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Current Trends in Federal Bid Protests
National 8(a) Association MeetingOctober 30, 2013
Rick Oehler Lee Curtis
2
Perkins Coie
Offices: 19 across the United States and China, including Anchorage, Seattle and D.C.
Perkins has represented ANCs for well over 30 years
Perkins has a strong Government Contracts practice
web based resources for government contractors http://www.perkinscoie.com/government_contracts/
3
Current Trends In Federal Bid Protests
Part I Overview Debriefings
Part II Small Business Issues
Part III Alternative Forums Standing and Typical Bid Protest Issues
44
GAO: Cases Filed
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY120
500
1000
1500
2000
2500
1,356 1,326 1,411
1,652
1,989
2,299 2,3532,475
Cases Filed-9% -2% +6%
+17%
+20%
+16%+2%
+5%
5
Bid Protests – Overview
CHARACTERISTICS OF FEDERALPROCUREMENT PROCESS Generally competitively awarded Governed by numerous statutes and regulations Government officials are required to comply with
those statutes and regulations, but also have significant discretion
6
Bid Protests – Overview
WHAT IS A BID PROTEST? A formal complaint against some aspect of a
federal procurement process which asserts either A violation of law; or A decision that lacks any rational basis
7
Bid Protests – Overview
VIOLATION OF LAW Generally only federal procurement law Statutes (like Competition in Contracting Act or
Procurement Integrity Act) Regulations (like FAR, DFARS or SBA
regulations)
8
Bid Protests – Overview
DECISION LACKING A RATIONAL BASIS? A decision or action that lacks any logical support at
all A decision based on materially mistaken or
erroneous facts A decision contrary to the solicitation A decision based on improper motives
9
Bid Protests – Overview
PROTESTS CAN BE MADE AT MANYDIFFERENT POINTS IN THE PROCESS Prior to the solicitation
(example: synopsis of sole-source contract)
After solicitation, but prior to award(example: solicitation with objectionable terms)
After award (disappointed offeror)
10
Bid Protests – Overview
REALITY NO. 1 – A FORMAL PROTEST IS NOTTHE PREFERRED APPROACH TO MOSTISSUES
This is business and the government procuring agency is your customer
The customer may not always be right, but good relations must be maintained
Evaluate if there are alternative ways to be persuasive
11
Bid Protests – Overview
ALTERNATIVE – Letter to Contracting Officer Lowest cost, but may not get review beyond CO's team;
may result in review by agency counsel Still need to identify a legally and factually sound basis
for change in agency course Prior to agency protest, all parties shall attempt to
resolve "concerns" at the CO level. FAR 33.103(b) Responses to notice of proposed sole-source award Pre-solicitation and post-solicitation conferences Q & A process regarding solicitations Take advantage of opportunities to address inappropriate
restrictions and evaluation schemes
12
Bid Protests – Overview
REALITY NO. 2 – SOMETIMES A FORMALPROTEST IS THE ONLY WAY TO PROTECTYOUR INTERESTS
When competition is not being permitted When the Government fails to follow the RFP
rules When a new perspective will help ensure a fair
result When a final decision is dead wrong
13
Bid Protests – Overview
REALITY NO. 3 – TO MAKE INTELLIGENTDECISIONS ABOUT WHETHER TO FILE APROTEST, YOU HAVE TO KNOW –
Federal procurement process rules Bid protest process rules Deadlines are VERY TIGHT! Your own objectives in filing a protest
14
Bid Protests – Overview
OBJECTIVES IN FILING A PROTEST Gaining an opportunity to compete at all Gaining an opportunity to compete on a level
playing field Gaining an opportunity for a second look in an
evaluation Sending a message to shape a procuring
agency's future actions
15
Bid Protests – Overview
DECISION TO ESCALATE TO PROTEST May be forced by timing
Action against non-competitive process Action against overly restrictive RFP terms Action against perceived violation of Procurement
Integrity Act
16
Bid Protests – Debriefings
WHAT ARE DEBRIEFINGS? Informative exchanges required by regulation
after exclusion or contract award (FAR 15.505 and 15.506) Can be face-to-face meeting, telephonic
conference or in writing
17
Bid Protests – Debriefings
WHO IS ENTITLED? Offerors excluded from a competitive range All offerors after an award selection is made Mandatory only for FAR Part 15 procurements
Not necessarily required for formally advertised (Part 14) or simplified acquisitions
18
Bid Protests – Debriefings
WHAT IS A DEBRIEFING AND HOW CAN YOU USE IT? To help make an informed and intelligent decisions
regarding whether to protest To help obtain information to use in pursuing a
successful protest To obtain additional insights for future competitions To help position you (as successful contract
awardee) to defend against a protest
19
Bid Protests – Debriefings
PRE-AWARD DEBRIEFINGS Offered to offerors excluded from
competitive range or otherwise excluded (FAR 15.505)
Make a written request within 3 days of notice
Government to debrief "as soon as practicable" - compelling circumstances can delay until after award
20
Bid Protests – Debriefings
PRE-AWARD DEBRIEFINGS At a minimum pre-award debriefing includes:
Agency evaluation of significant elements of proposal
Summary of rationale for exclusion Reasonable responses to relevant questions about
compliance with procedures and regulations Other information may be requested Certain types of information will not be disclosed
21
Bid Protests – Debriefings
POST-AWARD DEBRIEFINGS (FAR 15.506) Offered to offerors after contract award Make a written request within 3 days of notice "To maximum practicable extent" held within 5
days of written request Government can accommodate an untimely
request for a debriefing
22
Bid Protests – Debriefings
POST-AWARD DEBRIEFINGS (con't) At a minimum, includes
Government's evaluation of requestor's weaknesses and deficiencies
Overall evaluated cost or price and technical rating of the awardee and the debriefed offeror
Past performance of debriefed offeror Make and model of successful offeror Overall rankings of offerors Summary of rationale for award Reasonable responses regarding procedures
23
Bid Protests – Debriefings
GOVERNMENT IS NOT TO DISCLOSE Point by point comparisons Trade secrets or confidential
processes/techniques Confidential commercial or financial
information Names of references providing past
performance information
24
Bid Protests – Debriefings
EFFECTIVE DEBRIEFING TECHNIQUES Be fully prepared (evaluation criteria, process,
focus areas) Listen closely and read between lines Ask follow-up questions Agree in advance on how far to push Possibly caucus to evaluate how to proceed Agree to accept additional information Face-to-face is preferred if possible
25
Bid Protests – Debriefings
DEBRIEFINGS OF THE AWARDEE Authorized by regulation Potentially useful to –
learn how to improve proposal/ratings help defend against a protest
26
Bid Protests – Debriefings
TIGHT GAO PROTEST TIMELINES Lee will discuss the timeline to file a
protest at GAO after a debriefing However, the timelines are tight GAO enforces timelines strictly
27
Bid Protests – Small Business
Types covered: Size Protests Affiliation/Ostensible Subcontractor
Area Office Determinations and OHA Appeals
28
SIZE PROTEST
The SBA Area Director for Government Contracting (or designee) will notify the following that protest received: CO Protested concern Protestor
If HUBZone, then AA/HUB will be notified If SDB, the AA/8(a) BD will be notified SBA has 10 working days (if possible) to make a
formal size determination
29
The Size determination will be based on the evidence presented in the protest, but the SBA may use outside information
SBA will give greater weight to supported factual information than unsupported allegations
SIZE PROTEST (cont'd)
30
Bid Protests – Small Business
Response The concern whose size is at issue must complete SBA Form
355 within 3 working days from the date of receipt from SBA If the concern fails to respond, SBA may presume that the
concern is other than a small business A concern whose size status is at issue must furnish
information about its alleged affiliates to SBA, despite any third party claims of privacy or confidentiality, because SBA will not disclose information obtained in the course of a size determination except as permitted by Federal law
The concern whose size is under consideration has the burden of establishing its small business size
31
Bid Protests – Small Business
Time limits Non-negotiated procurements: 5 days after bid or
proposal opening Negotiated procurements: 5 days after the CO
has notified the protestor of the identity of the prospective awardee
Electronic notification of award: 5 days after the electronic posting
Multiple award schedule: any time prior to the expiration of the contract period (including renewals)
32
Bid Protests – Small Business
Affiliation Concerns and entities are "affiliates" of each other
when one controls or has the power to control the other. 13 CFR § 121.103(a)(1).
SBA considers factors such as ownership, management, previous relationships with or ties to another concern, and contractual relationships. 13 CFR § 121.103(a)(2).
33
Affiliation
Determined under 13 CFR 121 and 134 Factors weighed:
Identity of Interest Common Management Totality of Circumstances: SBA will
consider the totality of the circumstances, and may find affiliation even though no single factor is sufficient to constitute affiliation. 13 CFR 121.103(a)(5).
34
Ostensible Subcontractor Rule13 CFR 121.103
A contractor and its ostensible subcontractor are treated as joint venturers, and therefore affiliates, for size determination purposes
An ostensible subcontractor is a subcontractor that performs primary and vital requirements of a contract, or of an order under a multiple award contract, or a subcontractor upon which the prime contractor is unusually reliant
35
Ostensible Subcontractor Rule13 CFR 121.103
All aspects of the relationship are considered "Team" experience Intent: prevent other than small firms from
circumventing the size regulations. Appeals are intensively fact specific
Relate to specific requirements of each solicitation
36
Area Office Determination/OHA
If an Area Office determines affiliation/ostensible subcontractor rule was violated, person losing that decision "appellant" may appeal the ruling to OHA.
Appeals are intensively fact specific because they are based upon the specific requirements of each solicitation. "All aspects of the relationship" must be evaluated. 13 CFR 121.103.
37
Affiliation: OHA Appeal
Appellant has the burden of proving by a preponderance of the evidence (more likely than not) all elements of the appeal.
Appellant must prove the Size Determination is based on a clear error of fact or law. 13 CFR 134.314.
This is not de novo review, but based on the record established.
38
Bid Protests – Alternatives
PROTESTS CAN BE PURSUED WITH – Contracting Officer Procuring Agency Government Accountability Office (GAO) Court of Federal Claims (CFC)
39
InterestedParties
InterestedParties
AgencyAgency
GAOGAO
Court ofFederalClaims
Court ofFederalClaims
Court of Appealsfor Fed Circuit
Court of Appealsfor Fed Circuit
Bid Protests – Alternative Forums
40
Bid Protests – Alternatives
PROCURING AGENCY (FAR 33.103) Interested party may request an independent
review by procurement professionals at levels above the CO
Some agencies take more seriously than others Can be most effective on pre-award issues (overly
restrictive; exclusions; PIA) Unusual to gain satisfaction in post-award
protests Quick resolution; decision encouraged in 35 days
41
Bid Protests – Alternatives
PROCURING AGENCY FILINGDEADLINESSame as GAO – discussed laterCheck individual agency rules
42
Bid Protests – Alternatives
GAO Provides true outside expertise (80+ years) Automatic stay with a timely protest filing Substantial opportunities to develop facts regarding
evaluations and other proposals Full report Document requests Hearings (at GAO's discretion)
Opportunities maximized through protective order; requires legal counsel not involved in competitive process
Recovery of protest costs Agencies almost always follow recommendation
43
Bid Protests – Alternatives
GAO –Protest Deadline Protests alleging a solicitation defect 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).
Other protests, including post-award protests, must be filed not later than 10 days after the basis of the protest is known or should have been known or within 10 days of debriefing. 4 C.F.R. § 21.2(a)(2).
If protester timely filed agency-level protest, within 10 days of actual or constructive knowledge of adverse agency action. 4 C.F.R. § 21.2(a)(3).
44
Bid Protests – Alternatives
CICA Stay, 31 U.S.C. 3553(c) and (d) Stay is crucial in order to obtain meaningful relief By law, an Agency may not award a contract after
notice of pending protest GAO must notify agency within the required time
limits
CICA Override Head of Procuring agency must make finding GAO must be notified
45
CICA Stay - FAR 33.104(c)(1)
Contract Award
Notice to Agency by the GAO
10 days
or
5 days
Offered Debrief Date and Debrief is required
46
Basis known or should have known or debrief date
Protest Filed at GAO, § 21.2(a)(2)
Protester Comments § 21.3(i);
Supplemental Grounds?
GAO Decision § 21.9
Agency Document List § 21.3(c)
Agency Report § 21.3(c)
Agency Response to Supplemental § 21.3(c)
10 days0 25 30 40 50 100
GAO Notice
10 days
5 daysDebriefDateOffered to Protestor
Contract Award, or
Timeline: GAO Post-Award Protest and Agency CICA Stay
GAO
AGENCY - CICA
Potential for Hearing
70
4747
GAO: Merit Decisions and Protests Sustained
18.6% 23% 29% 27% 21% 18% 19% 16%
48
Bid Protests – Alternatives
COURT OF FEDERAL CLAIMS Court process – opportunity for discovery GAO deadlines do not apply No automatic stay; agency may stop
voluntarily and may also be enjoined Process more expensive and can be more
complicated than GAO Decisions are appealable to Federal Circuit Can challenge agency override of stay
49
Bid Protests – Alternatives
THE OPTIMAL FORUM – WILL VARYDEPENDING ON STAGE IN PROCESS,TYPE OF ISSUE INVOLVED, GOALS ANDRESOURCES TO BE COMMITTED Early in process
Contracting officer or agency Need access to evaluations/other proposals
GAO or Court to use protective order Goal is to ensure status quo during protest
GAO or Court to achieve effective stay
50
A GAO protest must be filed by an "interested party," which means an actual or prospective bidder or offeror with a direct economic interest in the procurement. 4 C.F.R. § 21.0(a). Generally means an offeror that would potentially
be in line for award if the protest were sustained. For agency protests, essentially the same
standard as GAO At COFC, two-part test applies to determine an
"interested party"
Bid Protests – Standing
51
Bid Protests – Standing
Interested parties do not include subcontractors except where the awarding agency has requested in writing that a subcontract protest be decided pursuant to 4 C.F.R. § 21.13.
52
Bid Protests – Typical Issues
Source selection decisions Past performance evaluations Discussions Conflicts of interest
53
Bid Protests – Typical Issues
Source Selection Source selection decisions must be rational and
consistent with the solicitation's evaluation criteria
Reasonableness/rationality: GAO will not "reevaluate" the proposals Protester's "mere disagreement" with the
evaluation is not sufficient to render it unreasonable
54
Bid Protests – Typical Issues
Past Performance issues include—
Similarity of past performance
Agency required to follow solicitation requirements
Agency must consider past performance information "too close at hand" to ignore
55
Bid Protests – Typical Issues
Discussions When an agency engages in discussions, it must
afford offerors in the competitive range an opportunity to engage in meaningful discussions. FAR 15.306(d)(1)
At minimum, COs must discuss with each offeror considered for award "deficiencies, significant weaknesses, and adverse past performance information to which the offeror has not yet had an opportunity to respond." FAR 15.306(d)(3)
56
Bid Protests – Typical Issues
Conflicts of Interest issues include— Agency must reasonably consider potential
conflicts of interest created by awardee's involvement in certain activities
Conflict of interest mitigation plans
57
Bid Protests – Intervening
Why the awardee may want tointervene To protect its interests To obtain access to information subject to a
protective order Generally, only outside counsel can obtain
access to information subject to a protective order
58
Bid Protests – Recap
Protests are sometimes required to protect your interests
Protests move very quickly Imperative to know the rules to meet deadlines
Counsel should be involved as early as possible Spot and evaluate potential protestable issues
59
Hot Topics/Trends
● Possible requirement to choose between GAO or COFC
● Discussion of GAO filing fee
● Dan Gordon commentary on the utility of bid protests
● Trend toward agency corrective actions
60
Questions or comments, please write, call or email:
Rick OehlerPerkins Coie LLP1201 Third Avenue, 40th Fl.Seattle, WA 98101-3099(206) 359-8419(202) [email protected]
Lee CurtisPerkins Coie LLP700 13th Street, N.W., Suite 600Washington, D.C. 20005-3960(202) [email protected]
28011700.1