Chapter 10
Protests
Was the Award Decision Reasonable?
Did the Contracting Officer Use the Stated Evaluation Factors?
Did the Contracting Officer Follow All the Laws and Regulations?
Did the Contracting Officer Adequately Document the Decision?
People tend to mix up protests and claims in everyday language. But in procurement, they are two distinctly different things. A protest is made by a loser (an unsuccessful offeror) trying to get the contract. A claim, on the other hand, is made by someone who already has a contract and who is trying to get something under the contract from the contracting officer. (The government can file claims against the contractor, of course, but that is rare.)
This chapter will deal solely with protests. Claims are addressed in the next chapter. Of the three forums for protest, this chapter will deal with only two of them—the Government Accountability Office (GAO) and the Court of Federal Claims (COFC).
What are the chances of winning a protest and getting the contract?
The chances of winning a protest are surprisingly good but the chances of a protester ending up with the work as a result of protesting are much lower, according to government protest data.
The Government Accountability Office (GAO) Fiscal Year (FY) 2015 statistics show that, in 42 percent of GAO protests, agencies decided early in the protest process to voluntarily take a second look at how it carried out the solicitation. These voluntary protester “victories” that closed the protests far outnumbered the protests that continued to the end of the GAO protest process, where GAO sustaining the protest—in FY15, the number was sixty-eight. In all, 45 percent of GAO protests ended up with a protester winning the protest. The chances of winning a protest seem surprisingly high, according to the GAO data.
However, the chances of the winning protester then winning the contract are nowhere near as great, according to the limited data available. Several studies by procurement experts put that number in the range of 22 percent to 29 percent.
We will not discuss the third protest alternative: a protest to the agency. This alternative is usually used by disappointed vendors who have an ax to grind. An agency-level protest has a number of disadvantages: there is no discovery available, costs like attorneys’ fees are not available, and the protester could jeopardize remedies available before GAO and the COFC if an agency-level protest is filed.
The biggest drawback of an agency-level protest is a structural/institutional one. Because an agency- tevel protest may involve the same agency staff member who just recently awarded a contract to someone else, the chances are slim that this same decision maker will suddenly reverse course, change their mind, and sustain the protest.
In many ways, therefore, an agency-level protest is a waste of time. And because there are no reported decisions on agency-level protests, this chapter will not discuss them. Instead, we will focus on protests before GAO and the COFC.
This chapter deals with the what, when, and how of the protests before GAO and the COFC. The who, where, and why (relief) of protests have been discussed in chapter 9. This chapter also covers a related protest issue: whether the protested contract can be started or whether its start must await resolution of the protest.
The protest process has two distinct battles: the fight over the protest itself and the fight over the “automatic stay.” This automatic stay immediately prevents the government and the winning contractor from working on the protested-and-stayed contract until the losing vendor’s protest has been resolved. The chapter ends with a discussion of the automatic stay available to a protester and how the government can override it.
WHAT CAN BE PROTESTED?
Any part of the solicitation process can be protested, including
1. The solicitation package itself (request for quotations, request for proposals, invitation for bids) and anything included in the solicitation package (for example, basic questions such as whether the government should use an IFB or an RFP or the evaluation factors to be used in the best value procurement)
2. The way the government evaluated offers or bids
3. The way the government carried out discussions in a negotiated procurement
4. The government’s determination of responsibility of the winner
5. The selection of the winner
When you look at the authority of GAO and the COFC to deal with protests, their authority is essentially the same.
The COFC looks at
whether the decision was based on a consideration of the relevant factors, whether the agency articulated a satisfactory explanation for its actions, and whether there has been a clear error of judgment. This includes seeing whether the government “articulated a rational connection between the facts found and the choice made.” In other words, the reviewing court must determine whether “the procurement official’s decision lacked a rational basis.”1
whether the decision was reasonable, consistent with the stated evaluation criteria, complied with applicable laws and regulations and was adequately documented.2
Based on what Congress has told GAO and the COFC to look for, four issues generally get protested. The four reasons are covered below.
Was the Award Decision Reasonable?
A contract award must be reasonable. But the trouble with a vague test such as “reasonableness” is that what’s reasonable to you might not be reasonable to me—reasonably.
Some things are clearly unreasonable to all of us. Mechanical decision making is one.
Opti-Lite submitted a bid that was scored third in technical and first in price because it had the lowest price. Classic Optical Laboratories Inc. submitted the top-rated technical proposal and the second lowest price. When the scores were added, Classic scored 180 and Opti-Lite scored 170. The award memorandum that the contracting officer prepared concluded that Classic should get the contract because it had the highest combined total score. GAO sustained the protest because the VA awarded the contract solely on the basis of a mechanical comparison of the offers. The contracting officer found the higher-rated but more expensive proposal by Classic to be more advantageous based solely on the total point score.3
Did the Contracting Officer Use the Stated Evaluation Factors?
A contract award must follow the stated evaluation factors.
A Corps of Engineers solicitation promised to use four technical evaluation factors (project management plan, experience, past performance, and betterments, i.e., amenities). The project management plan factor, the most important factor, was twice as important as any of the other technical evaluation factors. The remaining three factors were equal to each other in importance. In the narrative describing why the winner won, the source selection authority (SSA) described the evaluation factors as being equal to each other in importance in one part of the narrative but later described one factor as the “second most important tactor” and another tactor as “the fourth, and least most important factor. . . .” GAO found the award to be unreasonable “because the SSA in making his cost/technical tradeoff determination accorded the betterments factor less weight than identified by the RFP.”4
Did the Contracting Officer Follow All the Laws and Regulations?
This seems too obvious to state. The government has to follow procurement laws.
Under the Competition in Contracting Act (CICA), cost or price must always be an award tactor. And it must be more than just a nominal award factor. A Commerce Department awarded IDIQ contracts focusing almost primarily on technical award factors and not price. GAO sustained a protest. “In our view, the record in this case, particularly the source sel ection statement, demonstrates that the agency has failed to comply with the regulatory and statutory requirement that contracting agencies give cost or price meaningful consideration in source selections. Contrary to Commerce’s apparent belief, t here is no exception to the requirement set forth in CICA that cost or price to the government be considered in selecting proposals for award because the selected awardees will be provided the opportunity to compete for task orders under the awarded contract.”5
Did the Contracting Officer Adequately Document the Decision?
FAR 15.308 gives good guidance on how a contracting officer should document the award decision:
The source selection decision shall be documented, and the documentation shall include the rationale for any business judgments and tradeoffs made or relied on by the SSA, including benefits associated with additional costs.
This paperwork is needed so GAO can evaluate the quality of a contract award decision:
In order for us to review an agency’s evaluation judgment, the agency must have adequate documentation to support its judgment. Where an agency fails to document or retain evaluation materials, it bears the risk that there may not be adequate supporting rationale in the record for us to conclude that the agency had a reasonable basis for the source selection decision.6
Adequate Documentation of Trade-offs
The paperwork has to show that the contracting officer thought the decision through and used good judgment because
[T]he propriety of a cost/technical tradeoff turns not on the difference in technical score, per se, but on whether the contracting agency’s judgment concerning the significance of that difference was reasonable in light of the solicitation’s evaluation scheme.7
One of the recurring problems with a contracting officer’s paperwork is the documentation of a best value award. Particularly troublesome is when the government is paying more for a better product or is paying less for a not-as-good product.
Whether or not the contracting officer is trying to justify why a higher-rated, higher-priced offer or a lower-rated, lower-priced offer won, the contracting officer has to discuss the pros and cons of all proposals.
“Cheaper” can still be chosen even if the contracting officer made technical factors significantly more important than price. But cheaper has to be justified.
Where cost is secondary to technical considerations under a solicitation’s evaluation scheme, as here, the selection of a lower-priced proposal over a proposal with a higher technical rating requires an adequate justification, i.e., one showing the agency reasonably concluded that notwithstanding the point or adjectival differential between the two proposals, they were essentially equal in technical merit, or that the differential in the evaluation ratings between the proposals was not worth the cost premium associated with selection of the higher technically rated proposal.8
The U.S. Army Corps of Engineers solicitation made “technical evaluation factors, when combined, significantly more important than cost or price.” Beneco had the highest-rated proposal but was the ninth lowest in price. Its technical score was 36 percent higher and its price 27 percent higher that the lowest-priced proposal. But all the government documentation said was, “While Beneco is likely to be able to perform the tasks described in the contract in a manner more technically advantageous to the Government; it is noted that, based upon the benefits and advantages of the higher-rated technical proposal . . . payment of the significant additional price for Beneco . . . is neither justified, nor in the best interest of the Government.” But the government gave no other reasons for its conclusions. It did no comparative analysis of the strengths and weaknesses of the proposals. GAO said the paperwork was inadequate. “All the paperwork showed was simply that the agency was unwilling to pay a 27 percent price premium to obtain a proposal with a 36 percent higher technical score, without any discussion of the proposals’ relative strengths and weaknesses.”9
Inadequate Documentation but Other Proof
Although FAR 15.308 demands documentation, FAR does not say when that documentation has to be prepared—at the time of award or in the middle of a protest. Because a lawsuit, like a protest, has a way of skewing opinions, forums reviewing the rationale for an agency contract award decision prefer to review the reasons given by the contracting officer at the time the contract award was made. Statements made later, during the protest process, lack credibility. Postaward, midprotest government documentation of the award may be considered suspect.
Under limited circumstances, however, GAO allows preparation of “adequate documentation” in the middle of the protest. When the post-award documentation is believable and consistent with the contemporaneous evaluation documentation, GAO may find it adequate.
One case shows that sometimes the contracting officer can win a protest the hard way. One way is to skimp on the paperwork but find a justification for the award elsewhere. The contracting officer will get a protest but can win it.
A Source Selection Evaluation Board (SSEB) concluded that High-woods’ proposal was technically superior to Simborg’s. Significantly, the contracting officer, who would decide the winner, was on the SSEB. Based on the SSEB’s recommendation and her own evaluation conclusions, the contracting officer selected Highwoods for award. Her award decision, however, was not described or detailed in writing at the time she made the decision. Why the award was made was described by the contracting officer only after award and then as part of a protest. GAO denied a lack-of-documentation protest. “While we generally accord greater weight to contemporaneous evidence, we will consider post-protest explanations that provide a rationale for contemporaneous conclusions, so long as those explanations are credible and consistent with contemporaneous record.” That happened here, according to GAO. The contracting officer’s post-award decision “shows that she considered the scores and the SSEB findings, and is consistent with the narrative summaries documenting her own evaluation (as one of the evaluators) of the strengths and weaknesses in the offerors’ proposals under each technical factor.” Since the pre-award evaluation was consistent with the post-award documentation, GAO found the post-award documentation acceptable.10
Unlike the GAO process, some judges on the COFC are reluctant to allow contracting officers to give additional rationale for the award decision once the protest process has started. At the COFC, the standard is somewhat more strict, though this more strict standard varies from judge to judge. A COFC judge may refuse to allow additional statements from both sides to be considered during the protest process, especially if the judge had enough information provided from the information before the contracting officer at the time the contract award was made.
A protester argued that the contracting officer’s decision document proved the government did not properly evaluate prices. The contracting officer naturally wanted to say she had done so. She prepared an additional explanation, which the government asked the court to consider. The protester responded with additional information itself, expert opinion countering the contracting officer’s supplemental statement. The court didn’t want to hear anything other than what was already before it and excluded not only the government statement but also the protester’s response to it. A court can consider supplementation of the administrative record if the existing record has gaps in it. But if the judge can adequately review what the agency did from the information that was before the agency at the time the decision was made, there’s no need for further, litigation-driven rationalizations. Here, the court concluded that what was before the agency was good enough for the judge. The government’s price analysis was properly explained at the time the decision was made and thus there was no need for the additional statements of the contracting officer.11
In addition to these elements of the solicitation process, some parts of the contract administration process can be protested. One typical example of this is when the government modifies the contract and a competitor believes that the modification should have been put out for bids from other vendors, rather than given sole source (that is, noncompe-tively) to the incumbent contractor.
Some things cannot be protested to GAO. For example, if Congress has made another agency responsible for certain actions, GAO won’t handle protests of them. These include:
Disputes by state licensing agencies under the Randolph-Sheppard Act;12
Determinations by the Small Business Administration under the certificate of competency program;13
Protests of awards under the Javits-Wagner-O’Day Act.14
One of the most unlikely losing arguments a protester can make is that the winner’s price was too low. It’s considered unlikely, because as agencies are strapped for cash, it would seem they should favor the vendor with the lowest price—no matter how low the price. For the same reason, it would also seem strange that an agency would disqualify a vendor for having too low a price. And perhaps strangest of all, an agency generally cannot disqualify a vendor with a price that is too low. The general rule is that a price too low is not a good enough reason to disqualify a vendor in a fixed-price solicitation. Unless an agency states in the solicitation that it will consider an offeror’s price as an indication of how well the offeror understands what the government wants, or, unless an agency wants to avoid the risk of poor performance under contract with low profit, a too low price is irrelevant.
An Air Force solicitation was issued as a Small Business Historically Underutilized Business Zone (HUBZone) set-aside. The solicitation expressly and incorrectly warned vendors that “any offer could be rejected if it is unreasonable as to price.” The proposal of J.A. Far-rington Janitorial Services (JAF) lost because its proposal was too low, indicating to the Air Force that the vendor did not understand what the Air Force wanted. GAO sustained Farrington’s protest. Agencies should have a different focus on price reasonableness depending on whether the contract will be a fixed-price contract or a cost reimbursement contract. When awarding a fixed-price contract, the price reasonableness issue deals with only whether the proposed price is too high. That’s because a fixed-price contract “places the risk and responsibility for contract costs and resulting profit or loss on the contractor.” So the price is the vendor’s problem.15
A cost-reimbursement contract, however, is different. If a vendor’s proposal for a cost-reimbursement contract has a price that is too low, the government runs the risk of not having the contract completed successfully. If the agency wants to be able to throw out a vendor for having a price that is too low, the solicitation must say that the agency will do a price realism analysis, in GAO’s words, “for such purposes as measuring an offeror’s understanding of the solicitation requirements, or to avoid the risk of poor performance from a contractor who was forced to provide goods or services at little or no profit.”16 Also, a “too-low price” decision actually involves responsibility:
Where there is no relevant evaluation criterion pertaining to realism or understanding, a determination that an offeror’s price in a fixed-price contract is too low generally concerns the offeror’s responsibility, i.e., the offeror’s ability and capacity to successfully perform the contract at its offered price.17
WHEN CAN SOMETHING BE PROTESTED?
The rule for timely filing of a protest depends on what is being protested. There are really only two choices: a protest of something in the solicitation package and a protest of everything else.
Pre-Award Protests
If a protester does not like something in the solicitation package (e.g., the RFP evaluation factors), they must protest prior to the time that the offers or bids are to be received.
Initial offers were due at GSA by 4:45. An offeror submitted its offer to GSA before 4:45. But the offeror’s protest of the GSA solicitation package did not get to GAO until 4:48. GAO concluded that the protest was too late.18
But there is some “forgiveness” on GAO’s rules: a filing made via email, received by GAO at 5:30 p.m. and 35 seconds was considered timely because, for GAO filings, the time of filing will be viewed as 5:30 p.m. until the clock actually reaches 5:31 p.m.19
As a practical matter, pre-award protests should be filed as soon as poss ible, to whatever forum or forums are available, and if one forum (the agency, GAO, or the COFC) will not deal with it, go to another one.
When the National Park Service issued a solicitation for ferry services to Alcatraz Island, the solicitation did not make the resulting contract subject to the Service Contract Act (SCA) as it should have. After losing the contract, a protester went to court, arguing that the winner’s bid had failed to comply with the SCA, making the Park Service’s evaluation of the winner’s cost improper. The CAFC concluded that it was too late for the protestor to make that argument because it was based on the terms of the solicitation and did not involve the Park Service’s faulty evaluation of the winner’s offer. By failing to raise the failure of the solicitation to include the SCA, the protestor had waived its right to protest. “If there is something wrong with a solicitation, the proper procedure for the offeror to follow is not to wait to see if it is the successful offeror before deciding whether to challenge the procurement, but rather to raise the objection in a timely fashion.”20
Although the issue in this case was a patent ambiguity in the solicitation—the failure of the National Park Service’s solicitation to include the SCA—the CAFC extended the rule to all pre-award situations.
The strangest protest situation was the protest of an amendment issued after all offers had been submitted. Although the bidding process had closed, the protester had two-and-one-half months between the time the amendment was issued and the award. The important point was that the contract had not yet been awarded, so there was still time to protest the amendment.21
Finally, the protester should not take a “no” from one protest forum as a call to end the protest process. In another case, the CAFC credited the protester for going to GAO and then to the COFC prior to the bid deadline.22
Also, sending the government pre-award “mere notice” of the bidder’s dissatisfaction with requirement for compliance with a specific statute “did not adequately present pre-award objection to solicitation”; a formal agency protest was required.23
Everything Else
If the protest doesn’t deal with the solicitation package, the protest is a protest of “everything else.” This catchall category includes such things as a protest over being thrown out of the competitive range; a protest over not being found responsible; a protest over whether the agency had meaningful discussions with an unsuccessful vendor; and, more generally, a protest that the winner should not have won.
Protests of everything else must be made within ten days.
A protest based on other than alleged improprieties in a solicitation must be filed not later than ten calendar days after the protester knew, or should have known, of the basis for protest, with an exception for protests that challenge a procurement conducted on the basis of competitive proposals under which a debriefing is requested and, when requested, is required. . . . In such cases, protests must be filed not later than ten days after the date on which the debriefing is held.24
So this “everything else” category has a ten-day deadline, but the real issue is ten days from when?
Ten days from:
1. Knowing the basis of a protest—a fact not open to dispute.
2. When a vendor “should have known” the basis of a protest
When a vendor should have known the basis of a protest is more difficult to identify.
Significantly, a protester’s clock does not start if the vendor is merely suspicious of government conduct that could be protested.
A real estate developer, MP, learned it had lost a government project on February 2. On February 4, in a conversation with its construction company, MP learned that the winning developer had contacted the construction contractor wanting that contractor to prepare plans and build the government building. Because these plans were supposed to have been submitted as part of the offer, MP suspected that the winning developer had won without submitting plans with its offer as required. MP confirmed that suspicion on February 11 when the government told MP that the winner had not submitted plans with its offer. MP filed its protest on February 19. The government argued that the protest was too late, that the losing developer should have filed the protest within ten days of February 4, the day it had the conversation with the construction company.
GAO concluded that MP’s protest was on time. Although the conversation MP had with the construction contractor might have led MP to conclude that the winner had not submitted the required plans with its proposal, “that suspicion alone was not adequate to trigger the running of the ten day period for filing a protest. . . . MP could not have discerned from the conversation what information the winner had included with its proposal, the form of that information, or the level of detail describing the proposed new building for the agency to evaluate (e.g., architectural drawings, sketches, schematic plans, landscape, or elevation plans).” It was only after the government confirmed the absence of plans with the winner’s offer that the protest clock started.25
3. A required debriefing
One exception to the “ten-day knew or should have known” rule involves a “required debriefing.” When there has been a required debriefing of a procurement using competitive procedures, the protest deadline is ten days from the required debriefing.
First, what are debriefings?
They are meetings held by the government to explain to a losing vendor why the vendor lost the negotiated contract. (FAR 15.505 deals with pre-award debriefings; FAR 15.506 deals with postaward debrief-ings.) A debriefing may be in writing or in person. Normally, a debriefing lasts an hour or so, but it can go longer if a complex solicitation is involved.
Second, what is a required debriefing?
A required debriefing is one for which a protester has followed, for example, FAR 15.506, which allows a protester to get into the government’s hands a written request for a debriefing within three days from learning that the protester lost. If a protester follows this tight timetable, they get the required debriefing.
Third, what is a procurement using competitive procedures?
Generally, it’s a solicitation using FAR Part 15 negotiation procedures. Surprisingly, a competitive solicitation under the Federal Supply Schedule was not a procurement entitled to the “ten days from debriefing” exception.
The Navy issued a request for quotations for information technology (IT) help-desk support services to 12 vendors on the General Services Administration’s Federal Supply Schedule (FSS). The solicitation package sure looked like a “competitive procurement.” It had a statement of work, instructions to vendors regarding the submission of quotations, a description of four evaluation factors for award, and a “best value” basis of award.
MIL protested to GAO well within ten days of a debriefing, but well after ten days from learning it had lost. GAO said that MIL had filed its protest too late. This FSS competition was not a procurement based on competitive proposals. “The term ‘competitive proposals’ is not defined by our Bid Protest Regulations, nor is it defined by statute or regulation. However, we have previously determined that the use of negotiated procedures in accordance with Federal Acquisition Regulation (FAR) Part 15 and as evidenced by the issuance of a request for proposals, constitutes a procurement conducted on the basis of competitive proposals. . . .”
Here, the procurement was not conducted pursuant to the negotiated procedures of FAR Part 15, nor did it involve the issuance of a request for proposals. Rather, the procurement was conducted under the FSS program, pursuant to the procedures set forth in FAR Sub-part 8.4 and using a request for quotations.26
There is also an exception to all the GAO protest deadlines: GAO rules say GAO can hear a late protest “for good cause shown” or where GAO “determines that a protest raises issues significant to the procurement system.”27 These exceptions are rarely used.
Under this exception, our Office may consider an untimely protest that raises issues significant to the procurement system that have not been considered previously; however, in order to prevent the timeliness rules from becoming meaningless, this exception is strictly construed and seldom used.28
In some cases, the COFC has followed the GAO rule requiring protests of the solicitation package to be made before the deadline for submission of offers. However, this isn’t true for all cases.
[T]his court, with all due respect, fails to see how a GAO rule that self-limits that agency’s advisory role constitutes a limit, either legally or prudentially, on this court’s exercise of jurisdiction. In this regard, 28 U.S.C. § 1491(b)(1) (2000) explicitly provides that this court shall have bid protest jurisdiction “without regard to whether suit is instituted before or after the contract is awarded.” In this court’s view, while delay in bringing a protest undoubtedly may be considered in the multi-factored analysis of whether injunctive relief is warranted, absent the application of equitable doctrines such as laches, such delay does not constitute an independent legal ground for rejecting a request for injunctive relief. Indeed, were this court to rule otherwise, it seemingly would have to apply the entire GAO rule, which includes exceptions to the timeliness requirement for “good cause shown” or if a protest raises “issues of significance.” 4 CFR 21.2(c). This court cannot imagine that Congress intended this court’s bid protest jurisdiction (or the prudential exercise thereof) to rise or fall on such squishy considerations.29
Another COFC judge concluded that GAO’s timeliness rule “is not binding on this court.”30
HOW IS SOMETHING PROTESTED?
GAO Protests
The GAO regulations describe what a protest has to include:
(c) A protest filed with GAO shall:
(1) Include the name, street address, electronic mail address, and telephone and facsimile numbers of the protester,
(2) Be signed by the protester or its representative,
(3) Identify the contracting agency and the solicitation and/or contract number,
(4) Set forth a detailed statement of the legal and factual grounds of protest including copies of relevant documents,
(5) Set forth all information establishing that the protester is an interested party for the purpose of filing a protest,
(6) Set forth all information establishing the timeliness of the protest,
(7) Specifically request a ruling by the Comptroller General of the United States, and
(8) State the form of relief requested.31
COFC Protests
It takes much more effort and a lot more money to file a protest at the COFC. Its rules make a protester file a formal complaint that is typically drafted by a lawyer.
Here’s one reason why. Unlike GAO rules that spell out exactly what a protest should include, the COFC says simply:
A civil action is commenced by filing a complaint with the court.32
This is why a lawyer can be especially helpful at the COFC.
The Automatic Stay
The protest process has two distinct battles: the fight over the protest itself, which we have discussed, and the fight over the automatic stay that immediately prevents the government and the winning contractor from working on the protested-and-stayed contract until the protest has been resolved.
The “automatic stay” fight began in 1984, when Congress gave something important to potential contractors and something else important to government agencies. To potential contractors, Congress gave the right to automatically stop the performance of a protested contract until the protest was settled. All a protester had to do was file a protest early in the contracting process, and the government had to stop work immediately on that contract until the protest was over. And to government agencies, Congress gave an “almost automatic” override of the automatic stay given to contractors. It did so by giving the government a number of huge loopholes that would allow it continue with a protested procurement—that is, let it override the automatic stay—if necessary.
The exact loophole the government could use to override the automatic stay depended on where the protest had been filed (agency or GAO) and how early in the process it had been filed (before award or after). If a protest was filed before the agency awarded the contract, the winning contractor could keep working if someone above the contracting officer found that continued performance was “in the best interest of the government” or that there were “urgent and compelling reasons” for continuing performance.33
These same two loopholes are available to override a stay imposed in a postaward protest to an agency. But to get the stay in the first place, a protester must file the protest extremely early in the contract performance process.
If the protest is before the GAO, the government has a harder time overriding the stay. The override decision has to be made by someone way above the contracting officer’s pay grade—usually, the agency’s head of contract activity.
Before an award, there is only one loophole: urgent and compelling circumstances. If the protest to GAO is filed after an award, there are two loopholes: best interest (as mentioned above) and urgent and compelling reasons. Although these similar loopholes are huge, some government overrides don’t get through them. Two rules have arisen from override decisions.
First, if the work could have continued under an incumbent contract, the government’s “urgent and compelling” argument could be in trouble. The government said it had to override the stay to continue providing health benefits since the automatic stay would delay streamlining of the health administration process by four months. The court didn’t agree. The government had not considered that it could play catch-up if delayed by a protest. Second, the government claimed there was no easy way to extend the existing contracts to cover any delay that might be caused by a protest, “potentially leaving the beneficiaries without services.” But the court noted that the contracts being protested included FAR 52.217-8, which authorizes extensions of the existing contracts of up to six months to deal with delays occasioned by bid protests. Third, the government argued that the new contracts would be better for the healthcare beneficiaries. The court agreed but said, in effect, so what. The override refers to the best interests of the United States, not those of the agency or the agency’s contracting officials. To the court, the best interests of the United States “necessarily include weighing the benefits Congress obviously felt were furthered by bolstering the bid protest process and in turn, promoting competition contracting.”34
In another case, the court would not let HUD override a stay of a contract for services to sell HUD properties. The judge said, “Normally the fact that a new contract is better than an old contract would not constitute a valid basis for an override decision.” Here, a new contract was not essential because the incumbent contract still had several months left on it. Also, the new contract covered two whole states but the override was based on only the Chicago HUD program. In addition, only ten properties would be involved. Finally, the incumbent could do the new work under its original contract or under a contract modified under the Changes clause. Because the incumbent could do this work, any need for the new contract to help “several properties in Chicago cannot rationally form the basis for an urgent and compelling circumstance and best interests of the United States determination to authorize performance of the new contract which covers all of Illinois and Indiana.”35
National defense, however, can easily justify overriding a stay and letting contract performance continue.
Cell phone calls depend on the electromagnetic spectrum, a range of frequencies that the whole world has to fight over because there is only so much within the range. Which country gets which frequencies allocated to it depends on international conferences. To prepare for an important conference, DOD awarded a contract for spectrum management engineering services. After one unsuccessful offeror protested and got the automatic stay, the government overrode the stay using both loopholes: best interest of the United States and urgent and compelling reasons. The protester challenged the validity of the override but lost. One reason was that important preliminary international meetings would be held during the override period. More important, these preliminary meetings dealt with issues that DOD had classified, well before the protest, as “high” concern rather than “moderate” or “low” concern. The court thought that DOD could best represent the government at the 2007 major conference if it was well represented at these preliminary meetings. The court found that there was a time-critical need for performing the protested services during the override period. Also, the protested work involved “new work,” so there was no incumbent contractor that could be used during the override period. And the court did not agree with the protester that the government “by some mixing and matching of the pre-existing contracts” could find the people to do the work during the override.36
“Appeals” of GAO Protest Decisions to the COFC
There is a new area of protest law evolving at COFC. It involves protesters successfully challenging the proposed corrective action an agency plans on taking based on a GAO recommendation.
As discussed earlier, unsuccessful offerors typically file a protest at GAO. Because it is in everybody’s interest, GAO attorneys on occasion attempt to give all the parties to the protest—the protester, the inter-vener awardee, and the agency involved—advanced notice of what the GAO attorney thinks the probable outcome would be if the protest went on for the entire one hundred days allowed for a GAO decision. This form of alternative dispute resolution is typically welcomed by all sides. If the GAO attorney indicates that the protest has merit, agencies often follow the GAO recommendation on the corrective action needed to fix the mistakes that GAO believes were in the solicitation process.
For example, if GAO thinks that source selection authority’s (SSA) decision document should have included more detail, the agency will propose, with GAO’s encouragement, that the agency go back and rewrite the document. Protesters generally like this proposed corrective action because it gives them a second chance to win the contract. Winners, of course, do not like the fix because it puts the contract they thought they had won in jeopardy. As the following case indicates, winners are challenging the agency’s proposed corrective action based on the GAO recommendation. The awardee goes to the COFC to argue that the GAO recommendation itself was irrational and therefore the agency is carrying out an irrational decision itself. A decision of the COFC gives a good example of what the court thought was an irrational GAO decision that an agency was irrational in attempting to follow. The court in this case prevented the agency from carrying out the proposed corrective action: terminating the contract for convenience and resoliciting.
The Army issued a solicitation for aerial target flight operations and maintenance services. The award would be made on the basis of the best value trade-off involving three non-price factors. During the solicitation process, the Army issued solicitation Amendment 3, which was a new wage determination to carry out the Service Contract Act. Specifically, a new collective bargaining agreement was made applicable to the solicitation. After the Army awarded the contract to SA-TECH, the Army sent the unsuccessful offerors, including Kratos on February 1, 2011, award notification letters telling them they had lost. The letter to Kratos said that it and SA-TECH had both received “outstanding” ratings for the two major evaluation factors.
Kratos protested to GAO on February 22. But when it filed its protest, Kratos focused only on an alleged probl em Kratos had with Amendment 3, arguing that the amendment added a new requirement to the RFP because it required offerors to propose a labor mix that complied with the collective bargaining agreement. Its initial protest did not challenge the “Outstanding” evaluation ratings it and SA-TECH received. It only challenged these evaluation results when, in a supplemental protest filed on April 4, Kratos argued that the outstanding ratings for both offerors were unreasonable.
SA-TECH asked GAO to dismiss as untimely the supplemental protest challenging the evaluation process. Protest issues have to be raised generally within 10 days after an offeror learns of the basis of the protest. Because Kratos knew, on February 1, of the “Outstanding” evaluation results raised in its April supplemental protest, protesting them in April was way too late.
At that point the GAO lawyer got involved. He suggested to both parties that there was no need to deal with the Supplemental Protest’s timeliness issue nor its “Outstanding” evaluations issue because they were irrelevant. The real errors in the solicitation were “the deficiencies in the source selection decision memorandum.” According to the GAO attorney, GAO “would likely sustain the protest on this ground.” Significantly, these supposed errors had never been protested by Kratos and perhaps only came to light as a result of the late Kratos supplemental protest.
The Army then told GAO that the Army would take proposed corrective action to terminate for convenience SA-TECH’s contract, re-open the solicitation, amend the solicitation to make clear what Amendment 3 was intended to do, accept revised proposals, prepare another source selection document, and make another award. Based on this proposed corrective action, GAO dismissed the protest.
SA-TECH went to the COFC to stop the termination for convenience and the re-solicitation process, arguing that the GAO recommendation was irrational and as a result the Army itself was acting irrationally in following the GAO recommendation.
The court agreed. The GAO recommendation was irrational. “The GAO attorney’s statement that the timeliness of Kratos’ protest was irrelevant clearly contravenes the statutory mandate that the GAO not entertain untimely protests and when GAO acts in violation of the law, the act lacks a rational basis. The GAO attorney’s statement on timeliness is therefore irrational.”
Also irrational was the GAO attorney’s conclusion that the Army’s award decision process had errors in it. According to the court, the GAO attorney completely misread the decision of the source selection authority. In concluding that the Army’s award decision had errors in it, the GAO attorney failed to give the proper deference to the agency decision-making process which resulted in him substituting his judgment for that of the Army. “He may not do so.”
Turning to the Army’s decision to take the proposed corrective action, the court concluded that the Army’s decision was also irrational. Despite what the Army claimed in its proposed corrective action, the court saw no problem with Amendment 3. “There is no indication in Amendment 3 that the Army intends to do anything other than change the minimum wage and fringe benefit amounts that the successful offeror would be required to pay its employees; the sections of the RFP describing the proposal requirements and evaluation criteria were not amended.” In addition, the court saw no problems with the Army’s source sel ection document and concluded that it should not be disturbed. Because that document was proper, the Army’s decision to fix it was irrational.
The court concluded by declaring that the Army’s decision to terminate SA-TECH’s contract for convenience was improper and issued an injunction against the Army implementing the corrective action.37