Bid Protests

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The most common basis to establish timeliness for a Government Accountability Office (GAO) bid protest is found in Section 21.2 of the GAO’s regulations.  Under the regulation, the protester must file the protest “not later than 10 days after the basis of protest is known or should have been known”.

Important Disclaimer:  There are plenty of other events that can trigger the running of a GAO bid protest filing deadline.  Please feel free to reach out to me directly if you need guidance in this area.

In a recent decision, GAO placed a hard emphasis on the “should have known” element of the regulation.  The case involved a protest over the Department of Veterans Affairs’ award of a contract for construction services.  Among other things, the protest alleged that the agency improperly relied on a Small Business Administration (SBA) Certificate of Competency (COC) finding the awardee responsible for the procurement.

On review, GAO dismissed the entire protest as untimely.  Specifically, GAO determined that the clock on the protest started to run when the protester received a letter from the agency stating its award decision (and also indicating reliance on the SBA’s COC).  Because the filing was not made within 10 days of that “should have known date,” the window to protest closed.

Of note, GAO specifically rejected the protester’s argument that its time to file a protest should be expanded based on its lack of knowledge concerning the COC program.  According to the protester, it did not understand the purpose/process of the program and sought clarification from the agency.  Ultimately, it took until several weeks after the agency’s award letter for the protester to gain a sufficient comfort level to file the protest.

The protester’s delay argument failed because the SBA’s COC program is detailed in both the Federal Acquisition Regulation and the SBA’s own regulations – i.e., publicly available sources.  Accordingly, GAO found that there was no basis to extend the applicable 10-day deadline for filing.

For federal contractors contemplating a bid protest at GAO – this case demonstrates that the time for contemplation is very short.  Any information giving rise to knowledge of a potential protest basis must be treated as potential triggering event.  If a stay of award or performance is needed, the time to file could be even shorter (as little as 4 calendar days).

The only option to preserve the important rights vested in the GAO bid protest process is to act fast and stay out in front of these deadlines.

In a recent post, I discussed new legislation that could signal an uptick in Best Value procurements for complex service-based contracts.  In the view of many (including me), more Best Value RFPs is a win/win for both contractors and the government.

As a quick refresher, Best Value procurements utilize a Best Value Tradeoff Analysis, which gives the agency the ability to weigh proposal costs and benefits and award the contract to the offeror that will provide the “best value” to government – even if that comes at a higher price than another acceptable offer.  By contrast, Lowest-Price Technically-Acceptable (LPTA) awards can be challenging on complex service-based contracts, where skilled performance is often not suited to a lean or even shoestring budget.

Contractors bidding on Best Value procurements need to think strategically and be mindful of both price and technical excellence.  Having the lower price or exceeding the RFP requirements – independently or even in tandem – may not be enough.  A recent GAO decision highlights how mastering the interplay of these two factor is the key to sustained Best Value success.

The protest concerns the Department of the Interior’s decision to award an FSS task order to a higher-priced offeror on a Best Value basis.  GAO denied the protest, finding that the agency reasonably documented the relative strengths of the proposals and weighed them against the quoted prices.

Digging deeper into the protest, the protester argued that the agency did not reasonably take into account the qualifications and experience of its proposed personnel – noting that its proposal exceeded the RFP requirements in a variety of ways.  In response, the agency noted that it did, in fact, give the protester credit for its solid experience, including assigning a “high confidence” rating to its past performance proposal.

However, for a Best Value award – meeting or (in this case) even vastly exceeding the RFP requirements in one area is often not enough.  The agency performed a detailed review of the offerors’ strengths and compared them in the context of their respective prices.  Based on this proper tradeoff analysis (according to GAO), the agency found the higher priced offer provided better value to the government and made the award.

GAO’s decision offers an important lesson to government contractors competing Best Value procurements – don’t get complacent!  Unlike LPTA procurements (where the RFP sets the bar), RFP requirements should not be viewed as anything other than the baseline.  Contractors should parse those requirements for areas where it can add value and then highlight all of those betterments in its proposal.

Government contractors usually find themselves appearing before the Government Accountability Office (GAO) on a bid protest for one of two reasons:  (1) you believe that the government erroneously did not award a contract to your business or (2) your business holds a contract award that is challenged by a disappointed offeror.  Either way, there is a contract on the line that likely means a great deal to you (and your business).

In the past, we’ve discussed strategies for filing protests – which includes considering the important question of whether the GAO is the proper venue for the protest.  We’ve also offered practical advice on winning bid protest arguments.

But, should you find yourself on the losing end of a bid protest decision (and at extreme risk of losing that important contract for good), the GAO offers a last resort – the Request for Reconsideration.

GAO Reconsideration is a bit of a misnomer, so it is helpful to first discuss it in terms of what it is not, before turning to what Reconsideration actually entails.

First, Reconsideration is not an appeal.  In fact, there is no true “appeal” at GAO.  While disappointed protesters still have the option of turning to litigation at the Court of Federal Claims, that is a separate and distinct process – a clean slate.

Reconsideration also is not a “do over” or second bite at the apple with the GAO.  Contractors should never hold back an argument at the GAO because it is an extremely streamlined process (100 days from protest to decision).  Arguments that are not well stated the first time cannot be revisited.

So, what is Reconsideration, exactly?

In a nutshell, GAO provides for Reconsideration where the protester can identify specific legal or factual errors in the decision denying the protest.  Repeating or restating the same arguments (and hoping for a different result) will not get it done.  Needless to say, it is a high standard – making for a low probability for success.

In a recent bid protest decision, GAO narrowed the opening for what protesters can argue on Reconsideration even further.

In connection with a Defense Logistics Agency diesel fuel services contract, the protester challenged the agency’s failure to set the procurement aside for performance by service-disabled veteran-owned small businesses.  GAO disagreed and dismissed the protest, concluding that the contracting officer performed reasonable market research.

The contractor sought Reconsideration, but was again denied.  GAO’s decision primarily relies on the most common rationale – the protester did not raise issues of fact or errors of law in the underlying opinion.  Thus, GAO classified the Request for Reconsideration as “mere disagreement” with the protest decision.

Importantly, GAO also rejected the protester’s argument that the agency failed to produce key documents needed to prosecute the protest.  There was, indeed, a dispute during the protest concerning whether certain key documents were protected source selection documents (and therefore not subject to disclosure) – but GAO classified that dispute as a protest matter, not a separate ground for Reconsideration of the decision on the merits.

While this is a post about Requests for Reconsideration at GAO – the takeaway for contractors should be focused more on bid protest procedure.  Reconsideration of an adverse protest decision is possible – but rare.

Contractors should focus on strategy in advance and think about how to frame the best argument (leaving nothing in reserve).  Moreover, if there is a dispute (like the battle for responsive documents in this case), contractors should take affirmative steps to protect their interests before a decision is handed down.  By the time Reconsideration rolls around, its likely too late.

 

We often discuss the need for government contractors to Read and React when responding to a solicitation:  (1) Read the RFP and understand all of the requirements and limitations and (2) React to the RFP’s evaluation scheme by playing the appropriate strengths and minimizing weaknesses.  And sometimes, the best reaction is knowing the value of beefing up your proposal in the right areas — even when it will increase your overall price.

The best example when it comes to shifting proposal strategies is Lowest Price Technically Acceptable (LPTA) vs. Best Value.

The goal on an LPTA procurement is to achieve technically acceptability while keeping price as lean as possible.  On the other hand, when responding to a Best Value procurement, the game changes dramatically.  The Agency is looking at the intersection of technical competency and price in order to maximize the benefit to the government.  The award can go to even the highest priced offeror – provided that the higher price can be justified through additional benefits to the agency.

A recent GAO decision highlights the tightrope that government contractors must walk when responding to RFPs.

The protest concerns the National Institutes of Health’s award of a contract for event management and video production services.  The RFP called for award on a Best Value basis, considering the following three factors:  (1) technical, (2) price, and (3) past performance.

The protest challenged the agency’s decision that the unsuccessful offeror’s proposal created a “potential risk” based on its option year pricing.  Specifically, the agency concluded that the offeror’s decision to decline any increases in option year pricing jeopardized the company’s ability to retain qualified personnel on the job (because, presumably, those employees would not be in line for compensation increases year over year).

The protester disagreed and presented some compelling facts to support its position.  The protester argued that it maintains a robust employee retention program and cited statistics regarding its favorable retention record.  Moreover, the protester noted that its competitive compensation plan undercuts the agency’s concerns.

The agency chalked all of this information up as “mere disagreement” with the agency’s reasonable concerns and dismissed the protest.

There was nothing “wrong” or non-responsive about the offeror’s proposal.  But with Best Value evaluations, the agency has the ability to dig into the numbers and uncover what it believes is the most advantageous offer.  In this case, the agency determined it was worth the extra bump in option year pricing to ensure employee retention.  That kind of value judgment (when properly documented by the agency) is difficult to overcome as part of a bid protest.

The key for contractors responding to a Best Value RFP is to anticipate what is important to the agency and reinforce your business’s unique ability to satisfy those needs — even if it means a higher overall price.

Government contractors know the odds on GAO bid protests – are they are not all that good.  Even with a noticeable uptick, the statistics reveal that less than 1/4 (about 23%) of all bid protests were sustained in FY 16.  Even factoring in voluntary agency corrective action, the odds of a positive outcome are still worse than a coin flip (about 46%).

So, the question is how can you make those odds work for your business?

First, pick the right battle.  As I discuss in The Practical Guide to Filing (and Winning) GAO Bid Protests, certain kinds of cases tend to fare better at the GAO.  These cases include pre-bid solicitation errors and obvious evaluation missteps by the government.  More nuanced issues – or cases requiring in depth legal analysis – are better suited to the Court of Federal Claims (COFC).

The difference largely lies in the mission of each venue.  The GAO’s trademark is speed and efficiency.  A contractor can obtain a mandatory stay of contract award or performance just based on filing a timely protest – so the GAO’s stated goal is to resolve all protests within 100 days of filing.  Protest administration at the COFC, on the other hand, is more akin to traditional litigation.

Each venue offers pros and cons that can vary on a case-by-case basis.  So, contractors should certainly think before mechanically filing a protest (because “that’s what we always do”).

The other way to beat the odds at GAO is to avoid common contractor pitfalls.  Even though some areas of procurement administration seem (and probably are) inequitable – that does not necessarily mean they will support a protest.

For example, in a recent decision, GAO rejected a contractor’s protest related to its adjectival ratings.  The contractor argued that the agency conducted an improper best-value tradeoff analysis where two offerors received identical adjectival ratings – but the agency still elected to award to the higher-priced offeror.

GAO disagreed, finding that the contractor’s arguments focused too narrowly on the assigned ratings.  The record showed that, within those ratings, the agency conducted a proper tradeoff analysis, including documenting the technical merits of the proposals against their respective offered prices.  In the end, the agency determined that the technical benefits of the awardee’s proposal warranted the government paying the premium price.

The lesson for contractors is not to rely too heavily on adjectival ratings.  Particularly when it comes to best value procurements, the government has significant discretion to put a finer point on proposals with the same overall rating.

When this situation arises, contractors are well-served to thoroughly explore the agency’s best value decision during the required post-award debriefing.  If the debriefing reveals holes in the analysis, then a protest could be worth the time and effort.  On the other hand, if the best value decision is properly documented, a protest based only on adjectival ratings is likely not worth the investment.

This is not a unique story – but there is still a lesson for Federal contractors to learn.

A recent GAO decision considered an electronic proposal submitted by email just prior to the 4:00 p.m. deadline.  Although the contractor beat the clock, the proposal did not arrive in the contracting officer’s electronic mailbox until about two hours later – after the deadline.

The Federal Acquisition Regulation (FAR) takes a hardline (but easy to follow) position on untimely proposal submissions.  Late is Late.  With some very limited exceptions, proposals received in the designated government office after the exact time specified are late and will not be considered.

The contractor’s argument to GAO is a familiar one – surely, a contractor that hits “send” on an electronic proposal can rely on that transmission.  After all, the proposal is out of its hands and there was no indication of an error or electronic bounce-back.  Not so, says GAO.

After a lengthy back and forth between the contractor and the government over whose system was responsible for the delivery delay, the GAO ruled that it does not matter.  The FAR places the burden on the contractor to ensure that the electronic proposal has sufficient time to make its way through any filters or email traffic.  Specifically, FAR 15.208(a)(1) provides that a late proposal can still be timely if it is “transmitted through an electronic commerce method authorized by the solicitation,” and “received at the initial point of entry to the Government infrastructure” not later than 5:00 p.m. one working day prior to the deadline for the receipt of proposals.

In other words, if you electronically submit your proposal one day early, you can get off the hook if a government transmission problem delays its arrival in the contracting officer’s mailbox.

While it may seem one-sided to shift the burden for a successful transmission away from the government, that is nothing new for experienced government contractors.  In fact, in this case, it may even provide a benefit.

I am a longtime advocate of contractors submitting proposals a day early.  It solves lots of last minute logistical problems.  While we see many “late is late” problems for contractors that submit proposals at the 11th hour, I have yet to see a case where a contractor was unable to resolve a transmission problem over the course of 24 hours.

It is not always realistic, but getting your proposal teed up a day early is worth the effort.

A response to an RFP is the government contractor’s chance to put its best foot forward and stand out from the crowd.  Particularly when it comes to best value procurements, this is your chance to tell the contracting officer that your company does it best (whatever it is).

But, a recent bid protest decision reminds us that contractors must carefully walk the line between well-deserved boasting and playing make-believe.

The protest concerns a U.S. Department of the Navy IDIQ contract.  The RFP required contractors to submit detailed information documenting their relevant depth and breadth of experience on similar contracts.  In other words, the agency wanted the ultimate awardee to prove it has the chops to do the work required under the contract.

The agency rejected one contractor’s proposal as technically unacceptable because it lacked specific details concerning prior projects.  Instead, the contractor submitted only general information about its past work – and instead focused on hypothesizing about the stellar work that it could perform, if given the opportunity.

On review, the Court of Federal Claims sided with the Navy.  It is reasonable, the Court concluded, for an agency to require contractors to submit satisfactory evidence of qualifying past performance experience.  The contractor’s decision to submit general (not specific) information concerning its prior contract performance and focus on hypothetical statements of future potential did not meet the RFP’s requirements.

For contractors – and especially greener contractors – the Court’s decision presents and chicken-and-egg scenario.  It is difficult to win a contract award including a past performance element when your firm has limited experience.  But how can you get the experience without the award?

Two thoughts:  First, as this case demonstrates, this is one area where you can’t “fake it till you make it.”  Focus on actual, supportable experience.  Second, if your firm’s past performance is really holding you back, consider teaming options for situations where the RFP allows you to lean on the past performance experience of a partner or subcontractor.

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.

The Takeaway

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.

Government contractors responding to RFPs understand the need to read the fine print.

Mostly commonly, we discuss this topic in terms of pure proposal acceptability.  Protest decisions from the GAO and Court of Federal Claims make it abundantly clear that the burden falls on the contractor to follow directions and include all of the required information in all of the right places.  It is for that reason (among others) that we always recommend having an outsider (be it a consultant, a lawyer, or even just another person from your company not involved in preparing the proposal) do a quality check before a proposal is submitted.

A more nuanced issue – but just as important – is understanding the RFP’s evaluation scheme.  That is, not only what information must be submitted, but how that information will be weighed and measured by the Agency.

For example, in the past, we’ve looked at low-price technically acceptable (LPTA) RFPs.  The basic idea on an LPTA procurement is that a contractor need only achieve a minimum passing score on its technical proposal – the Agency will not give bonus points for added bells and whistles.  The much more important part of an LPTA proposal is price. Among those offerors found to be technically acceptable, the award goes to the offeror with the lowest submitted price.  So, the focus on an LPTA proposal should be on getting lean (while maintaining technical acceptability) so that you can get as low as possible (or practical) on price.

But what about Best Value RFPs?  There, the game changes dramatically.  The Agency is not looking just at technical ability or price – but how the two interact in order to maximize the benefit to the government. The award may be made to a higher-priced offeror, but only if that higher price is justified by a proper tradeoff analysis.  Stated differently, is the contractor’s higher price justified by greater technical skill?

Here is a nice, short summary from a recent GAO decision outlining government’s rights and responsibilities under a Best Value RFP:

[Agencies] have discretion to make award to a concern that has submitted a higher-priced, technically superior offer.  An agency’s decision is governed only by the test of rationality and consistency with the solicitation’s stated evaluation criteria.  Source selection decisions must be documented, and must include the rationale for any business judgments and tradeoffs made or relied upon by the source selection authority, but there is no need for extensive documentation of every consideration factored into a tradeoff decision.  Rather, the documentation need only be sufficient to establish that the agency was aware of the relative merits and costs of the competing proposals and that the source selection was reasonably based.

So, what is the BEST approach for Best Value competitions?

Maximize Technical Skill.  Unlike LPTA (where the proverbial C- or D+ proposal could get the award), the key is to go for the A+.  Play to your strengths and show the Agency that your firm is not only capable – but highly skilled and able to deliver the best service.

In maximizing technical skill, you’ll look to add those bells and whistles that show off your firm’s capabilities.  But remember, this isn’t just a talent show.

Keep Price in Mind.  This is where things start to get tricky.  While you’ll want to maximize technical skill and performance, price must always be a touchstone.  In order to accept a higher price, the Agency must be able to document (as part of its Best Value Tradeoff Analysis) that the higher price is justified by demonstrated technical superiority.

The Best Value combination of technical aptitude and price is particularly important for contracts involving complex, multi-disciplinary services because it gives the government the option of accepting a higher price in exchange for better odds of successful future performance.  But what if the Agency gets the formula wrong?  Fortunately, the GAO and Court of Federal Claims have recognized a number of avenues for challenging the Agency’s Best Value Trade Off.

Protesting Best Value Awards.  Bid protests of Best Value award decisions generally fall into one of two buckets: (1) The Agency overvalued the technical aspects of the awardee’s proposal (when a lower-priced offeror that believes that it is on par with the technical skill of the offeror) or (2) The Agency failed to recognize the technical superiority of a proposal (when a higher-priced offeror loses out to a lower-priced and allegedly less skilled awardee).

When properly supported, these allegations will put the Agency’s Best Value Tradeoff Decision under the microscope and open the door for the more skilled and/or lower-priced protester to make its case.

Bid protests concerning proposal interpretation present an uphill battle for federal contractors.  Both the Government Accountability Office and the Court of Federal Claims take the expansive view that the contractor is responsible for the content of its proposal — and that it is not the agency’s role to play detective or dig through a proposal to piece together responsive information.

For example, a few months ago, we looked a case where the protester’s proposal was rejected for failing to include certain required technical details.  The protester, however, argued that the details were included – just not in the section of the proposal specified by the RFP.  The GAO rejected the argument, finding that it is unreasonable to expect the agency to hunt for important details.

Today, we’re looking at a similar case, but with an important twist.  An RFP from the Department of Homeland Security directed offerors to submit sample past performance projects detailing their technical capabilities in a number of areas.   In response, one offeror mistakenly submitted a duplicate project, resulting in a failure to submit a relevant project in each area required by the RFP.  The agency assigned a material deficiency to the proposal and it was not selected for the award.

As part of its protest, the contractor argued that at least some of the blame for the duplicate submission lies with the agency’s website.  However, absent proof of a technical glitch on the part of the agency, the GAO rejected the argument.

In denying the protest, the GAO included some telling commentary that should serve as a warning for contractors submitting proposals electronically.  For example, GAO noted that the agency specifically warned contractors that heavy website traffic close to the due date for proposals could cause server lag time – so contractors should not wait until the last minute the submit.   GAO also anecdotally noted that the protestor was the only contractor – out of over 150 offerors – to encounter an alleged website problem that materially affected a proposal.

Contractors should take not only the decision – but also GAO’s additional commentary – seriously:

  1.  Follow the RFP.  Whether it’s your first proposal, or your one hundred and first, it always pays to refer back to the RFP.  Contractors should not make assumptions about what content to include in the proposal – or where to include it.
  2. When Submitting a Proposal, there are No Second Chances.  Take the time to get it right the first time.  This should include having a fresh set of eyes – or even an outside attorney or consultant – review a proposal prior to submission.  This double-check is the best method to catch overlooked errors or omissions.
  3. Set the Alarm a Day Early.  Whatever the deadline for submitting proposals, make it a practice to be ready to go a day early (or even earlier, if you can).  It’s not always easy, but having your proposal in the can before the deadline will eliminate the kind of uploading or website errors discussed in this post.

By following these rules, you’ll maximize your odds of winning the contract each time you submit a proposal.