Chapter 5 PROTESTS

Contractor protests may occur at any time during source selection. For this reason, and because protests will be referred to in later chapters, the subject is being addressed early in this book.

EXTRAORDINARY CONTRACTOR RIGHTS

Among the extraordinary rights of the sellers in government contracting is a contractor’s right to protest the actions of the government in the source selection process. As you will see, this can sometimes result in great delay and expense to the government.

THE STAY PROVISIONS

The Competition in Contracting Act (CICA) generally requires that any award be delayed until the protest is resolved whenever a protest is filed with the Government Accountability Office (GAO) prior to award of a contract. If award has already been made and a timely protest is lodged, then some sort of stop work order is issued until some resolution is reached. These provisions of CICA are known as the stay provisions or stay rules. The FAR invokes similar stay rules for protests made to the procuring agency.

OVERRIDE PROCEDURES

If an offeror has submitted a timely protest to the GAO in order to get a protest opinion from the head of the GAO, called the comptroller general (informally, “Comp Gen”), the government may proceed with award (or continue performance if contract award has already been made) only in cases of documented urgency and approval of the head of the contracting activity. Some other designated approval level is required if the protest has been submitted only to the agency.

For most protests, a documentation of urgency is not developed approval is not sought and the stay provisions prevail. If a government agency does, however, decide to use the urgency override procedure, the protester has the right to challenge the override in the Court of Federal Claims.

DEFINITION OF A PROTEST

FAR 33.101 defines a protest as a written objection by an interested party to any of the following:

• A solicitation or other request by an agency for offers for a contract for the procurement of property or services

• Cancellation of the solicitation or other request

• Award or proposed award of a contract

• A termination or cancellation of an award of a contract when it is alleged that the termination or cancellation is based in whole or part on improprieties concerning the award of the contract.

There are two basic types of protests:

1. A preaward protest made before a contract is awarded

2. A postaward protest made after a contract has been awarded.

The protest coverage in FAR Part 33 is extensive and includes instructions to contractors for submitting protests and guidance for the government on handling protests.

WHAT IS AN INTERESTED PARTY?

An interested party is an actual or prospective offeror whose direct economic interest would be affected by award of a contract or failure to award a contract. When a competing contractor protests, the protestor must show that, except for the agency’s actions, it would have had a substantial chance to receive the award. If that is not the case, no harm was done to the protester as a result of government action, and the comptroller general will normally not address the issue raised in the protest. This has been characterized by some in the business as the “no harm, no foul” rule.

An interested party may file a protest with

• The agency conducting the acquisition

• The GAO (comptroller general)

• The Court of Federal Claims.

Because of time limitations, expense, and other considerations, the overwhelming majority of protests are filed with the agency or with the GAO.

MATTERS ADDRESSED IN PROTESTS

Preaward protests may challenge solicitation provisions (including evaluation factors or their relative importance), any government-imposed limitations on competition, or any other matters where an offeror believes that the government is acting in violation of law, regulation, or basic issues of fairness.

Postaward protests often address alleged erroneous or biased proposal evaluations, government failure to act in accordance with the provisions of the solicitation, government failure to hold meaningful discussions, unequal treatment of offerors, and other such matters.

TIMELINESS

In addition to meeting the interested party criteria, protests generally must be filed before the closing date established for receipt of proposals if a protest concerning solicitation provisions is to be considered. If a postaward protest is to be made, then the protest should be filed within ten days of the time the protested issue was known or should have been known. For example, if the issue is not discovered until a debriefing, then the contractor has ten days from the debriefing to file a protest. However, to invoke the CICA stay provisions, a competing contractor must file a protest that is based on information discovered at a debriefing within five days after the debriefing was held or was offered to be held.

WHEN INTERESTED PARTY OR TIMELINESS STANDARDS ARE NOT MET

If a protester does not meet either or both of the interested party and timely submission criteria, it is likely that the issue being protested will not be considered. However, although relatively rare, occasions do arise when the comptroller general will consider and publish an opinion on the merits of protests that did not meet these standards. In the past these occasions have been limited to instances where the comptroller general felt that the issue involved was “significant to the procurement system” or was “of widespread interest to the procurement community” or both. In other words, the comptroller general felt that it would benefit the acquisition process if case law (i.e., precedent) were to be established for the issue or issues involved.

COMPTROLLER GENERAL DECISION TIMES

The comptroller general normally has 100 days from the date a protest was filed to issue a decision. If the protestor elects, an expedited consideration of the issue may be made under an express option. A decision is normally issued under this option within 65 days.

AGENCY RESPONSIBILITIES

The FAR suggests that agencies avoid protests by making their best efforts to resolve concerns raised by an interested party at the contracting officer level through open and frank discussions. Protests are expensive and time consuming, and they can have significant adverse impact on the orderly progression of government programs. Obviously, every reasonable effort should be made to avoid their occurrence.

FAR 33.103 advises that, if a protest is made to the agency, the agency “should provide for inexpensive, informal, procedurally simple, and expeditious resolution of protests.” And it advises that alternative dispute resolution (ADR) techniques, involvement of neutral third parties, and use of another agency’s personnel may be appropriate. Many agencies have adopted and successfully used ADR procedures for protests.

IMPACT OF PROTESTS

To understand the impact protests can have on government operations, consider the following actual sequence of events involving a solicitation for proposals to operate a publications clearinghouse:

1.   The source selection was to be based on technical acceptability, past performance, and cost.

2.   Two of the contenders for this competitive small business set-aside were firms named Logistics Applications Inc. (LAI) and Biospherics Incorporated.

3.   A review panel reviewed each proposal for acceptability. LAI was found technically unacceptable, and Biospherics was awarded the contract.

4.   LAI protested that the review panel was likely biased since two of the six members of the panel were former employees of Biospherics.

5.   The agency convened a new panel and, since corrective action had been taken, the comptroller general dismissed the LAI protest as academic.

6.   The new panel considered both firms to be acceptable, and both were included in the competitive range.

7.   Discussions were held and final revised proposals were received.

8.   LAI was given the award.

9.   Biospherics then submitted a protest to the GAO contending that its proposal should have been found technically superior.

10.  In reviewing the agency documentation, the comptroller general found that “the record is devoid of any documentation of the agency’s evaluation of final revised proposals…. In the absence of such documentation, we are unable to determine the reasonableness of the agency’s evaluation upon which the selection of LAI for award was made.”

11.  The comptroller general made the following recommendations:

　a. Reevaluation of proposals and a new selection decision.

　b. If after reevaluation the agency believes further discussions are warranted, it may reopen discussions and request another round of revised proposals.

　c. If the agency determines that LAI is no longer in line for award, the agency should terminate the award to LAI and make another award.

　d. Biospherics should be reimbursed for its cost of filing and pursuing the protest, including reasonable attorneys’ fees.

At the time the comptroller general opinion was issued, 480 days had already elapsed since the solicitation was first issued, and the source selection process was still far from complete. In addition to the delays, the government had incurred significant expenses, including costs associated with defending against the protest, costs that were reimbursed to the protester, and, potentially, costs associated with contract termination.

Unfortunately, this is not a worst-case scenario. There have been many sustained protests where delay and monetary consequences were far more severe. We chose this example because, in retrospect, it appears that the issues involved were clear-cut and the problems probably could have been avoided.

ATTORNEY FEES AND BID AND PROPOSAL COSTS

Government payment of protestor attorney fees and government payment of protestor bid and proposal costs are often in order. In some cases, these are substantial. For example, in Alabama Aircraft Industries Inc.-Birmingham, No. 08-470C, reissued February 3, 2009, the Court of Federal Claims found that the protestor was entitled to $1,003,288.23 in bid and proposal costs. And the comptroller general found that attorney fees of $475.00 per hour (for 324.15 hours) were reasonable in CourtSmart Digital Systems Inc., B-292995.7, March 18, 2005.