David M. Nadler
It is no secret that federal procurement spending has dropped considerably in recent years. With fewer dollars being spent and fewer procurements, government contractors in the maritime industry are increasingly turning to the bid protest process for a second chance to compete for, and hopefully win, new contracts, and preserve their incumbent contracts. The statistics bear this out. Bid protest activity at the U.S. Government Accountability Office (“GAO”) has steadily increased year-over-year, with a record 2,639 protests filed in fiscal year 2015 alone. But more filings has not meant more sustained protests; the GAO sustain rate in 2015 fell to its lowest recent level of only 12 percent (though this does not account for voluntary agency corrective actions, which have remained steady).
These statistics, and the new federal procurement reality, reinforce the need for maritime contractors to think carefully about effective protest strategies and emerging issues to maximize their chances to successfully protest procurements (or defend contract awards). Below are ten key trends and tips for government contractors in the maritime industry to keep in mind:
1. Common Protest Grounds Remain Winners
As reported by the GAO, the most common winning protest grounds in 2015 contended that the agency failed to follow stated evaluation criteria, engaged in an unreasonable technical evaluation, failed to adequately document its evaluation and award decision, unreasonably evaluated cost or price, and/or unreasonably evaluated past performance.
2. Focus on Process
Protesters are more likely to prevail if they focus on flaws in the agency’s evaluation process. Subjective debates about the merits of an award are almost always unproductive because the GAO affords agencies considerable discretion on their conclusions regarding such matters; for example, whether the protester’s technical approach was poor, acceptable, good, or excellent. The GAO will sustain a protest if the protester can show prejudicial process errors, like that the agency failed to follow the solicitation’s stated evaluation criteria, relied on unstated criteria to discriminate among offerors, or reached conclusions that are not reflected in the evaluation record. Successful protest arguments often focus on objective process errors in the agency’s evaluation and award process. Highlighting these types of defects may also encourage an agency to take early corrective action and can improve the chances of a successful protest.
3. Make Disparate Treatment Arguments
Whenever possible, protesters should seek to make arguments that their proposals were disparately evaluated relative to the awardee’s proposal. Such unequal treatment arguments are important because they give protesters a basis to request the awardee’s proposal as part of the agency report. Having the awardee’s information and comparing it side-by-side with yours and the agency’s respective evaluations will significantly improve the pro- tester’s chances of demonstrating that the agency engaged in improper disparate treatment.
4. Supplemental Protests Are
Because a protester has limited information at the time of a contract award and initial protest, protesters should focus closely on developing issues that will position counsel to have a broader look at the record as the protest develops. For example, having the awardee’s proposal is important because it usually allows the protester to identify supplemental protest grounds. In many cases, protests are won, or corrective action is taken, on the basis of supplemental protest grounds rather than the initial protest.
5. Mind Trends in LTPA Procurements
Recent years have seen an increasing use of fixed-price contracts in lowest-priced, technically-acceptable (“LPTA”) procurements, over the more traditional best-value procurements. Although offering the lowest price is a necessary part of winning the contract, price alone is not a sufficient condition to award. Contractors must still ensure that their proposed technical solutions demonstrate an adequate understanding of solicitation requirements and are realistic to meet the agency’s needs and schedule. In short, while price is important, offerors competing for LPTA contracts should ensure that their proposals are compliant with the solicitation’s terms, realistic, and whenever possible, demonstrate performance that exceeds minimum requirements or otherwise provides benefits and advantages not required by the solicitation. These potential discriminators, which the agency can recognize as strengths, are still very relevant considerations in LPTA settings.
6. The CICA Stay Loophole
A primary advantage of filing a protest at the GAO versus other forums has been the automatic stay of contract performance under the Competition in Contracting Act (“CICA”) during the pendency of the protest. As a practical matter, the stay has benefitted protesters who are incumbents because it has generally resulted in the agency issuing a bridge contract to the protester to continue the work for the duration of the protest. Agencies generally issue a bridge contract, rather than seek an override of the automatic stay, because of the heavy burden placed on the agency to obtain an override. However, where a multiple award ID/IQ contract is in place, and the protest concerns a new task order under the current contract, some agencies have started circumventing the traditional override process by sole sourcing a task order bridge contract to the non-incumbent awardee for less than $10 million. This allows the awardee, rather than the incumbent protester, to perform the contract while the protest is pending. Because the GAO generally lacks jurisdiction over task orders valued at less than $10 million, and the Court of Federal Claims has no protest jurisdiction over task orders at all, this approach effectively allows agencies to bypass the purpose of the CICA stay, which is to preserve the status quo until the protest has been resolved. Until Congress closes this loophole, the potential lack of a bridge contract during the protest period and the associated revenue loss should factor into the risk/benefit analysis for incumbents when deciding whether to protest.
7. Intervention as Protest Insurance
Even though the majority of protests that proceed to a decision are denied, a contract awardee has a vested inter- est in the outcome that almost always warrants participation in the protest through intervention. No other party to a protest, even an agency that awarded you the contract, will be able to represent your interests as well as counsel admitted under a protective order. Intervention by outside counsel will afford an awardee representation who will have access to complete copies of protest filings, and enable the intervenor to actively assist in the defense of the protest. In short, if you can intervene in a protest, you should.
8. Check the Clock
Bid protests are subject to strict timeliness rules that vary based on the type of procurement and forum. At the GAO, contractors typically have 10 days to file a post-award protest from when they knew or should have known their basis for protest. Timeliness rules are particularly important where protesters are seeking a stay of contract award or performance (as is almost always the case). For example, to obtain a stay of award under CICA on a procurement with a required debriefing, the protest must be filed—and the agency notified by the GAO of that filing—within five days of the date offered for the debriefing. The key takeaway: if you’ve learned adverse information regarding a procurement, the clock is ticking.
9. Two Bites at the Apple
A common strategy is to first file your protest at the GAO, and depending on the developments during those proceedings or their outcomes by the GAO, to take another shot by refiling the protest at the Court of Federal Claims. Protesters who find their chances of success low at the GAO are free to withdraw their protests and refile them at the court. Indeed, a protester can refile its protest at the court even after the GAO has denied it. While the court recognizes GAO’s bid protest expertise, it does not consider GAO decisions binding or precedential. The court conducts a new review of any protests before it. Because the court arrives at its own factual and legal conclusions, it can, and often does, sustain a protest previously denied by the GAO.
10. Keys to the Kingdom
Access to an agency’s source selection documents and the awardee’s proposal is paramount in maximizing your chances of success in a protest. While GAO rules limit a protester’s access to documents to only those that are relevant to its allegations, which may only lead to partial access, the Court of Federal Claims requires the government to automatically provide all documents related or used in the procurement as part of the administrative record in the case. Thus, while going to court is generally more expensive than the GAO, this key difference may justify that premium in bigger ticket protests where the entire procurement needs to be carefully reviewed.