(Editor’s Note. Despite the fact that the FAR clearly provides for the opportunity to challenge an award decision many contractors are hesitant to do so. After all, contractors are in the business to win contracts not file protests and so why, they ask, does it make sense to sue their best customer – the federal government. Whether or not to pursue a protest is an important decision. We have come across a good article by Keith Szeliga of Sheppard Mullin Richter & Hamilton LLP in the November 2008 issue of Contract Management so we thought we would visit the issue. We have complemented the article with our own comments stemming from our long experience as employees of firms who had to make similar decisions as well as consultants where clients have asked us for our opinions.)
What do you do if you believe the award decision against you is wrong? You have the option of airing your grievances within the agency by going to the contracting officer and even their superiors. In addition you can protest an award decision to either the General Accountability Office (GAO) or the Court of Federal Claims. If you choose to protest, the GAO will usually be your best choice because you will be given an automatic stay of performance (no work until the GAO resolves the matter) if you file on time while the Court alternative does not, it has more experience with protests and is usually less expensive.
Debriefing
Before making a decision on whether to protest you should schedule a debriefing. As soon as you receive a notice of not being selected or being eliminated from the competitive range you should send a written request for a debriefing to the CO. If you wait more than three days to send this request the agency will not be required to conduct a debriefing. You may receive a choice of days for your debriefing but it is important to pick the soonest date because to obtain the automatic stay you must file your protest within five days of the first date offered for the debriefing. The stay is particularly important if you are the incumbent since it is likely the agency will allow you to continue performance and thus get paid until the protest is over.
Your goal at the debriefing is to learn as much as possible why your proposal was downgraded, whether your proposal was evaluated in a manner that was consistent with the solicitation and on what basis the agency chose your competitor. Prior to your debriefing you should compile a list of questions to focus on these areas. Its also good to prepare some open-ended questions related to how the agency evaluated your proposal – extended explanations often yield important insights to raise later. Though a point-by-point comparison with other proposals are not permitted, most agencies will at least disclose the awardeee’s ranking under each evaluation factor, the awardee’s total price and the factors that led to the award decision. The debriefing meeting is not the time to criticize the government and put them on the defensive – rather it should be used to elicit as much information as possible to either decide to go further and to identify protestable points to be used later.
We are often asked who should prepare for the briefing meeting and who should attend. The proposal team should be heavily involved in each. For preparation purposes, counsel should be involved to identify areas to probe and what factors would best lead to a positive outcome. Though controversial, we generally believe that lawyers and consultants should not attend the actual debriefing because their presence tends to inhibit the government, making them less forthcoming and often defensive.
Timing
Protests alleging improprieties in the solicitation must be filed before bid opening or the time set for receipt of initial proposals if the improprieties were apparent prior to that time. In all other cases protests must be filed no later than 10 calendar days after the protester knew or should have known the basis of the protest, whichever is earlier. Exceptions to this is when there are debriefings. The rule here is you must file a protest within five days of the first offered debriefing date to receive the stay but you can still file the protest within 10 days of the first date offered but you will not get the stay. A senior agency official may suspend the stay if there are compelling reasons.
To Protest or Not To Protest
After the debriefing you have five days (10 if you don’t mind giving up the stay) to decide and implement the decision to protest. Several considerations should be made:
1. Was the Procurement Legally Flawed? The first step is to analyze whether there were legal improprieties in the award decision. The fact you disagreed with the agency’s judgment is not enough but rather you need to show there was something objectively wrong with the agency’s evaluation. Protests are usually not effective when subjective issues are raised where the agency contracting and source selection officials had significant discretionary judgment in making its determinations. Rather, focusing on the so-called “hard,” non-discretionary issues are your best chance of success where it can be shown that procurement regulations or terms of the solicitation were violated. Examples include: Were capabilities not disclosed in the solicitation evaluated? Were there any downgrades based on inaccurate information or incorrect assumptions about your proposal? Did the agency disclose all significant weaknesses, deficiencies and adverse past performance information during discussions? Was your cost/price evaluations based on the technical solution proposed? Did the agency ignore your competitor’s failure to meet a minimum required solicitation requirement? Did the agency fail to consider whether your competitor had an organizational conflict of interest? Did the agency consider all the disclosed evaluation factors and only those factors when conducting a best value tradeoff analysis? Did the agency fail to adequately document its award determinations?
2. Were you prejudiced? Once you have determined there are good grounds to pursue a protest the next step is to determine whether you were prejudiced by the poor evaluation. To win a protest you must show the agency’s errors deprived you of a reasonable chance to win the contract. Not all errors will affect a procurement so you have to be able to say if the agency had not made those errors then would you have had a substantial chance for award. If the award would have gone to someone else then there is no reason to pursue the challenge.
3. Is there a good business reason to file a protest? Assuming the first two conditions are met then you have to put on your business hat and ask some questions: How important is the contract to our firm? In addition to obvious sales and profitability questions does the contract allow you access to new markets, offer follow-on opportunities or allow you to maintain a desirable line of business?
4. Will a protest adversely affect your relationship with a customer? It should be realized that unlike the commercial world, the government expects protests especially on high dollar, contested procurements so common fears of offending an important customer are usually exaggerated. Nonetheless, as a practical matter there may be some adverse customer impact so you should consider the strength of your relationship, does the customer rely only on you for its products and services, what is the personality of the customer’s representatives and how much time may pass before your next opportunity with the customer.
5. What are the chances of success after the protest? The published rate for GAO sustain rates is 27% in 2007. In our experience that figure is low because it does not take into account mutually agreed to accommodations made at the agency level that results in withdrawing a protest. Those actions raise another 10-20 points of success on initial protest filings.
6. What are the chances of winning the contract? Winning the protest does not guarantee winning the contract. The most common remedy is to reevaluate proposals or to solicit revised proposals so all you may have is “another bite of the apple.” If after the debriefing you believe your proposal is highly competitive and can be revised to be even more so then the second bite may be advantageous. But if the agency seems unlikely to award you the contract under any circumstances then a successful protest may be an empty victory.
7. How much will the protest cost. It depends on the size and complexity of the procurement, the volume of the evaluation record, the need for experts and how the hearing officer manages the protest. The author, a lawyer, states the cost of drafting an initial protest is low and you can always cut your loses early if the evaluation record does not support your original position.
Filing the Protest
Get your attorney up to speed. Unless you brought in counsel earlier in the process you will first need to immediately schedule a meeting or teleconference to have the proposal team get your attorney up to speed. If the team becomes aware of any possible basis for protesting at the debriefing, that needs to be communicated to the attorney. Authorize your attorney to begin preparing the protest right away and make sure the proposal team reviews and comments on the draft since they are most familiar with the proposals and technical issues.
Protective order. In order to obtain access to the competitor’s proposal and the evaluation record – essential elements to prove your case – your attorney needs to sign a “protective order” that, in order to prevent you obtaining an unfair competitive advantage in the future, precludes him/her from sharing the information with you. Since you cannot review the evaluation record or the agency and your attorney’s responses you will need to rely on your attorney’s judgment regarding your chances of success. The protective order both prevents your access to sensitive information but also prevents the awardee from having access to your information should it intervene in a protest to protect its interests.
The protest process. If the agency does not take corrective action to fix the errors raised in the protest the CO has 30 days to provide your attorney an agency report which consists of the CO’s statements of facts, a legal memo and the evaluation record. Your attorney then has 10 days to review the agency report, respond to it and file a supplemental protest based on any new information gleamed from the evaluation record. This process and beyond is where the legal fees start to pile up so it is best to schedule a meeting with the attorney after reviewing the evaluation record but before preparing any responses. Since protests are largely won or lost based on the evaluation record you should discuss your chances of success right after the attorney reviews the record. If it is low, you will either want to withdraw the protest to cut your losses or if the stakes are high, you may want to continue even if the chances are low as long as your grounds for protest are sufficiently strong as not to ruin your credibility with your customer. If you continue the attorney will draft responses and supplemental protests after which each side often responds to each other and sometimes provides additional briefings. You should maintain continuous communications during this to make sure you are spending your money wisely.
The hearing. Most protests (90%) are resolved by the GAO based on the evaluation record. If there are disputed facts or the procurement is large and complex the GAO may hold an evidentiary hearing. At that hearing the agency’s witnesses will explain the agency’s evaluation and award decision and your attorney will have the opportunity to cross examine them. If you have technical or cost experts they will testify then. Because of the protective order, you will not be able to attend the hearing. Shortly after the hearing the GAO will request briefs from each party after which they will have an opportunity to respond.
GAO’s decision. The GAO must decide a protest 100 calendar days after the date on which it was filed. The GAO never misses this date so there is at least an end in site. The GAO’s decision will take the form of a recommendation in which the agency always follows. If you win, several forms of relief are available. If the defect was based exclusively on proposal evaluations, the GAO may limit its recommendation to re-evaluate all proposals already submitted. Or, the GAO may recommend broader relief such as reopening discussions, soliciting revised proposals and making a new source selection decision, If the GAO decides no other remedy is available it may recommend the agency reimburse you for your bid and proposal costs or in addition, it may recommend the agency reimburse the cost, including attorney fees, of filing and pursuing your successful protest. Keep in mind that unless you are a small business, the so-called “reasonable” attorney hourly fees will rarely cover actual legal fees.
Additional options. If you lose the protest, you have three options: (1) accept defeat and move on (2) ask the GAO to reconsider or (3) appeal to the Court of Federal Claims. The first option is usually the most sensible since reconsideration and appeals are usually unsuccessful. However, there are a number of recent cases that have been reversed by the Court so if there is enough at stake and you are convinced of your position and have the stomach for more expenses then the third option may be warranted.
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