The following is an installment in Crowell & Moring’s 2023 Bid Protest Sustain of the Month Series. All through 2023, Crowell’s Government Contracts Practice will keep you up to date with a summary of the most notable bid protest sustain decision each month. Below, Crowell Partner Cherie Owen discusses several protest decisions issued in October that provide helpful insights about the GAO protest process.
In October, GAO issued only one sustain decision, which – as of the time of this blog post – was subject to a protective order and had not yet been publicly released. The Court of Federal Claims also did not release any sustain decision in the month of October. Therefore, instead of highlighting a bid protest sustain from the past month, October’s Sustain of the Month Series installment focuses on the other end of the spectrum: bid protest dismissals. The vast majority of GAO’s dismissal decisions are unpublished (or in GAO-speak, “undigested”). Most dismissal decisions consist of less than a page of text and adopt standard language explaining the basis for common procedural deficiencies, such as untimeliness, lack of jurisdiction, or lack of interested party status.
However, dismissal decisions can provide helpful guidance to both agencies and outside counsel when either pursuing or defending against a dismissal request. In this context, practitioners sometimes experience frustration that the body of caselaw addressing dismissal arguments is relatively thin as compared to the robust body of precedent addressing substantive protest issues. In recognition of the utility of its dismissal decisions, GAO has, over the past decade or so, increased its issuance of “digested” dismissals – dismissal decisions that are published and available to the public. Although the month of October was light on sustain decisions, it offered a wealth of digested dismissal decisions – no fewer than five – addressing a variety of topics, from the meaning of “adverse agency action,” to interested party status, to jurisdictional considerations. A few of the most notable dismissal decisions are addressed below.
GAO protests are subject to strict timing requirements – protest too soon and the protest could be dismissed as premature; protest too late and the protest could be dismissed as untimely. Several of the dismissal decisions issued in October provided additional guidance regarding these considerations – for example:
- In Capgemini Government Solutions, LLC, B-421962 (Oct. 4, 2023), an RFQ instructed vendors to distribute a past performance questionnaire to all past performance references included in their quotations. The protester, who was also the incumbent contractor on the solicited requirement, requested that its Contracting Officer’s Representative (COR) on the incumbent contract complete a past performance questionnaire for its incumbent performance. In response, the COR refused to complete the questionnaire citing purported “conflict of interest” concerns and recommended that the protester “consider” a different contract “to solicit past performance information.” The company protested, arguing that the agency’s actions indicated that the agency would not consider its past performance under the incumbent contract. However, GAO dismissed the protest as premature, noting that the protest was filed prior to the completion of the agency’s evaluation. GAO further noted that the agency had not otherwise provided substantive notice that it interpreted the solicitation to prohibit the evaluation of past performance on the incumbent contract. As a result, the protest was premature. (Despite dismissing the protest, GAO made clear in a footnote that the COR’s position was likely incorrect, citing numerous GAO decisions finding no conflict in such situations.)
The Capgemini decision provides helpful guidance for potential protesters. Although the COR’s refusal to complete a questionnaire had the potential to negatively impact Capgemini, GAO noted that there was no indication that the individuals conducting the competition shared the COR’s view or that the COR’s position represented the official position of the agency. In such situations, companies may need to distinguish the fine line between a challenge to the terms of a solicitation/ground rules of the procurement (which must be raised early in the process), versus a challenge to the agency’s evaluation, (which generally must be raised after award or after the company’s elimination from the competition).
- In BDO Public Sector, LLC, B-421677.2 (Oct. 3, 2023), GAO addressed the other end of the spectrum – a protest that was filed too late. In this case, BDO had been awarded a contract, and Deloitte, a disappointed offeror, protested. The agency filed a corrective action notice stating that it planned to conduct a reevaluation and make a new award. In the midst of this corrective action, BDO filed an agency-level protest arguing that Deloitte was ineligible because it had several OCIs. On August 21, the agency emailed BDO’s counsel, stating that the protest had been sustained in part and that the agency would cancel the solicitation and resolicit its requirements. The agency allowed BDO’s counsel to share this information with BDO itself outside of the protective order, but stated that the written decision resolving the protest would be released at a later date, after it had been reviewed in accordance with the agency’s information security policies. The agency released the written protest decision on September 1 and BDO protested the cancelation of the solicitation to GAO on September 11. GAO dismissed the protest, noting that the agency’s August 21 notice constituted “initial adverse agency action,” which triggered the 10-day clock for filing a protest at GAO. Although BDO attempted to argue that it did not receive the agency’s full analysis (showing the full extent of the purported errors in the protest outcome) until September 1, GAO disagreed, stressing that the protest clock for filing at GAO following an agency-level protest begins to run from the time of “initial” adverse agency action. On the date that BDO received the agency’s initial notice, it was aware that the solicitation would be cancelled – the procurement action that was the subject of the GAO protest. Therefore, the protest was untimely because it was not filed within 10 days of this notice.
Together, these dismissal decisions demonstrate the complexity and importance of GAO’s bid protest timeliness rules. Small nuances can have a significant impact on whether a company is able to pursue its protest at GAO.
Interested Party Status and Prejudice
GAO also released multiple decisions in October addressing the related issues of interested party status and prejudice. To succeed in a protest, a company generally needs to show both that it is an interested party to pursue the protest and that it suffered prejudice as a result of the procurement errors. With respect to interested party status, in post-award bid protests, a company must be an actual bidder or offeror with a direct economic interest in the procurement. This usually means that the protester would be in line for award if the protest were sustained. A protester who cannot receive an award if it prevails on the merits of its protest is not an interested party.
After establishing that it is an interested party, a protester must also demonstrate prejudice to prevail on the merits of its bid protest. To demonstrate prejudice, a protester needs to show that, but for the agency error, the company would have had “a substantial chance” of receiving the award. Two dismissal decisions issued in October address the interested party and prejudice standards:
- In Global Engineering Services, LLC, B-421866 (Oct. 2, 2023), the 60-day bid acceptance period of the offerors’ proposals had expired after the agency had completed its evaluation, but before award was made. Shortly after expiration of this acceptance period, the agency contacted Global and asked if it would extend the validity of its proposal and confirm that its prices remained valid. Global declined to do so and instead submitted an “updated” (increased) price proposal. The agency ultimately made award to the next-in-line offeror. Global then protested the award. GAO dismissed the protest, finding that Global was not an interested party to challenge the award because, “[w]here a bidder qualifies an extension to its bid acceptance period by conditioning it upon a change in a material term of its bid – such as price – that bidder is ineligible for award after the original bid expires.” Because Global was ineligible for award, it was not an interested party to pursue its challenge of that award.
- In International Service Contractors, LLC, B-421326.2 (Oct. 27, 2023), GAO considered the related issue of prejudice. There, ISC protested its exclusion from the competitive range. However, under the terms of the solicitation, the agency was required to give preference to another offeror pursuant to the Randolph–Sheppard Act. In considering the protest, GAO concluded that, even if ISC was successful in its challenge and was placed back into the competitive range, the company did not have a substantial chance of receiving the award because the agency was obligated to award to the other offeror pursuant to the statutory preference. Therefore, GAO concluded that ISC could not demonstrate that it was prejudiced by the alleged procurement error.
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Although October was light on sustained protests, GAO’s decisions nevertheless provided a wealth of guidance for companies and agencies with respect to issues that are integral to every protest. When considering whether – and when – to protest, companies should confer with their in-house or outside counsel experienced in GAO protests to ensure that a procedural issue does not hinder pursuance of the protest.