Bid Protests * What We*re Fighting About This Year

Report
Bid Protests –
What We’re Arguing About This Year
Federal Procurement Institute
March 21, 2014
Jonathan L. Kang
U.S. Government
Accountability Office
Daniel R. Forman
Crowell & Moring LLP
William J. Grimaldi
U.S. Department
of Justice
Sharon A. Jenks
U.S. Department
of the Air Force
Carl J. Peckinpaugh
Computer Sciences
Corporation
1
Presentation Summary
• Corrective action
• Price realism
• Waivers of organizational conflicts of interest
• Other developments
• Questions
2
GAO BID PROTEST STATISTICS
FISCAL YEARS 2009 - 2013
FY 2013
FY 2012
FY 2011
FY 2010
FY 2010
2,429
(down 2%)
2,475
(up 5%)
2,353
(up 2%)
2,298
(up 15%)
1,989
(up 20%)
Merit (Sustain + Deny)
Decisions
509
570
417
441
315
Sustains
87
106
67
82
57
Sustain Rate
17%
19%
16%
18%
18%
Effectiveness Rate
43%
42%
42%
42%
43%
ADR (cases used)
145
106
140
159
149
ADR Success Rate
86%
80%
82%
80%
93%
4%
(31 cases)
6%
(56 cases)
8%
(46 cases)
10%
(63 cases)
12%
(65 cases)
Protest Filings
Hearings
3
GAO Annual Bid Protest Filings FY 1985-2013
3500
3000
Protests Filed
2500
2000
1500
1000
500
4
Corrective Action at GAO
• Corrective action is an important part of the GAO bid protest process.
• The recent government shutdown is illustrative of the role of corrective
action at GAO:
• The federal government was closed for 17 days, reopened on Oct. 17,
2013.
• 173 protests were filed on the 17th and 18th, which resulted in 100-day
CICA due dates of Jan. 27, 2014.
• Agencies took corrective action in response to approximately 50 percent
of protests that were due on Jan. 27.
5
Agency Perspectives on
Corrective Action
Company X filed a protest, do we defend or take corrective action?
1. Is this a pre-award protest?
• What is the business impact of delaying award? Do we anticipate other rounds
of protest in the future (competitive range cut and/or post-award)?
• Do the protest grounds just impact protester or do they impact multiple offerors
• Does protester have a point? Even if we can defend, is that the right thing to
do?
• Do we have the documents and resources to successfully defend?
• Are there other issues, not raised by protester, that should be addressed at
this point?
• Is corrective action fair to other offerors? If protester ends up as awardee, is
the corrective action defensible?
6
Agency Perspectives on
Corrective Action, continued
Company X filed a protest, do we defend or take corrective action?
2. Is this a post-award protest?
• Is there a mandatory stay of performance?
• Did we execute an override?
• If no stay, where will performance be in 100 days?
• Does protester have a point? Even if we can defend, is that the right thing to
do?
• Do we have the documents and resources to successfully defend? (If OCI
allegation, can a meaningful investigation be performed before the Agency
Report is due?)
• Are there other issues in the procurement that should be fixed or at least revisited?
• Is the solicitation still reflective of agency needs? With task orders, are we still
within the ordering period?
7
Agency Perspectives on
Corrective Action, continued
Company X filed a protest. We filed an agency report and GAO has held
outcome prediction indicating a sustain, do we take corrective action?
•
•
•
•
•
Has the GAO attorney addressed all of the protest issues? Does we have
confidence that other issues not indicated as a basis for a sustain will be
denied in a future protest?
Has the GAO attorney sufficiently explained WHY there appears to be a
prejudicial error? Does the client understand the rationale?
Did the GAO attorney suggest a corrective action? If so, what was it? Do we
want to be able to shape the scope of corrective action?
What is the likely increase in protest costs if we wait for a written decision?
Is the client willing to explain a sustained protest to the head of the agency?
8
Agency Perspectives on
Corrective Action, continued
Scope of Corrective Action in Voluntary Notice:
• Notice will likely promise the minimum, including the possibility of a new award
decision, but reserve the right to take any other corrective action as deemed
appropriate by the agency
• More detail may be provided if we anticipate objections to the ground rules (i.e.
certain aspects of the evaluation that we will not revisit, limits on discussions and
proposal revisions, etc.)
• When executing corrective action, always anticipate another protest
• Even aspects of procurement that were defensible may be revisited and receive
additional documentation
• When implementing corrective action, additional issues may be uncovered and scope
of corrective action may be enlarged
9
Agency Perspectives on
Corrective Action, continued
Sustained protest Corrective Action:
• What does decision include as recommendation?
• Has GAO suggested the agency relook at other aspects of the procurement, even if
they were not the basis for the sustain?
• If a written decision, GAO’s recommendation must be implemented in 60 days. If we
want to perform additional corrective action, can we get it all done within the deadline?
10
Agency Perspectives:
Trying to Get Finality
History of the Light Air Support (LAS)
procurement and corrective action
•Oct. 29, 2010: Air Force issues a solicitation for nondevelopmental, production-ready, turboprop Light Air Support
(LAS) aircraft to establish air combat capabilities for the
Afghanistan Air Force
•Nov. 1, 2011: Air Force issues a memorandum excluding
Beechcraft from the competitive range and informing it that its
proposal was considered technically unacceptable
11
Agency Perspectives:
Trying to Get Finality, continued
•Nov. 21, 2011: Beechcraft files a protest at GAO challenging its
evaluation and exclusion from the competitive range. GAO
dismissed this protest as untimely. Hawker Beechcraft Def.
Company, LLC, B-406170, Dec. 22, 2011, 2011 CPD ¶ 285.
•Dec. 22, 2011: Air Force awards a contract to Sierra Nevada
Corporation (SNC)
12
Agency Perspectives:
Trying to Get Finality, continued
•Dec. 27, 2011: Beechcraft takes its protest to CoFC. Following
difficulties in assembling the administrative record and review of
evaluation materials suggesting possible disparate treatment, the
Air Force decided to take corrective action and set aside the
award to SNC, return Beechcraft to the competitive range, and
accept and evaluate revised proposals.
• CoFC dismissed the protest on May 7, 2012. Hawker
Beechcraft Def. Co., LLC v. United States, No. 11-897C (Fed. Cl.
May 7, 2012)
13
Agency Perspectives:
Trying to Get Finality, continued
• June 12, 2012, SNC files CoFC protest challenging the agency
decision to take corrective action and the reasonableness of the
corrective action itself. Corrective action proceeded during this
litigation.
• Other than a declaration that the agency had a duty to apply a
particular aspect of the revised solicitation, CoFC eventually
denied the protest on Nov. 1, 2012. Sierra Nevada Corp. v.
United States, 107 Fed.Cl. 735 (2012)
14
Agency Perspectives:
Trying to Get Finality, continued
•Feb. 27, 2013: Air Force again awards the LAS contract to SNC
•March 8, 2013: Beechcraft files a protest at GAO challenging the
evaluation and new award in various ways. During the protest process,
Beechcraft files two supplemental protests.
•Mar. 15, 2013: Air Force overrides the mandatory CICA stay as the
delivery schedule is unable to absorb additional delay
•Mar. 20, 2013: Beechcraft files at CoFC to challenge the override.
Following oral argument, the Court ruled from the bench on April 19, 2013
and denied the protest. Beechcraft Def. Co., LLC, V. United States, 111
Fed.Cl. 24 (2013)
•Jun 13, 2013: GAO denies all of Beechcraft’s allegations. Beechcraft
Def. Co., LLC, B-406170.2; B-406170.3; B-406170.4, June 13, 2013,
2013 CPD ¶ 147.
15
Corrective Action in the CoFC
• Typically, before GAO, the agency determines whether corrective action
is appropriate
• Before the Court of Federal Claims, DOJ must approve of any proposed
corrective action
• 28 U.S.C. § 516: “Except as otherwise authorized by law, the conduct
of litigation in which the United States, an agency, or officer thereof is a
party, or is interested, and securing evidence therefor, is reserved to
officers of the Department of Justice, under the direction of the
Attorney General.”
16
Corrective Action in the CoFC,
continued
• Multiple considerations factor into the decision to undertake corrective
action. For example:
• The agency committed a prejudicial error when making the
protested decision;
• The administrative record does not contain support for the agency’s
decision; or
• Impact of procurement upon national security.
• The United States considers similar factors when resolving all claims in
the Court of Federal Claims.
17
Corrective Action in the CoFC Logistics
• DOJ counsel must obtain the necessary authority to undertake corrective
action.
• Trial attorneys do not possess authority to undertake corrective
action without approval.
• The agency has the opportunity to present its opinion.
• The United States files a notice of corrective action with the Court.
• Notice provides plaintiff with the opportunity to accept or oppose
the corrective action.
18
Corrective Action in the CoFC Logistics
• Several days after the notice, the agency commences corrective action.
• Once the agency commences corrective action, the United States seeks
to terminate the protest.
• There is no need for a Court order if the plaintiff voluntarily
withdraws its protest or the parties stipulate to dismissal. See RCFC
41(a)(1)(A).
• If not, the United States may move to dismiss for mootness.
19
Corrective Action in the CoFC –
Mooting a Protest
• Following corrective action, the Court of Federal Claims should dismiss
the protest.
• “[A] case is moot when the issues presented are no longer ‘live’ or
the parties lack a legally cognizable interest in the outcome.”
Coastal Envtl. Grp., Inc. v. United States, No. 13-71C, slip op., at 4
(Fed. Cl. Jan. 6, 2014) (citation omitted).
• Mootness is derived from the Article III case or controversy
requirement, but the Court of Federal Claims is an Article I court.
• “Nevertheless, the Court of Federal Claims and other Article I courts
traditionally have applied the ‘case or controversy’ justiciability
doctrines.” Id. at 4 n.4.
20
Corrective Action in the CoFC –
Mooting a Protest
• Accordingly, the Court of Federal Claims has found mootness to be a
question of subject matter jurisdiction. CW Gov’t Travel, Inc. v. United
States, 46 Fed. Cl. 554, 556 (2000).
• But see Coastal Envtl. Grp., No. 13-71C, at 5 n.6 (discussing whether
a motion to dismiss for mootness should be pursuant to RCFC
12(b)(1) or 12(b)(6).
• Regardless, “[w]hen, during the course of litigation, it develops that the
relief sought has been granted or that the questions originally in
controversy between the parties are no longer at issue, the case should
generally be dismissed.” Chapman Law Firm Co. v. United States, 490
F.3d 934, 939 (Fed. Cir. 2007).
21
Litigating Corrective Action
in the CoFC
• The Court of Federal Claims will review proposed corrective actions.
• “An arbitrary decision to take corrective action without adequate
justification forces a winning contractor to participate in the process
a second time and constitutes a competitive injury to that
contractor.” Sys. Application & Techs. v. United States, 691 F.3d 1374,
1382 (Fed. Cir. 2012) (SA-TECH).
• Challenges to a non-tentative corrective action are ripe. Id. at 1384-1385
• Such challenges are sufficiently final even if the agency has not yet
issued a new award decision. Id.
22
Litigating Corrective Action
in the CoFC, continued
• Claims speculating that the agency will make new procurement errors in
in a corrective action, however, are not ripe. See Eskridge Research Corp.
v. United States, 92 Fed. Cl. 88, 94-95 (2010).
• The Court is “required to assume that the Government [will] carry
out the corrective action in good faith.” Id. at 95 (quoting Chapman
Law Firm Co. v. United States, 490 F.3d 934, 940 (Fed. Cir. 2007)).
• See also Boston Harbor Dev. Partners, LLC, 103 Fed. Cl. 499 (2012)
(finding a protester lacked standing to allege an agency would be
biased during a corrective action because the bias was purely
conjectural and contrary to the required assumption that the agency
would carry out the proposed corrective action in good faith).
23
Litigating Corrective Action
in the CoFC, continued
• The Court of Federal Claims will review the decision to under take
corrective action under the APA arbitrary and capricious standard. See
generally SA-TECH, 691 F.3d 1374.
• Accordingly, the agency’s explanation for determination of its needs,
here corrective action, is important.
• This applies whether the agency is adopting GAO’s recommendation
or undertaking unilateral corrective action.
24
Litigating Corrective Action
in the CoFC, continued
• The Court will find an an agency’s decision to undertake corrective action in
response to a GAO recommendation to be proper unless the decision itself is
irrational. Honeywell v. United States, 870 F.2d 644, 648 (Fed. Cir. 1989).
• The Court may find the decision to undertake corrective action to be arbitrary
if it is not narrowly tailored corrective action. Amazon Web Servs., Inc. v.
United States, 113 Fed. Cl. 102 (2013).
• However, an agency’s needs may change over time, requiring changes to
a procurement beyond those GAO recommends.
• Agencies should be careful to document its new determination of needs.
25
Advising Contractor Clients Regarding
Corrective Action
• Don’t be surprised if it happens
• Whether protester or intervenor, early engagement of
Agency counsel can be critical
• From protester’s perspective, open dialogue with agency to discuss views of
procurement / protest issues can alert Agency to problems not previously
considered and increase chances of corrective action
• From intervenor’s perspective, important to convey support in defending
award and to raise potential factual/legal arguments for Agency consideration
26
Advising Contractor Clients Regarding
Corrective Action, continued
• Corrective action is not always a “win” for the protester (esp. if
protester is not the incumbent)
• Stay pending corrective action is a big issue - need express
commitment from the agency
• Protective Orders impair communications with client (esp. for inhouse counsel, who are scrutinized more closely than outside
counsel)
27
Advocating for Contractor Clients
During Corrective Action
• Meaningful relief for protester generally involves
reopening of discussions and/or opportunity to submit
revised proposal
• There are exceptions (i.e., if awardee’s proposal was non-compliant,
reopening allows for cure)
• Important to craft underlying protest arguments that are most likely to
yield meaningful remedy if successful
•
Limited corrective action often results in piecemeal
protest/procurement process
28
Advocating for Contractor Clients
During Corrective Action, continued
• If Agency decides to take corrective action, intervenor
generally should try to limit to re-evaluation
• Awardee’s evaluated cost/price and non-price ratings have been
disclosed to disappointed offerors
• If Agency does re-open, intervenor should advocate to
level playing field
• Agency may, but is not required, to release evaluated cost/pricing of all
offerors as part of corrective action. Ocean Servs., LLC,
B-292511.2, Nov. 6, 2003, 2003 CPD ¶ 206
29
Limited Corrective Action
• Where an agency amends a solicitation as part of a corrective action and
allows offerors to revise proposal in response, offerors may make any changes
to their proposals that they care to, unless the amendment expressly limits the
changes that may be made. Quest Diagnostics, Inc., B-405081.5, Dec. 19,
2012; 2013 CPD ¶ 132; Quest Diagnostics, Inc. v. United States, 110 Fed. Cl.
716 (2013).
• There are circumstances where an agency reasonably may limit proposal
revisions during a corrective action. Computer Assocs. Int’l, B-292077.2, Sept.
4, 2003, 2003 CPD ¶ 157.
• However, where an agency amends a solicitation and allows offerors to
revise proposals, the agency must permit offerors to revise any aspect of their
proposals - including those that were not the subject of the amendment - unless
the agency can demonstrate that the amendment cannot reasonably have an
effect on other aspects of the proposal, or that allowing such revisions would be
detrimental to the competitive process. Cooperative Muatori Riuniti,
30
B-294980.5, July 27, 2005, 2005 CPD ¶ 144.
Limited Corrective Action, continued
• Agency was required to permit offerors to submit unlimited proposal revisions
where protesters argued that an amended evaluation methodology would
reduce the strength of their proposals in some areas, and they should be
permitted to revise other areas of their proposals to regain their competitive
advantages. Lockheed Martin Sys. Integration, B-299145.5, Aug. 30, 2007,
2007 CPD ¶ 155.
• Where agency amended solicitation’s past performance evaluation factor,
agency was required to allow pricing and other changes as well. Power
Connector, Inc., B-404916.2, Aug. 15, 2011, 2011 CPD ¶ 186. (“[W]e think that
the agency should remedy the concern regarding unequal disclosures of
information [disclosed in debriefings] by advising all offerors of the pricing
information.” (Emphasis added.)).
31
Challenging Agency Corrective Action
• At GAO, must show that the corrective action is not appropriate to remedy
the concern that caused the agency to take corrective action. Jones Lang
LaSalle Americas, Inc., B-406019.2,
Feb. 14, 2012, 2012 CPD ¶ 98.
• GAO will generally permit Agency to take limited corrective action so
long as it gives protester possibility of winning. See Hyperbaric Techs.,
Inc., B-293047.2, Feb. 11, 2004, 2004 CPD ¶ 87.
• GAO will object to an agency’s corrective action if the record
establishes either that there was no impropriety in the original
evaluation and award decision, or where there was an actual
impropriety, but it was not prejudicial to any of the offerors. See
Security Consultants Grp., Inc., B–293344.2, Mar. 19, 2004, 2004 CPD ¶
53.
32
Challenging Agency Corrective
Action, continued
•COFC standard for reviewing protests of corrective action is still evolving
• Sheridan Corp. v. United States, 95 Fed.Cl. 141, 151 (2010) – Court held that
corrective action must target the identified defect.
•Initial award made without discussions, but during protest, agency took
corrective action by “enlarging competitive range” and soliciting revised
proposals from three offerors even though the Solicitation remained
unchanged.
• Sierra Nevada Corp. v. United States, 107 Fed. Cl. 735, 750 (2012) – Court held that
that corrective action must be “reasonable under the circumstances.”
•Court stated that the standard set forth in Sheridan was unique to that case
and should not be exported to a more nuanced case, such as this.
•Unlike Sheridan, discussions had taken place and proposal revisions had been
submitted, so that resolicitation as opposed to reevaluation would be viewed as
reasonable in the circumstances.
33
Cost Awards with Corrective Action
• Protester awarded costs associated with staffing issue on which
agency took corrective action following GAO outcome prediction, but
protester was not entitled to costs associated with unrelated
procurement integrity issue. JV Derichebourg-BMAR & Assocs., LLCCosts, B-407562.3, May 3, 2013.
• Protester awarded costs associated with a supplemental protest
issue on which the agency took corrective action, but not costs
associated with the original protest. Contrack Int’l, Inc.-Costs,
B-401871.3, Feb. 17, 2010, 2010 CPD ¶ 122.
34
Challenging Agency’s Decision to Follow
GAO Recommendation
• Recent cases have placed the Court of Federal Claims (COFC) in
quasi-appellate role
• Turner Const. Co., Inc. v. United States, 645 F.3d 1377 (Fed.
Cir. 2011) – Federal Circuit held that the Agency acts arbitrarily if it
follows a GAO recommendation that is itself irrational.
• CBY Design Builders v. United States, 105 Fed. Cl. 303 (2012)
– Court found that GAO’s treatment of a one issue, whether
offerors were mislead by the Solicitation language, was
problematic and inconsistent, and that GAO’s determination that
offerors were mislead lacked a rational basis. However, the Court
found that GAO’s determination that the Army Corps failed to
properly evaluate the proposal was rational, and therefore rational
for the Agency to follow GAO’s recommendation.
35
Challenging Agency’s Decision to Follow
GAO Recommendation, continued
•Systems Application & Techs., Inc., v. United States, 100 Fed. Cl.
687 (2011) aff'd, 691 F.3d 1374 (Fed. Cir. 2012) – Court ruled that
informal e-mail by GAO decision writing attorney suggesting the
agency take corrective action was irrational because it ignored
GAO’s own timeliness rules and misinterpreted the source
selection memorandum.
• Amazon Web Servs., Inc. v. United States, 113 Fed. Cl. 102,
105 (2013) – Court held GAO recommendation was irrational
because GAO did not consider whether protester was prejudiced
and therefore did not consider whether the protester had standing
to bring its protest.
36
Price Realism at GAO
• Realism and reasonableness are distinct concepts
• The FAR does not use the term, “price realism.”
Instead, FAR § 15.404-1(d)(3) provides for the application
of cost realism principles to fixed-price proposals for the
purpose of assessing performance risk.
• GAO decisions have addressed four general principles
regarding price realism
37
Price Realism Analysis at GAO
-generally not required
(1) If a solicitation does not provide for the evaluation of the realism of
proposed prices, the agency is not required to do so.
• Alamo City Eng’g Servs., Inc., B-409072, B-409072.2, Jan. 16, 2014, 2014
CPD ¶ __; see also Bannum, Inc., B-408838, Dec. 11, 2013, 2013 CPD ¶ 288
(no basis to challenge affirmative determination of responsibility based on low
price)
• CACI-WGI, Inc., B-408520.2, Dec. 16, 2013, 2013 CPD ¶ 293
• Network Innovations, Inc., B-408382, B- 408382.2, Sept. 4, 2013, 2013
CPD ¶ 220
• DynCorp Int’l LLC, B-407762.3, June 7, 2013, 2013 CPD ¶ 160
• PAE Gov. Servs., Inc., B-407818, Mar. 5, 2013, 2013 CPD ¶ 91
38
Price Realism Analysis at GAO
-prohibited if not disclosed
(2) If the solicitation does not provide for the evaluation of the realism
of proposed prices, the agency must not do so
• Triad Int’l Maint. Corp., B-408374, Sept. 5, 2013, 2013 CPD ¶ 208
39
Price Realism Analysis at GAO
-required if soliciation provides
(3) If the solicitation provides for the evaluation of the realism of
proposed prices, the agency must perform an analysis. Even if the
solicitation does not specifically use the term “price realism,” an
analysis is required if the solicitation advises offerors that the agency
will consider whether the proposed price is adequate/too low for the
proposed technical approach.
• Esegur -Empresa de Seguranca, SA, B-407947, B-407947.2, Apr. 26, 2013,
2013 CPD ¶ 109
• Logistics 2020, Inc., B-408543, B-408543.3, Nov. 6, 2013, 2013 CPD ¶ 258
40
Price Realism at GAO
-FAR clause regarding compensation
GAO decisions have noted that FAR § 52.222-46(a) requires agencies
to consider whether proposed professional compensation plans are
realistic.
• Portfolio Mgmt. Solutions, LLC; Competitive Choice, Inc., B-408846,
B-408846.4, Dec. 12, 2013, 2013 CPD ¶ 290
• Apptis Inc., B-403249, B-403249.3, Sept. 30, 2010, 2010 CPD ¶ 237
“The professional compensation proposed will be considered in terms of its impact upon
recruiting and retention, its realism, and its consistency with a total plan for
compensation . . . Offerors are cautioned that lowered compensation for essentially the
same professional work may indicate lack of sound management judgment and lack of
understanding of the requirement . . . Failure to comply with these provisions may
constitute sufficient cause to justify rejection of a proposal.”
FAR § 52.222-46(a).
41
Price Realism Analysis at GAO
-manner/depth of evaluation
(4) If the solicitation provides for the evaluation of the realism of
proposed prices, the agency has discretion as to the depth and
manner of the evaluation.
• Harris IT Servs. Corp., B-408546.2, B-408546.3, Oct. 31, 2013, 2013 CPD
¶ 245
• Networking & Eng’g Techs., Inc., B-405062.4 et al., Sept. 4, 2013, 2013
CPD ¶ 219
• Triad Logistics Servs. Corp., B-407842.2, Apr. 22, 2013, 2013 CPD ¶ 106
• Optex Sys., Inc., B-408591, Oct. 30, 2013, 2013 CPD ¶ 244
42
Agency Perspectives on
Price Realism
• While there is nothing improper about an offeror submitting a below
cost bid for a fixed price contract, does the agency want to deal with:
• Risk of default due to contractor operating at a loss?
• Repeated requests for equitable adjustments / claims?
• Strained relationship with contractor?
• Often used in services contracts as a check on execution risk:
• Has all the equipment been accounted for? Can it really be
obtained at the proposed price?
• Have all the personnel been accounted for? Can they be hired
and retained at the proposed rates?
• Seen less often in supply procurements, but are we buying off the
shelf or a developmental item or system?
43
Price Realism in the CoFC
• The Court of Federal Claims must afford agencies substantial discretion in
price realism evaluations. Alabama Aircraft Indus., Inc. – Birmingham v.
United States, 586 F.3d 1372 (Fed. Cir. 2009)
• The Federal Circuit reversed the Court of Federal Claims, which had
found an agency’s price-realism analysis in a tanker maintenance
procurement arbitrary when it did not expressly address the impact
of the aging tankers.
• “The trial court’s duty was to determine whether the agency’s pricerealism analysis was consistent with the evaluation criteria set forth
in the RFP . . . not to introduce new requirements outside the scope
of the RFP.” Id. at 1375-76 (internal citation omitted).
44
Price Realism in the CoFC, continued
• The Court should not introduce new requirements: “The court’s
attempt to rewrite the RFP . . . went beyond the scope of the court’s
review, and amounted to an impermissible substitution of the court's
judgment for the agency’s with regard to how the contract work
should be designed.” Id.
• The Federal Circuit’s treatment of price realism is consistent with the
general principles underlying an APA review.
45
Price Realism Protest Challenges
• Fewer avenues to attack price realism as compared with cost realism
• Easier standard for Agency to satisfy
• Absent failure to consider, can be difficult to win
• Focus on intersection between low price and lack of technical
understanding / performance risk (see DynCorp Int’l LLC,
B-407762.3, June 7, 2013, 2013 CPD ¶ 160)
46
Waivers of organization
conflicts of interest
Two GAO cases in 2013 involved an agency’s waiver of an OCI late in the
100-day process. In both cases, GAO dismissed the argument based on the
wavier, but said that the protester could subsequently challenge the waiver.
Neither did at GAO.
• SRA Int’l, Inc., B-407709.5, B-407709.6, Dec. 3, 2013, 2013 CPD
¶ 281 (waiver “late” in the process)
• AT&T Gov. Solutions, Inc., B-407720, B-407720.2, Jan. 30, 2013, 2013
CPD ¶ 45 (waiver on day 97)
SRA subsequently challenged the waiver at the Court of Federal Claims. The
court in a published opinion requested that GAO address the waiver issue.
• SRA Int’l, Inc. v. United States, COFC No. 13-969 C, Jan. 14, 2014.
47
OCIs in the CoFC
• The Federal Circuit and Court of Federal Claims afford deference to the
agency’s fact-findings and analyses regarding OCIs.
• Turner Constr. Co., Inc. v. United States, 645 F.3d 1377 (Fed. Cir. 2011)
• GAO disagreed with agency’s conclusion that no unequal access OCI
existed prior to award of a hospital construction contract and
recommended re-procurement. Id. at 1382. The agency followed
the recommendation.
• After the awardee protested, the Court of Federal Claims found
GAO’s decision to be irrational. Id. at 1383.
48
OCIs in the CoFC, continued
• The Court of Federal Claims found, among other things, that GAO
substituted its own judgment for that of the agency, and irrationally
discounted the agency’s post-award investigation. Id.
• The Federal Circuit affirmed, emphasizing the need to defer to the
agency’s OCI decisions.
• “CO enjoys great latitude in handling OCIs.” Id. at 1384.
• “Because the GAO improperly substituted its own judgment for
that of the CO, it was the GAO—not the Court of Federal
Claims—that failed to apply the proper deference in conducting
its review.” Id.
49
OCIs in the CoFC, continued
• Such deference is appropriate because OCI identification and mitigation
plan evaluations are fact-specific inquiries.
• The decisions “require the exercise of considerable discretion.”
Axiom Res. Mgmt. v. United States, 564 F.3d 1374, 1382 (Fed. Cir.
2009).
• “The exercise of common sense, good judgment, and sound
discretion is required in both the decision on whether a significant
potential conflict exists and, if it does, the development of an
appropriate means for resolving it.” FAR 9.505.
50
Eroding Viability of OCI Protests
• In Turner Construction, the Federal Circuit held that post-protest OCI
determinations were entitled to deference and must be considered in a protest
analysis
• It was an open question if and/or how GAO would adapt to Federal
Circuit guidance
• McTech Corp., B-406100, B-406100.2, Feb. 8, 2012, 2012 CPD ¶ 97
•McTech protested agency’s decision to exclude it from competitive range
based on CO’s finding that it had an OCI.
•Some of the evidence, such as a mentor-protégé agreement, used by
the agency to defend the protest and its decision, was not
contemporaneously considered by the contracting officer.
•Citing COFC decision in Turner Constr., GAO finds that Agency can
introduce post-hoc analysis to defend contemporaneous OCI
conclusions.
51
Eroding Viability of OCI Protests,
continued
•AT&T Gov. Solutions, B-407720, B-407720.2, Jan. 30, 2013, 2013 CPD ¶ 45
• After finding during ADR that Agency failed to meaningfully consider
impaired objectivity and unequal access OCIs, and 3 days before 100day deadline, Agency issued OCI waiver and GAO dismissed as
academic without further consideration.
• GAO’s review of OCI waivers is limited to whether it met the technical
requirements set forth in FAR 9.504 (in writing, sets forth the extent of the
conflict, and approved by the agency head or a designee).
• GAO will not review whether the waiver was otherwise appropriate. MCR
Federal, B-401954.2, Aug. 17, 2010, 2010 CPD ¶ 196 (“Where a procurement
decision-such as whether an OCI should be waived-is committed by statute or
regulation to the discretion of agency officials, our Office will not make an
independent determination of the matter.”)
52
OCIs -- But not yet a free pass for the
Government
• NikSoft Sys. Corp., B-406179, Feb. 29, 2012, 2012 CPD ¶ 104
• Agency moves to dismiss for lack of standing on ground that protester has an
OCI problem. GAO rejects argument finding that Agency OCI argument not
based on “hard facts.”
• SRA Int’l, Inc. v. United States, 13-969 C, 2014 WL 171012 (Fed. Cl. Jan. 13, 2014)
• Court has jurisdiction to review waiver of OCIs for task orders, because waiver
is an independent discretionary agency action and therefore FASA does not bar
jurisdiction for adjudicating whether the waiver otherwise violated APA
standards.
53
Timeliness of OCI Protests – Pre- or
Post-Award?
• CRAssociates, Inc. v. United States, 102 Fed. Cl. 698 (2012), aff’d per curiam,
CRAssociates, Inc. v. United States, 475 F.App’x 341 (Fed. Cir. 2012)
• Dismissing as untimely post-award protest that awardee had unequal access
OCI where Agency rejected protesters request during competition to amend
Solicitation to resolve unfair advantage.
• Guident Techs., Inc., B-405112.3, Jun. 4, 2012, 2012 CPD ¶ 166
• Finding impaired objectivity OCI timely and distinguishing CRAssociates on
basis that COFC case challenged fairness of ground rules whereas Guident was
challenging award decision.
54
Other Developments
• Use of “significant issue” timeliness exception at GAO
• Timeliness of protests of ID/IQ task and delivery orders following agencylevel protests at GAO
• Timeliness for supplemental protests at GAO based on protected materials
• Change to GAO Annual Report Requirement – requirement to address most
common bases for sustains
• Filing fees for GAO protests
55
GAO Timeliness Rules
• GAO has strictly-enforced rules for timely filing of protests
• Protests alleging improprieties in a solicitation must be filed before bid
opening or the time set for receipt of initial proposals if the improprieties
were apparent prior to that time. 4 C.F.R. § 21.2(a)(1).
• In all other cases, protests must be filed not later than 10 days after the
protester knew or should have known the basis of protest (whichever is
earlier). 4 C.F.R. § 21.2(a)(2).
56
Timeliness exceptions
• GAO’s regulations provide for exceptions to the timeliness rules
•Exception to the 10-day rule for procurements conducted on the basis of
competitive proposals under which a debriefing is “requested and, when
requested, is required” (that is, a debriefing that is required by law).
4 C.F.R. § 21.2(a)(2).
• Exception for protests filed within 10 days of an agency-level protest
(initial adverse action). 4 C.F.R. § 21.2(a)(3).
• Additional exceptions in the regulations 4 C.F.R. § 21.2(c).
• “issues significant to the procurement system” – very rarely used
• “good cause shown” – not yet used
57
Timeliness exception, continued
A 2012 decision used the “significant issue” exception used to hear an
untimely challenge to the terms of a solicitation:
• Cyberdata Techs., Inc., B-406692, Aug. 8, 2012, 2012 CPD ¶ 230
• Protester argued that an award of a blanket purchase agreement was
improper because the agency did not consider cost or price, as required
by FAR § 8.405-3.
• Although the evaluation terms were set forth in the solicitation, and the
protest was otherwise untimely, GAO heard, and sustained the protest.
• The issue had not previously been considered by GAO, and would likely
be a recurring issue in light of the extensive use of BPAs by the
government.
• GAO did not recommend protest costs.
58
Timeliness exception, continued
A related decision, issued shortly after Cyberdata, found that a protest
involving a similar issue regarding FAR § 8.405-3 presented a “close call,” and
was timely.
• Glotech, Inc., B-406761, B-406761.2, Aug. 21, 2012, 2012 CPD ¶ 248
• The solicitation did not make clear that the agency did not intent to
evaluate price, as required by FAR § 8.405-3.
• GAO sustained the protest, for the reasons set forth in Cyberdata.
59
Timeliness for supplemental protests
based on protected materials
• In most cases, where a protective order is issued, outside counsel “must effectively
stand in the shoes of the client where information is covered by a protective order and
counsel cannot properly obtain the benefit of his or her client’s input.” Motorola
Solutions, Inc., B-409148,B-409148.2, Jan. 28, 2014, 2014 CPD ¶ __.
• In Motorola, GAO held that a supplemental protest was timely, even though it was filed
more than 10 days from the protester’s counsel’s receipt of the information, where:
• counsel diligently pursued the release of material under the protective order
• agency counsel engaged in “dilatory behavior” that delayed the release of
material under the protective order
• the material should have been provided during a debriefing
• the material could not have reasonably formed the basis for a supplemental
protest ground without being first reviewed by the protester, and the supplemental
protest was filed within 10 days of the protester’s receipt
60
Timeliness of Agency-level protests
involving task and delivery orders under
ID/IQ contracts
The Competition in Contracting Act provides as follows (31 U.S.C.
3556):
This subchapter does not give the Comptroller General exclusive
jurisdiction over protests, and nothing contained in this subchapter shall
affect the right of any interested party to file a protest with the contracting
agency or to file an action in the United States Court of Federal Claims.
61
Timeliness of Agency-level protests
involving task and delivery orders,
continued
The Federal Streamlining Acquisition Act of 1994, and the 2008 amendments to
that Act, provide that GAO has exclusive jurisdiction to hear protests of task
and delivery orders under ID/IQ contracts, as follows (10 U.S.C. 2304c):
(e) Protests—
(1) A protest is not authorized in connection with the issuance or proposed
issuance of a task or delivery order except for(A) a protest on the ground that the order increases the scope, period, or
maximum value of the contract under which the order is issued; or
(B) a protest of an order valued in excess of $10,000,000.
(2) Notwithstanding section 3556 of title 31, the Comptroller General of the
United States shall have exclusive jurisdiction of a protest authorized
under paragraph (1)(B)
62
Timeliness of Agency-level protests
involving task and delivery orders,
continued
Where a timely agency level protest is filed, but is
dismissed by the agency as outside its jurisdiction because
it concerns a task or delivery order under an ID/IQ contract,
GAO will consider the protest timely filed if it complies with
4 C.F.R. § 21.2(a)(3).
Logis-Tech, Inc., B-407687, Jan. 24, 2013, 2013 CPD
¶ 41
AT & T Gov. Solutions, Inc., B-407720, B-407720.2,
Jan. 30, 2013, 2013 CPD ¶ 45
63
New Requirement for GAO Annual Reports
Section 867 of the FY 2013 National Defense Authorization Act
contains a new requirement for GAO Annual Reports to Congress to
identify the most common reasons for sustaining a protest:
“The report shall also include a summary of the most prevalent
grounds for sustaining protests during such preceding year.”
64
Three most common areas for
sustained protests
Historically, the three most common reasons, historically, have been:
• Inadequate documentation of the record
• Failure to follow the ground rules of the solicitation
• Unequal treatment (including discussions)
65
Three most common areas for
sustained protests, continued
GAO’s Annual Report to Congress for FY 2013 reported the following:
• “Of the decisions resolved on the merits, our Office sustained 17 percent
of the decisions issued.”
• “It is important to note that a significant number of protests filed with our
Office do not reach a decision on the merits because agencies voluntarily
take corrective action in response to the protest rather than defend the
protest on the merits. Agencies need not, and do not, report any of the
myriad reasons they decide to take voluntary corrective action.”
66
Three most common areas for
sustained protests, continued
The four most common bases for sustains were as follows:
(1) Failure to follow the solicitation evaluation criteria, e.g., Exelis Sys. Corp., B-407111 et al.,
Nov. 13, 2012, 2012 CPD ¶ 340 (finding that the agency’s evaluation of the offerors’
experience was inconsistent with the terms of the solicitation).
(2) Inadequate documentation of the record, e.g., Supreme Foodservice GmbH, B-405400.3
et al., Oct. 11, 2012, 2012 CPD ¶ 292 (finding that the record did not show whether the
agency reasonably evaluated offerors’ past performance in numerous areas, in part
because the agency did not retain an adequate record of its evaluation).
(3) Unequal treatment of offerors, e.g., IAP Work Servs., Inc.; EMCOR Gov. Servs.,
B-407917.2 et al., July 10, 2013, 2013 CPD ¶ 171 (finding that the agency unreasonably
credited only the awardee’s proposal with a strength where the record shows that the
protester proposed a similar strength).
(4) Unreasonable price or cost evaluation, e.g., Esegur-Empresa de Segurança, SA,
B-407947, B-407947.2, Apr. 26, 2013, 2013 CPD ¶ 109 (finding that the agency failed to
evaluate whether the awardee’s low price was realistic, as it was required to do by the
terms of the solicitation).
67
Filing Fees for Bid Protests at GAO
Section 1501 of the Consolidated Appropriations Act for 2014 included
a provision that authorizes GAO to charge a filing fee for bid protests.
• GAO shall create an electronic filing and docketing system.
• GAO may charge a filing fee to support the creation and operation
of the system.
• Details regarding the docketing system and fees are in under
consideration by GAO.
68
Questions?
69
Notice concerning authorship. This presentation was prepared jointly by the
panelists. The presentation reflects the views of the individual panelists, and may not
necessarily reflect those of their respective employers or organizations.
70

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