By J. Patrick McMahon and William T. Welch

McMAHON, WELCH & LEARNED

If you are a federal contractor, in all probability you already have had a procurement affected by a bid protest – if not, you will soon. The federal market has always been competitive but there is more intense competition today and as the federal budget constricts, competition will increase. In the Defense space, larger companies are now competing for contracts that they might have viewed as too small a few years ago and their participation in a wider range of procurements exerts considerable additional competitive pressure on the small to mid-size contractors in that space – we should not expect relief within the foreseeable future. Protests are a part of the competitive process and as competition increases, so do the number of bid protests. For example, the number of bid protests filed at the General Accountability Office has increased from 1,411 in fiscal year 2007 to 2,353 in 2011. In our view there are other reasons that contribute to the increase in the number of bid protests. The federal government lost to retirement and transfer a great many seasoned procurement professionals over the past decade. Training up the replacements has proven difficult. The lack of experience, coupled with increased workloads, has caused some solicitations to be less than perfect when issued and therefore susceptible to protest.

Clients often ask whether bid protests ever work and do they affect the client’s ability to work with its Government customer. The answer always is: it depends. It depends on the Government’s contracting personnel: the CO or the COR. It depends on their experience level and degree of business sophistication and understanding of the procurement process. Whether you should protest is fundamentally a business decision. Many factors will be considered but in the final analysis you should focus on the question of whether or not it is in the best business interests of your company to pursue a protest. In our view, it is always in your best interest to actively participate in a protest where your company is the awardee and another company has protested the award. While the protest is really against the procuring agency, you should not rely on the procuring agency to represent your interests in an ensuing protest.

Do they work? Yes they do. We have had clients receive contracts as a result of a protest. We have had clients lose contracts as a result of someone else’s protest. If the agency makes a mistake and they are professional enough to admit it and take the appropriate action, protests can work the way they are supposed to – sometimes. Your focus should always be on what you can reasonably expect from your particular protest, based on your particular circumstances. Your focus should always be on pursuing protest grounds that are based on known facts (or reasonably-based inferences) that can be presented in a thorough manner with professionalism and courtesy to all parties involved. Most COs understand that bid protests are part of the procurement process. It is a right guaranteed by Congress and experienced procurement officials are not ordinarily offended by a protest unless it frivolous or personal in tone. You can pursue your protest with dogged persistence without coming across as aggressive or antagonistic. If you can keep the respect of your adversaries and GAO counsel (or judge), you are more likely to get some or all of the relief you are seeking in your protest.

The most important first step is to get as much information as possible through the debriefing process. FAR § 15.506 gives disappointed offerors the right to a debriefing on their evaluation so long as the debriefing is requested within three days of notice of award. Use this mechanism to understand how your proposal was evaluated and how the awardee was evaluated. If you can get a live debriefing, in-person or by phone, you can ask questions about the process and the results. Ask as many questions as you can, but don’t go in looking for a fight – do not expect to persuade the agency to change its mind because this is not the purpose of the debriefing. If you are argumentative during the debriefing, the CO will likely cut it off early. The FAR says you have a right to certain information, but you have no recourse if the CO decides he’s done talking. Experienced counsel can often help to identify issues and to get information at the debriefing and in our experience are always welcomed by seasoned procuring officials. It’s in the Government’s best interest to give you as much information as possible to show they made the right decision and thereby direct you away from protesting. Unfortunately this is not always the case. In our view, one of the common reasons for protests lately has been an increasing reluctance on the part of the procuring agencies to share meaningful information with disappointed offerors in the debriefing phase of the procurement. This reluctance to provide meaningful debriefing information is often interpreted by the disappointed offeror as an admission by the agency that mistakes were made in the source selection and of course this invites unnecessary protests.

If you are convinced that you have grounds for a protest, consult an attorney and do so early. The time-requirements for a protest are very short, measured in days, and sometimes confusing. If you file a protest, you want your protest to be timely and you want the new contract held up until your protest is resolved. These two goals have separate time limitations and separate rules.

If you decide you want to protest, you have three non-exclusive forums: (1) protest to the agency; (2) protest to GAO; or (3) protest to the U.S. Court of Federal Claims. Agency-level protests are usually futile, because you are protesting to the same entity that made the decision in the first place. Moreover, with an agency-level protest, the new contract is held up only for 30 days or less, even though you are allowed to pursue a GAO protest if the Agency denies your protest.

Protests to the U.S. Court of Federal Claims have the advantage of virtually no minimum time requirements, but, as the name implies, this is real federal court litigation. Regardless of the presence of agency counsel, the Department of Justice defends all protests in the Court of Federal Claims. It can be expensive and is most likely to be antagonistic to the Agency. Protests to the Court of Federal Claims should be only a last resort and, like most court litigation, is not likely to produce good results for either side.

Protests to the GAO are the most common and the most successful. By law, GAO must decide a protest in 100 days, which is short enough for agencies to plan the procurement to allow time for protesting. Moreover, if the timing requirements are met, the contract will be stayed for the entire 100 days of the GAO process.

Although the number of protest actually sustained by GAO is low (only 67 protests were sustained by GAO in 2011 when it considered 2,353 protests), the number of protests that actually result in some relief for the protester averages over 40%. This includes relief in all forms, whether it’s a sustained protest decision, or, more likely, a decision by the Agency to take corrective action to fix whatever problem the agency acknowledges as a result of the protest (and sometimes the debriefing) – we call this voluntary corrective action. The two most likely outcomes of a voluntary corrective action are (1) a re-evaluation of existing proposals or (2) reopening the competition, amending the solicitation, and going out for new final proposal revisions. This does not guarantee that you will get the contract. It only guarantees that you will have another chance at a better, fairer evaluation or another chance at a proposal revision. An experienced bid protest attorney will manage the client’s expectations by explaining the process and describing the possible outcomes and how the client can position itself to take advantage of those possible outcomes.

The protest process can produce good results – sometimes for both sides. But, you have to understand the procedures, pursue it fairly and honestly, and understand what it can offer you and when.

About McMAHON, WELCH and LEARNED

Our firm provides corporate and business-related support and legal services to federal government contractors as well as commercial entities. Our federal practice focuses principally on small to mid-sized federal contractors who provide a range of services to the federal government, including information technology services. We handle any issue involving federal government contracts, including bid protests, contract claims, termination settlement proposals, small business issues, and subcontract negotiation and disputes. We have supported and assisted the small and disadvantaged business community for many years, assisting minority-owned firms with certification and qualification for participation in the various programs administered by the Small Business Administration. Our corporate legal services include advice and assistance with business formations, business lifecycle support, and the merger and purchase/sale of business organizations.