a disaster for an incumbent prime contractor recompete. There was an interesting plot twist here with a flip of the incumbent prime to take a subcontract role while putting another business in front. We will explore this recompete and another addition to our Deadly Sins series. This is an ongoing blog series identifying and exploring wins and losses with lessons learned.
As we delve into this topic, we also recognize the gravity of the real-world situations unfolding related to disasters and FEMA driving that response. Our thoughts are with those affected by the aftermath of Hurricane Helene and dealing with Hurricane Milton. Consider what you can do to help your fellow American. Please stay safe and take care of each other.
You can’t guarantee the win with just the incumbent prime contractor
U.S. Department of Homeland Security, Federal Emergency Management Agency (FEMA)
Risk Management Directorate (RMD) Program Management Support contract
Protest Decision Date: August 30, 2024
Incumbent Chevo Consulting was defending their FEMA RMD program management contract against four challengers. Among those challengers was the much smaller J&M Global Solutions.
While we know that FEMA is not an agency that is always hyper price sensitive, the final evaluation made us pause. Let’s take a look at the evaluation on a factor-by-factor basis.
| Offeror | Corporate Exp. | PWS and QASP | Oral Pres. | Staffing Plan / Key Personnel | Past Perf. | Price |
| J&M Global Solutions | High | Some | High | High | Some | $92,396,264 |
| Chevo Consulting | Some | Some | Low | Low | Some | $73,140,083 |
The best value trade-off decision made by FEMA involved a 22% difference in price, even in light of a significant difference in the non-cost evaluation. This is very important to recognize because we have observed that FEMA leans toward being a discount buyer. This is significant because FEMA does NOT tend to allow such pricing premiums. Mind you that this is not absolute with FEMA, as there is some precedence for pricing premiums.
Editor’s note: we have a hell of an analysis on FEMA that goes well beyond this blog. If you reach out to us and ask really nicely, we might have a promo code for you.
Chevo Consulting protested the award decision by challenging how FEMA evaluated its proposal.
Is experience the difference?
Chevo Consulting teamed with Deloitte Consulting, which strikes them a powerhouse team. Chevo submitted two corporate experience citations – one for what it asserted as work for CISA and the incumbent FEMA RMD contract. Note the CISA citation was Chevo’s. Deloitte was the FEMA RMD incumbent so they submitted that as a means to boost credibility for their newfound prime contractor.
What is perplexing here is that Chevo’s CISA corporate experience was not received well by FEMA. Why is this perplexing? One would think that with the incumbent contractor (Deloitte) on their team, that they would know “what sells to FEMA.” In fact, let’s read this excerpt from the protest decision:
“The agency found several areas where Chevo’s response to question 1 decreased its confidence that Chevo could successfully perform. When reviewing the CISA task order, the agency documented a decreased confidence finding because the task order was primarily focused on automation, tools, and evaluation, and Chevo did not demonstrate how its work on the task order of centralizing data and documentation into a SharePoint repository would provide a benefit to FEMA or meet the objectives of the task order. In addition, it was not clear whether Chevo set measures or simply automated measurement when performing the CISA task order. The agency found that the lack of clearly demonstrated relevant experience significantly decreased confidence that Chevo could accomplish the objectives of the task order.”
Chevo retorts:
“Chevo argues that even if the CISA example raised questions about Chevo’s ability to accomplish the task order objectives, the RMD contract should have increased the agency’s confidence in Chevo’s ability to perform. In this regard, Chevo notes that the agency found increased confidence in the RMD contract performed by Deloitte that positively impacted FEMA’s goals and objectives.”
And we continue:
“According to Chevo, since Deloitte’s performance on the RMD contract increased the agency’s confidence that Chevo could meet the task order objectives, the agency was required to rate Chevo high confidence under question 1. Chevo asserts that the RFP allowed the agency only to determine whether Chevo demonstrated that it could meet FEMA’s goals and objectives, and the agency’s evaluation of the experience on the RMD contract confirmed that Chevo could meet the goals and objectives.”
In summary…we’re backed by the incumbent so you should give us a better rating.
This is where we need to understand that the Corporate Experience factor takes into consideration THE ENTIRE OFFER AND YOU CANNOT CHERRY PICK WHAT DOES NOT WORK.
To put this differently, when you are the newly minted prime contractor but supported by the incumbent, you’re the boss and the customer needs to have confidence in you. Accountability for performance cannot be delegated.
A house of cards is easy to knock over
It is not at all uncommon for a prime contractor to flip an incumbent contract to a new business. This tends to happen when the incumbent is large and the competition flips to a set-aside competition. Even when this is the case, the “Chosen One” backed by the incumbent still has to bring the heat.
Let’s explore the evaluation more thoroughly:
| Issue / evaluated item | What happened? | Outcome? |
| Corporate experience | Corporate experience from Chevo with CISA did not convince FEMA that the experience was at all relevant to its work. | Despite having very relevant experience (Deloitte, the SUBCONTRACTOR and incumbent), the PRIME missed the mark. Decreased confidence |
| Experience matching complexities of RMD contract | Chevo could not show experience that had similar types of complexity in terms of program size and across geographies. Deloitte did show that it was very well-equipped for the complexity (had already done it). | Chevo did not give FEMA confidence that it was up to the task. Decreased confidence Deloitte did have experience that was highly relevant. Increased confidence NET = Overall downgraded because Chevo is prime and Deloitte is not. |
| Quality of overall performance in past performance questionnaires | Overall, the questionnaires returned were favorable for both Deloitte and Chevo. | This demonstrated that they were very capable of performing tasks assigned on contracts referenced. Increased confidence |
| Heavy utilization of incumbent personnel | Chevo emphasized transition of incumbent staff as a feature to ease transition and (likely) to shore up its lack of experience. | FEMA saw this as a risk because of the very heavy reliance of Deloitte employees moving to Chevo and no real backup. Decreased confidence |
| Experience of prime was NOT in disaster support | Chevo had no real experience working in FEMA’s disaster response environment which left some doubt in the minds of evaluators that Chevo would operate in that high pressure and time-sensitive environment. | Minimal credibility for the prime in a similar “mission environment.” Decreased confidence |
We circle back again to the prime contractor (Chevo Consulting) leaning very heavily on the former incumbent and dedicated prime contractor.
Remember that if you are the prime contractor, you are the driver. And your newfound subcontractor who is the incumbent is the pit crew. In the end, if you can’t drive, you won’t win.
What can we learn from this?
- It’s great to have an incumbent prime contractor as your dedicated subcontractor, but that won’t cut it if your story leans on them very heavily.
- Incumbent large business prime contractors cannot expect to return to a contract if the prime contractor they choose relies so heavily on the large business to score well.
- Even good scores on past performance does not matter much unless the references are highly relevant.
- High pressure environments such as supporting FEMA do not often command pricing premiums, but in some cases when the alternative is risky, a pricing premium is possible.
Are you interested in finding out more about trends in contract award decisions and even more about what has unraveled award decisions? Learn from our analysis so you spend less on losing efforts and protests and more on WINNING. Check out how we go deeper into these topics via FedAgency Insight!
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