Late in the afternoon on Friday February 7th, OPM gave notice of the cancellation of the Customized Human Resources Solutions Services (CHRS) contract by posting a vague one-sentence statement to FBO. The notice that “THIS SOLICITATION IS HEREBY CANCELLED” undoubtedly ruined the weekend of many bidders, and provided no explanation to why the contract was cancelled. CHRS, a five-year human resources IDIQ  contract estimated at a total value between $3B and $5B, was the follow-on to OPM’s Training and Management Assistance contract, the largest training contract in the federal government.

Letter to OPM

Stan Soloway, President and CEO of the Professional Services Council (PSC), wrote a letter to OPM Director Katherine Archuleta on February 18th on behalf of the over 370 member companies of the PSC, many of which had submitted proposals for CHRS. In his letter, Soloway stated that offerors “expended substantial and precious resources in order to propose the best possible solutions” and were “stunned by the February 7th one sentence announcement that the procurement had been cancelled”.

In a statement provided to Washington Technology published on February 19th, OPM broke their silence on CHRS. The agency stated that awarding CHRS “would not satisfy the current and potential future requirements of the government” and that “the magnitude and scope of these changes are such that they could not be met through a modification of the solicitation.”

Unsatisfactory Answer from OPM

However, this explanation does not appear to be sufficient for PSC and the CHRS bidders that it represents. On the PSC website Soloway states, “The fact that the government’s needs may have changed as the federal procurement plodded along does not mean bidders and potential contract users do not have a reasonable expectation for more transparency and insight into what needs changed, why modification of the solicitation wasn’t an option, and how OPM is planning to fill the needs once TMA’s extension expires.”

If there are any winners in the aftermath of the CHRS cancellation, it is the current contract holders of TMA. OCI has heard rumors that the existing TMA contracts will be extended 2-3 years while OPM develops a new acquisition strategy for the recompete. Soloway echoes this concern in his February 18th letter to Director Archuleta.

Huge Losses for Bidders

The numerous CHRS bidders who are not on the TMA contact are facing the realization that their investment in CHRS proposal development is a sunk cost. Soloway estimates that, cumulatively, CHRS bidders have invested tens of millions of dollars in pursuit of CHRS. Alan Chvotkin, EVP of the Professional Services Council (PSC), said, “They had any number of options open to them, and they picked what seems to me the worst option and cancelled the program after proposals were already received.”  OCI president Russell Smith added, “They may have realized there were such strong effects from the budget problems that they need to fundamentally rethink the program.” 

Any reader with insight is invited to comment below.

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