Protester Beware: Recent GAO Decision Suggests Traditional “Reasonable Possibility” Prejudice Standard May Be Evolving

It is well established that “[c]ompetitive prejudice is an essential element of every viable protest.” Yet, for decades, the U.S. Government Accountability Office (GAO) has tempered this requirement with two critical corollaries: protesters need only demonstrate a “reasonable possibility” that they were prejudiced by an agency’s actions, and GAO “will resolve doubts regarding prejudice in favor of the protester.” These principles have been consistent features of GAO’s bid protest jurisprudence for more than 30 years. See, e.g., United Int’l Eng'g, Inc., B-245448, Jan. 29, 1992, 71 CPD ¶ 177.

A recent GAO decision calls these settled principles into question. In Highlight Technologies, Inc., B-424060.2, May 22, 2026, GAO found that an agency’s evaluation was inconsistent with the terms of the solicitation — yet denied the protest because the protester failed to submit “convincing evidence to support its claim of prejudice.” This outcome appears to reflect a significant departure from the “reasonable possibility” prejudice standard and GAO’s longtime practice of resolving prejudice doubts in a protester’s favor.

The underlying facts illustrate why the decision is so notable. As the incumbent contractor, Highlight asked the agency during the solicitation’s question-and-answer period whether there was a ceiling value for certain optional supplemental labor line items. The agency responded that the ceiling value for these optional line items would “fall under” the developmental modernization and enhancements line item. The agency’s response, together with the plain terms of the solicitation and Highlight’s experience performing the incumbent contract, led the company to adopt a particular pricing approach that incorporated the amount associated with those optional line items into the fixed-price portion of its quotation.

During the evaluation, however, the agency added an undisclosed $2 million ceiling price for the optional supplemental labor line items onto each vendor’s total evaluated price — essentially adding $10 million to the offerors’ evaluated prices. Because Highlight had already factored this amount into its own pricing, the agency’s addition resulted in what was effectively a double-counting of that sum in Highlight’s evaluated price. GAO acknowledged that the agency’s mid-evaluation undisclosed addition of a $2 million per year ceiling price for the optional supplemental labor CLINs was inconsistent with the solicitation’s plain language and evaluation criteria. The record further showed that Highlight received higher ratings than the awardee under each of the three non-price evaluation factors, and that the award decision turned entirely on the source selection authority’s conclusion that Highlight's non-price superiority did not justify its $8,950,272 price premium.

Despite this, GAO denied the protest. In doing so, GAO applied what appears to be a considerably more demanding prejudice standard than the one historically required. GAO faulted Highlight for failing to present “convincing evidence” to support its claim of prejudice. Notably, Highlight had in fact identified a specific dollar amount reflecting the price reduction it contended it would have offered had the agency disclosed its intention to add a $2 million annual ceiling price to the total evaluated price. Highlight also submitted a declaration in support of that figure. But GAO found this insufficient, faulting Highlight for not “describ[ing] or explain[ing] how it calculated” that specific price difference. 

In support of this deviation from the prejudice standard, GAO cited to a single, two-paragraph-long decision, Online Video Serv., B-403332, Oct. 15, 2010, where GAO held that the protester was not prejudiced by the agency’s failure to raise its significantly higher price during discussions because the protester just claimed that it would have lowered its price without providing “specific information or explanation as to how it would have lowered its price.”  However, unlike Highlight, that case included no reference to a declaration, just an unsupported allegation that “it would have dropped its price dramatically — even to the amount proposed by [the awardee] so as to materially enhance OVS’s potential for winning the award.”

This new, “convincing evidence” standard stands in sharp contrast to GAO's longstanding position that only a "reasonable possibility" of prejudice is needed and that doubts regarding prejudice are to be resolved in a protester’s favor.

Given the Highlight decision, protesters should take extra precautions when presenting prejudice arguments. Where possible, protesters may wish to include specific, detailed explanations and calculations — in addition to declarations — demonstrating prejudice with as much specificity and supported by as much evidence as possible, to guard against a denial on the grounds that the prejudice showing falls short of the apparently heightened bar this decision appears to apply.