The following is an installment in Crowell & Moring’s Bid Protest Sustain of the Month Series.  In this series, 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 Consultant Cherie Owen discusses Peraton Inc., B-422409.2, B-422409.3, July 22, 2024, which provides helpful insight regarding protest timelines.

July 2024 was a drought month for the protest world: GAO did not issue a single sustained protest in July.  Therefore, as we have done in the past, this month’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  The vast majority of GAO’s dismissal decisions are unpublished (i.e., “undigested”).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 protest.  GAO’s decision in Peraton Inc. was much meatier than the average dismissal decision and provides a wealth of information about the timeline for raising challenges related to organizational conflict of interest (OCI) investigations and corrective action challenges. 

The procurement was conducted by GSA on behalf of the United States Army Intelligence and Security Command, Army OSINT Office (AOO) seeking open-source intelligence services.  The agency had initially eliminated Peraton from the competition over concerns that Peraton had an organizational conflict of interest (OCI) and unfair competitive advantage (UCA) in the competition based on its hiring of two former AOO staffers, and inclusion of those individuals in its proposal.  According to the agency, the former government employees had knowledge of, or access to, significant non-public information gained via personal involvement in the predecessor contract for the requirements and in the development of requirements for the current procurement.  Peraton protested its exclusion at GAO and, in response, the agency indicated that it would take corrective action, which would include reopening the investigation, affording Peraton an opportunity to respond to facts and information already gathered by the agency, and allowing Peraton to provide new or additional information in support of its position.  The agency would then make a new/revised OCI/UCA determination in light of all of the information and provide Peraton with an opportunity to respond to any final determination made.

In connection with its reopening of the investigation, the agency asked that the former government employees who now worked for Peraton provide information in response to agency questions, including agency questions about the nondisclosure agreements (NDAs) the individuals had signed while employed by the government.  Peraton requested that the agency provide copies of the NDAs and the agency responded that if Peraton needed the NDAs in order to respond to the government’s initial assessment of a potential OCI, then Peraton should provide additional details about why it needed the documents.  Instead of providing the details the agency requested, Peraton filed a protest at GAO alleging that: (1) the agency was impermissibly withholding relevant documents from Peraton by refusing to furnish the NDAs; (2) the contracting officer cannot be an impartial investigator or adjudicator because his investigation relies, in part, on his own knowledge of the individuals’ involvement in the procurement; and (3) the agency “has taken steps inconsistent with its proposed plan of corrective action, is engaged in what the protester characterized as ‘continued gamesmanship,’ and does not actually intend to reconsider its exclusion of Peraton from the competition.”  (In a supplemental protest, Peraton also alleged that the contracting officer was conducting an improper “covert” Procurement Integrity Act (PIA) investigation; GAO dismissed this protest ground noting that Peraton’s interpretation of the relevant regulation was unsupported and, in any event, the allegation was speculative.) 

GAO dismissed the protest in its entirety because it was premature.  With respect to the timing of the protest, GAO emphasized that “where an agency has not made a final determination concerning an OCI issue, a protest based on such an allegation is premature.”  More broadly, GAO noted that, where ongoing corrective action does not alter the ground rules of the competition, a protest of the conduct of that corrective action is generally premature when brought before award or the protester’s disqualification.  Therefore, Peraton’s complaints about the agency not providing a copy of the NDA, the contracting officer’s purported lack of impartiality, and the agency’s conduct of the investigation were all premature because they were filed before the agency made a final determination concerning the existence of an OCI or UCA. 

The timeliness of corrective action challenges is an issue that has created confusion for protesters for over a decade.  Much of this confusion arose as a result of GAO’s decision in Domain Name Alliance Registry, B-310803.2, Aug. 18, 2008, 2008 CPD ¶ 168, in which GAO dismissed as untimely post-corrective action, post-award protest arguments challenging the agency’s failure to conduct discussions as part of its corrective action.  In Domain Name, the agency made clear to the protester prior to the award that it did not intend to engage in discussions, but the protester waited until after the award to protest.  GAO found that the protest was untimely because the agency’s decision not to conduct discussions was essentially a challenge to the “ground rules” of the procurement.  Such ground rules challenges are akin to challenges to the terms of a solicitation, which must be raised pre-award. 

In contrast, Peraton’s protest arguments did not relate to the ground rules of the competition; instead, they anticipated improper agency action.  As a result, GAO dismissed the protest as premature, stressing that Peraton may file a protest after the agency’s final OCI/UCA determination has been issued.  Decisions like that in Peraton serve as reminders of the importance of protest timing.  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 their ability to pursue the protest.

We would like to thank Cherie Owen, Consultant, for her contribution.