Winning bid protests all share one common theme – the government erred somewhere in the procurement process and the contractor was unfairly prejudiced as a result. It is then up to the contractor to expend the time, effort, and resources necessary just to return to the status quo of basic fairness.
Fortunately for contractors, the burden of pursuing a meritorious protest can (sometimes) be lifted.
By law, the GAO has authority to recommend the reimbursement of protest costs (including attorneys’ fees) when it determines that the agency’s actions violated a procurement statute or regulation. This type of recommendation is most commonly seen when the agency (unsuccessfully) contests a contractor’s protest all the way to a GAO final decision.
The GAO can also make a recommendation for the agency to reimburse protest costs even when the agency elects to take corrective action prior to a final decision. However, in order to do so, the GAO must find that the agency “unduly delayed” taking action in response to a “clearly meritorious” protest (thus causing the contractor to expend unnecessary time and resources).
Two recent GAO decisions – one granting costs and the other denying costs – help to shed more light on vague standards like undue delay and clearly meritorious.
In the first decision, the GAO recommended the reimbursement of protests costs by the Air Force in connection with a protest over multiple award construction contracts. The protest challenged the contract awards, arguing that the agency waived solicitation requirements for certain contractors, but not others (a classic “unequal treatment” argument).
The agency did not take corrective action in response to the protest – instead electing to submit an agency report. After it became apparently that the agency’s own materials actually bolstered the protester’s claim of disparate treatment among offerors, the agency finally decided to take corrective action by canceling the solicitation and terminating the awards.
Following corrective action, the contractor requested reimbursement of its protest costs and GAO agreed. Specifically, GAO found the protest allegations concerning unequal treatment “clearly meritorious” – noting that the plain language of the RFP and the protest allegations should have alerted the agency to the problem. In short, GAO determined that the Agency’s position, from the outset, was “not legally defensible.”
On the flipside, the second GAO decision denied a claim for costs where it determined that the agency offered a reasonable rebuttal to the protest allegations.
The decision arises out of a protest over a DLA health support services contract. The protester argued that the agency should have found the LPTA awardee technically unacceptable due to alleged proposal defects. The protester also later filed a supplemental protest arguing that the agency engaged in misleading discussions during the evaluation period, relied on information from outside offerors’ proposals, and changed RFP requirements after proposals were submitted.
Following receipt of the protester’s supplement, the agency elected to take corrective action. The protester promptly requested reimbursement of its fees – but this time, GAO denied the request.
If both of the cases under review ended with corrective action, why did the GAO recommend reimbursement in only one?
The key lies in the timing of the second case. The GAO concluded that the agency had a reasonable rebuttal to the grounds raised in the initial protest. However, when the protester filed its supplement, the agency dropped the challenge and promptly took corrective action. The GAO therefore concluded that there was no undue delay in response to the clearly meritorious (supplemental) protest.
Bid protests are all about the cost-benefit analysis. The opportunity to claim what rightfully should have been a lucrative contract award is usually enough to justify the expenditure of time and resources. However, when the government ignores its own procurement errors and forces a contractor through unnecessary paces, it is good to know that there is a way to claw back those costs.