FEDERAL GOVERNMENT CONTRACTS

An Overview of the Bid Protest Process

Thomas A. Coulter, Esq. Nicole H. Brakstad, Esq.

Live Webinar November 19, 2013

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Today’s presenters...

Tom CoulterAlexandria, VA

Nicole BrakstadRichmond/Alexandria, VA

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What is a Federal Government Contract?

Federal Contract means an acquisition contract awarded by an agency, including those subject to the Federal Acquisition Regulation (FAR) (48 CFR Chapter 1) and any other acquisition contract for real or personal property or services not subject to the FAR.

According to the FAR, “Contract” means a mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds and that, except as otherwise authorized, are in writing. In addition to bilateral instruments, contracts include (but are not limited to) awards and notices of awards; job orders or task letters issued under basic ordering agreements; letter contracts; orders, such as purchase orders, under which the contract becomes effective by written acceptance or performance; and bilateral contract modifications. 48 C.F.R. 2.101.

As evidenced by that definition, federal government contracts come in all shapes and sizes and permeate many different areas and industries.

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Overview

What is the typical contract award process? What is a debriefing? What is a protest? When to file a protest? Where to file a protest? What are the types of issues that can be the subject of a protest? What are the deadlines for filing a protest? What is the available relief for a successful protest? What are some of the strategy considerations as to protest

grounds and approach? When and how should you defend protests filed by a competitor?

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Typical Contracting Methods and Contract Types

FAR Part 8: GSA Federal Supply Schedules FAR Part 14: Sealed Bidding (Invitation

for Bid) FAR Part 12/15: Negotiated Bidding

(Request for Proposal or Request for Quotation) Sole Source

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Contract Award Process

Solicitation (IFB, RFP, RFQ) issued Offerors submit proposal/bid Responsibility/responsiveness

determination Evaluation of qualifying proposals/bids Announcement of Notice of Intent to

Award or Award Decision Debriefing/Brief Explanation

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Debriefing

Asking for a debriefing is a way to obtain information and identify potential grounds for a protest.

Formal debriefing rules specify timing and content of debriefings.• NOTE: Debriefing rules apply only to FAR Part 15 negotiated

procurements; other types of competitive procedures require only limited disclosure of evaluation information (e.g. FAR Part 8 “brief explanation”)

Debriefings affect timing for filing bid protests and obtaining the GAO’s “automatic stay” of contract award and performance

Involve counsel early to assist with request and questions posedduring Agency’s presentation. Information obtained in debriefings is useful in drafting protest background and often provides additional grounds of protest.

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What is a Bid Protest?

Protest of the Solicitation and/or Award of any Federal Government Contract• Written objection by an interested party to

– Terms of solicitation – Cancellation of solicitation – Award or proposed award of A contract

Can Be Pre-Award or Post-Award

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When to Protest Pre-award:

• “prior to bid opening or the time set for receipt of initial proposals” --4 C.F.R. 21.2(a)(1)

Post-award:• Not later than 10 days after the basis of protest is known or

should have been known (whichever is earlier) -- 4 C.F.R. 21.2(a)(2)

– Typically triggered by a Notice of Intent to Award or Award Notice

– Posting on FedBizOpps.gov site is sufficient to provide notice.

• If debrief requested timely and required, then not later than 10 days after the date on which the debriefing is held -- 4 C.F.R. 21.2(a)(2)

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Common Pre-Award Protests Solicitation is unduly restrictive (establishes

standards that are not needed or unnecessarily limits competition)

Solicitation language or scope of work (SOW) is vague or ambiguous

“Brand Name Only” or “Brand Name or Equal” Not enough time to respond Improper elimination from the competitive range Challenge to sole source procurement

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Common Post-Award Protests

Improper evaluation of technical, management, past performance, or cost, evaluations that deviate from stated evaluation criteria, or a flawed “best value” decision

Awardee’s proposal is non-responsive or fails to meet minimum mandatory requirement (i.e. Agency relaxed its standards)

Misrepresentation on part of awardee Organizational Conflict of Interest (“OCI”)

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Where to Protest

Agency-Level Protest

Government Accountability Office (“GAO”)

United States Court of Federal Claims

Appeals from United States Court of Federal Claims to the United States Court of Appeals for the Federal Circuit

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Agency-Level Protests Advantages:

• Informal• Inexpensive• Quick decision -- 35 days after filing of Protest• Good option pre-award -- agency more likely to amend solicitation or

take action

Disadvantages:• Decision makers are agency personnel, i.e. the Contracting Officer,

who just awarded the contract to another bidder• No defined body of law/precedent to govern protest decision• No review of agency findings• No automatic stay

Possibility of going to GAO/COFC if you do not get the relief you sought

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Government Accountability Office

Typical Protests Heard by GAO:• Improper evaluation of Bid/Proposal• Error in procurement process• Defective Solicitation (Pre-Award)• Termination/cancellation of procurement

Protests Excluded from GAO Jurisdiction Include:• SBA Size Determinations and 8(a) Determinations• Task Order awards under $10,000,000• Contract administration Issues (Claims/Suspension/Debarment)• Competitive range determinations• Responsibility determinations• Procurement Integrity Act challenges• Subcontractor disputes.

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Government Accountability Office

Advantages• Informal (but more involved than agency-level)• Inexpensive (but more expensive than agency protest)• Quick decision – 100 days after filing Protest (65 days if

request expedited review).• Good option for Pre-Award Protests (agency can take

corrective action).• Automatic stay of performance.• Can go to COFC if you lose.

Disadvantages• No Discovery – Limited ability to obtain additional information.• Lack of in-depth analysis of legal issues.

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GAO Statistics

6% (32 cases)12% (65 cases)10% (61 cases)8% (46 cases)6.17% (56 cases)Hearings

78%93%80%82%80%ADR Success Rate

78149159140106ADR (cases used)

42%45%42%42%42%Effectiveness Rate (some form of relief from the agency or GAO)

21%18%19%16%18.6%Sustain Rate

60578267106Number of Sustains

291315441417570Merit (Sustained + Deny) Decisions

1,5821,9202,2262,2922,495Cases Closed

1,652(up 17%)

1,989(up 20%)

2,299(up 16%)

2,353(up 2%)

2,475(up 5%)

Cases Filed

FY 2008FY 2009FY 2010FY 2011FY 2012

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US Court of Federal Claims Jurisdiction Governed by the Tucker Act (28 U.S.C. 1492)

• “[A]n Interested Party Objecting to a Solicitation By a Federal Agency for Bids or Proposals for a Proposed Contract or To a Proposed Award or the Award of a Contract or Any Alleged Violation of Statute or Regulation in Connection With a Procurement or a Proposed Procurement.

Advantages• Broader jurisdiction than Agency/GAO• More in-depth analysis by Court (factual and legal matters)• Availability of Administrative Record to bolster case• Some discovery – ability to supplement record to bolster case

Disadvantages• No automatic stay – must move for a TRO/preliminary injunction• Time for decision – average is 5 months for decision on merits• Most expensive forum• Procedural hurdles (Motion to Dismiss)• Less knowledge of technical aspects of procurements

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Court of Federal Claims Statistics

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66

78

57

42

99

2012

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73

82

69

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98

2011

3177•Unpublished

50385064•Published

53395771Protest Decisions

63565269•Post-award

18232219•Pre-award

81797488Protest Filed

2007200820092010Calendar Year

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Time for Filing a Bid Protest

Agency/GAO Protests –• 10 days after a bidder knew or should have known of

protest issue • 10 days after receiving a required debriefing

• But Must File Within 5 Days of a Debriefing to Invoke Automatic Stay

• 10 days after denial of an Agency-level Protest Court of Federal Claims –

• No specific deadline, but for injunctive relief, as soon as possible

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Automatic Stay

Under the Competition in Contracting Act (“CICA”), 41 U.S.C. 251, et seq. and 10 U.S.C. 2305, filing a timely Protest with Agency/GAO invokes an automatic stay of contract award/performance until Protest decision issued.• 10 days, but 5 days after required debriefing• Not in effect unless Agency receives timely notification

from GAO (within 10/5 days); GAO has 1 day to notify agency.

No automatic stay in Court of Federal Claims; must seek TRO and/or Preliminary Injunction to stay contract award/performance.

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GAO Procedure – Contents of Protest

Factual background Protest counts (legal argument) Request for relief Request for documents Request for issuance of protective order Protest under protective order Redacted version 5:30 deadline; time to contact Agency for Stay

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GAO Procedure - Agency Report

Due 30 days from Notice of Protest Contents of Agency Report:

• Contracting Officer’s statement of the relevant facts• Memorandum of law, • List and a copy of all relevant documents, or portions of

documents, not previously produced, including, as appropriate:

– the protest; the bid or proposal submitted by the protester; the bid or proposal of the firm which is being considered for award, or whose bid or proposal is being protested; all evaluation documents; the solicitation, including the specifications; the abstract of bids or offers; and any other relevant documents

4 C.F.R. 21.3(d).

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GAO Procedure – Supplementing the Agency Report

Request for Additional Documents• Within 2 days after receipt of “5-day” Letter• Within 2 days after receipt of Agency Report

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GAO Procedure – Supplemental Protest

Within 10 days of when protester knew or should have known of new protest grounds• Typically, 10 days from receipt of Agency

Report

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GAO Procedure – Hearings

At the request of a party or on its own initiative, GAO may conduct a hearing in connection with a protest.

4 C.F.R. 21.7

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Bid Protest Remedies

(1) Refrain from exercising options under the contract;

(2) Terminate the contract; (3) Recompete the contract; (4) Issue a new solicitation; (5) Award a contract consistent with statute

and regulation; or (6) Such other recommendation(s) as GAO

determines necessary to promote compliance4 C.F.R. 21.8

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Additional Bid Protest Remedies

Bid Preparation and Proposal Costs Attorney Fees

• GAO -- Discretion of Comptroller General• Court of Federal Claims -- Must prevail

under Equal Access to Justice Act (“EAJA”) Proceeding–Must show Government’s position

was substantially unjustified.

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Strategy – Why File a Protest?

Agency may take corrective action after being notified of mistake.

If protestor is the incumbent – likelihood of continuing to perform during the contract period, as well as during any corrective action period.• This is where forum choice becomes important.

May be the only way to determine how you were evaluated.

Other (e.g. making a point, forcing a discussion, etc.)

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Strategy – When to Involve Counsel?

Short time period (Agency, GAO, COFC) Hiring outside counsel (conflicts) Debrief Factual and legal development Importance of getting all your arguments in up

front Protest document is one of two times that you are

guaranteed to get GAO’s attention Should be heavily involved in initial protest filing

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Strategy – How Should You Approach?

Approach depends on goals of protest.• Will want to consider whether you still have to

get the Government to award you a contract.• May want to attack competition.

Narrow approach versus “Shotgun”approach.

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Intervention – Should You Get Involved?

Awardee has right to intervene on the side of the government at GAO/COFC• In most cases, awardee should intervene.• Government’s motivation is not always the same or may

diverge from the awardee’s. Intervenor Counsel May be Able to:

• Find grounds for motion to dismiss• Find defenses• Include arguments and cases that Agency does not.

Intervention is the only way to protest your award and protect yourself against attacks – have to continue to “sell yourself” to the Government.

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Intervention – Strategy

Protest is premature Protest is untimely

• Challenging solicitation terms post award (submission)

• Should have known of issue earlier Protester is not an interested party

• Next in line • Non-compliant/non-responsive protest • Non-responsible protester

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Example of Bid Protest Process –DSI/STR V. UNITED STATES

Case results depend upon a variety of factors unique to each case. Case results do not guarantee or

predict a similar result in any future case.

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Example of Bid Protest Process –DSI/STR V. UNITED STATES

STR, L.L.C. – Small Business, Government Contractor Providing Grants Management Assistance to Federal and State Agencies

DISTRIBUTED SOLUTIONS, INC. – Small Business, Government Contractor Providing Acquisition Assistance Software to the Federal Government, including the United States Agency for International Development (“USAID”)

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DSI/STR V. UNITED STATES In June 2005, USAID sought to upgrade its grants management/acquisition

assistance software Issued a Request for Information (“First RFI”), seeking separate software for

grants management and for acquisition assistance DSI and STR Submitted Responses and Provided Demonstrations of Their

Products In August 2005, USAID Issues Notice – “Government has Decided to Pursue

an Alternative Course of Action” On Same Day – a Large Technology Company, SRA International, Issues a

Second RFI Virtually Identical to the First RFI. • In essence, USAID Tried to Delegate its Procurement Responsibilities to SRA,

making all vendors like STR and DSI subcontractors, instead of the typical procurement path of direct government procurements from the vendors

After Following the Same Procedure as with the First RFI, SRA Makes Recommendations to USAID and Proceeds to Procure the Two Software Packages for USAID

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DSI/STR V. UNITED STATES

Grants Management – Instead of STR, SRA Selects a Canadian Company With No History of Federal Government Contracting, in Violation of the Buy American Act (Requiring Preferences for American Products)

Acquisition Assistance – Instead of DSI, SRA Selects a Company on Whose Board of Directors Sits a High Ranking Executive of SRA, in Violation of Regulations Requiring the Government to Avoid Organizational Conflicts of Interest

Two Selected Vendors Enter into Subcontracts with SRA Process of Selecting Two Software Packages in One

Procurement, Both of Which were Previously Obtained in Separate Procurements, Violated the Small Business Act’s Prohibition on Bundling Separate Procurements Together

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DSI/STR V. UNITED STATES

STR and DSI File Protests with GAO GAO Dismisses Both Protests as “Subcontractor”

Protests STR and DSI File Bid Protest in the United States

Court of Federal Claims Unlike the GAO, the Court of Federal Claims Has

Jurisdiction Over “Any Alleged Violation of Statute or Regulation in Connection with a Procurement or a Proposed Procurement." 28 U.S.C. 1491

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DSI/STR V. UNITED STATES

Government Argues No Jurisdiction – No Federal Government Procurement, since Procurement Ostensibly Handled by SRA

Although SRA only “Recommended” Software and USAID Officials Made Actual Procurement Decision, Because Vendors Entered into Subcontracts with SRA, Court of Federal Claims Dismisses Case for Lack of Jurisdiction –Violations Were Not in Connection with a Federal Government Procurement

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DSI/STR V. UNITED STATES

DSI/STR Appeal to the Court of Appeals for the Federal Circuit Court of Appeals Reverses Lower Court Decision Court of Appeals Holds that Government’s Decision to Procure

the Software Through SRA, as opposed to a Direct Procurement with Vendors, was a Protestable Decision Within the Court of Federal Claims’ Jurisdiction – After Issuing an RFI, Thereby Beginning the Procurement Process, USAID’s Decision to Use SRA, Without Engaging in OCI or Bundling Analyses Involved Alleged Violations of Statutes/Regulations In Connection With a “Proposed Procurement”

Court of Appeals Decision Established Jurisdiction to Challenge Pre-Procurement Decision Making by the Government

Case of First Impression; Has Greatly Expanded Procurement Protest Possibilities

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Questions?

Thomas.Coulter@leclairryan.com

Nicole.Brakstad@leclairryan.com

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Thank You

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