Insights

In XPO Logistics Worldwide Gov’t Servs., LLC (released Mar. 21, 2017), in which C&M co-represented XPO, GAO sustained a protest challenging the awardee’s past performance rating, setting aside USTRANSCOM’s award of a $3B freight services contract. GAO found that the value of the awardee’s past efforts are extremely small relative to the value of the requirement, that the contemporaneous record did not explain the basis for the agency’s determination that these tiny past efforts were somewhat relevant under the solicitation, and that the agency’s post hoc reevaluation during the protest was unreasonable. GAO recommended that the agency reevaluate the awardee’s past performance and then make a new award decision.

In Prof’l. Serv. Indus. Inc. v. United States, the Court of Federal Claims sustained a protest of a corrective action that the Federal Highway Administration took in the wake of a GAO decision that the awardee’s proposed program manager lacked the requisite experience. The court found that the agency’s decision to amend the solicitation was arbitrary and capricious because the agency changed the required qualifications for the program manager—in a manner that conformed to the original awardee’s proposal—rather than conducting a re-evaluation of the proposals under the un-amended solicitation’s criteria.

In Coast Professional, Inc. v. U.S. (July 12, 2016), the Federal Circuit revived bid protests (including that of the lead appellant, represented by Crowell & Moring) challenging task order contract awards that had previously been dismissed for lack of jurisdiction by the CFC. The court held that, because the appellants were challenging the “proposed award or the award” of new task orders under GSA Federal Supply Schedule contracts, which challenges fall squarely within the CFC’s statutory bid protest jurisdiction, it was irrelevant whether the new task orders, which were in the form of award-term extensions, shared some functional similarities to options or originated out of existing contracts rather than being the subject of entirely separate procurements.

In Nat’l Air Cargo, Inc. v. U.S. (Apr. 28, 2016), the CFC concluded that awardees in a procurement contemplating the award of multiple IDIQ contracts are interested parties with standing to challenge the validity of the awards to other contract awardees in the procurement. In a significant departure from GAO's stance of the issue, the court held that, even when all task order work under the IDIQ is to be competed at a later date, each awardee suffers a non-trivial injury from the improper addition to the original pool of awardees because the size of the pool has a material impact on the likelihood of winning future task order work.

In its legislative proposal package sent to Congress on April 12, 2016, the DoD is again seeking to curtail the CFC’s bid protest jurisdiction significantly by importing nearly all of GAO’s rigid timeliness rules into the Tucker Act, 28 U.S.C. § 1491(b), with the stated goals of “reducing the time to decide bid protests by avoiding unnecessarily repetitive protests” and eliminating an “unintended forum shopping practice that has arisen under the existing bid protest system[.]” For a detailed review of the similar DoD legislative proposal in 2012, see this post, where we explain why the proposed change, among other things, (1) will not fully address DoD’s “second bite at the apple” concerns, (2) will deny many prospective protesters a “first bite,” and (3) may have a significant effect on the types and numbers of protests filed in the GAO and the CFC.

On April 15, 2016, GAO published a proposed rule, with comments due May 16, to implement a web-based electronic docketing system that, when the rule is finalized, will be the only conduit for filing a protest letter and other filings, with the exception of classified ones. In addition, among other changes, the proposed rule indicates that GAO will impose a filing fee, anticipated to be $350, for at least six years to offset the cost of the development and maintenance of the system and will require the parties to prepare a redacted public version of all documents filed in connection with a protest.

In SRA Int’l, Inc. (released last week), although the solicitation allowed the government to negotiate a final reduced price with the prospective awardee after it had been selected for award, GSA conducted discussions with the eventual awardee before documenting any best value determination and before the evaluations were even finalized. Because GSA did not conduct discussions with any other offerors, GAO held that the discussions were unequal and recommended that GSA go back, establish a competitive range, and open discussions with all remaining offerors.

In a low-price-technically-acceptable procurement for IDIQ contracts for flame-resistant Army combat shirts, GAO sustained a challenge to the technical evaluation because the agency did not critically evaluate whether any of the three awardees' proposals actually met a particular solicitation requirement. GAO rejected the agency's nondescript finding that each awardee's proposal was "acceptable," and instead concluded that none of the awardees had provided a meaningful narrative addressing the requirement and that one, in fact, had included test data in its proposal showing that it did not meet the requirement.

In W.P. Tax & Accounting Group (Nov. 13, 2015), GAO reminded agencies that, in fixed-price procurements, below-cost pricing is not inherently improper and cannot serve as the basis for a technical unacceptability finding when the solicitation does not provide for a price realism evaluation. Because the solicitation in W.P. said nothing about a price realism evaluation, GAO overturned the agency's rejection of the low-priced vendor's quotation as technically unacceptable and recommended that the agency either reevaluate the vendor's quotation against the stated evaluation criteria or amend the solicitation to provide for a price realism evaluation.

In Satellite Tracking of People, LLC (Nov. 6, 2015), GAO sustained what it called a first-of-kind protest concerning a government program manager who had been recently employed by one of the competitors in the procurement. Because the CO had stated in writing prior to proposal submission that the program manager should recuse herself, yet never followed through to enforce the recusal, GAO concluded that a known conflict of interest concern had been left unresolved and, therefore, prejudice to the protester arising from this conflict must be presumed.

With the government's increased focus on price in the face of tightening budgets, GAO has also increased its focus on price evaluations by agencies. In recent weeks, disappointed offerors have successfully challenged (1) the Air Force's price reasonableness and price realism analysis in KWR Constr. Inc., (2) the VA's failure to meaningfully evaluate price realism—despite an express statement requiring it in the solicitation—in B&B Med. Servs., Inc., and (3) the Air Force's unequal treatment of the protester's labor rates when performing price realism analysis in Cubic Applications, Inc.

In Smith and Nephew Inc. (Jan. 2, 2015), publicly released this week, GAO sustained a pre-award solicitation protest alleging that the VA had unduly restricted competition with an unnecessary specification requirement. GAO concluded that the "minimum fluid absorption rate" for medical bandages demanded by the VA was not based on any demonstrable agency need, was predicated on one repudiated test study by a single contractor, and could not be met by any commercially available product in the marketplace.

In Kingdomware Techs., Inc. v. U.S. (June 3, 2014), a majority of a Federal Circuit panel held that the language of the Veterans Act stating that the VA "shall award contracts on the basis of competition restricted to small business concerns owned and controlled by veterans" whenever the VA identifies two or more viable competitors was not actually a mandatory requirement, but could be used or not by the VA to meet its annual goals for contract awards to Veteran-Owned Small Businesses (VOSBs) and Service-Disabled Veteran-Owned Small Businesses (SDVOSBs). The dissenting judge, agreeing with the contrary interpretation of GAO, argued Congress had made the provision mandatory so that the VA would meet its goals.

In WHR Group, Inc. v. U.S. (Apr. 8, 2008), the Court of Federal Claims set aside an agency's "corrective action" terminating three blanket purchase agreements for employee relocation services because that action was not narrowly tailored to address the flaw in the underlying procurement. While the agency cited a laundry list of reasons for why it believed termination and reprocurement was necessary, Judge Block rejected nearly all of them and, as to the one issue that legitimately raised a concern about the prior evaluation, he concluded that a reevaluation would address the problem without a full resolicitation.

In Coulson Aviation (USA) Inc.; 10 Tanker Air Carrier, LLC; Minden Air Corp. (Mar. 31, 2014), GAO agreed with protesters, including one represented by Crowell & Moring, that the U.S. Forest Service had unlawfully awarded a sole-source contract with a potential value of nearly $500 million. After extensive briefing and a two-day hearing, GAO found that the sole-source award was invalid because the true basis for award had been honoring a settlement agreement promise to award the contract and the Justification & Approval supporting the award both (i) improperly relied on the factually inapplicable "industrial base" exception to the full and open competition requirements of the Competition in Contracting Act and (ii) failed to identify the critical facts relevant to the award.

In Motorola Solutions, Inc. (Jan. 28, 2014), GAO created an exception to the longstanding rule that information provided to protester's counsel under a protective order creates attributable knowledge to the protester itself, starting the 10-day clock to file a protest. GAO held that, because there was significant evidence that the protester diligently pursued the information during and after the debriefing, protester's lawyers diligently sought release of the non-confidential information from under the protective so they could consult with their client, and these efforts were impeded by unwarranted agency delay, the timeliness of a supplemental protest should be measured from the time of disclosure to the client because GAO will not allow the agency to "unfairly to benefit from its own dilatory behavior" and effectively run out the clock on prospective supplemental protest grounds.

In Croman Corp. v. U.S. (July  31, 2013), the Federal Circuit upheld the reasonableness of an agency's corrective action after expanding the protestor's argument into a "bad faith" allegation. When the protestor complained that the cancellation of several CLINs was without a rational basis and put forward evidence that indicated the agency's rationale was pretextual, instead of requiring the agency to put forward proof to support its stated rationale, the court relabeled the challenge as a "bad faith" allegation, which it held the protestor had not shown by clear and convincing evidence.

In Esegur-Empresa de Segurança, SA (April 26, 2013), GAO held that the solicitation statement that "unrealistically . . . low . . . prices may serve as a basis for rejection of the proposal" alone created a presumption that the agency would in fact conduct a price realism evaluation of whether proposed prices are too low, even though the solicitation did not say such an evaluation would be conducted, and the agency's failure to do so therefore required that the protest of the awardee's low price award must be sustained. If agencies prophylactically include such language warning against "too low" prices in "low cost technically acceptable" solicitations, disappointed offerors may have a ready-made protest if no realism analysis is performed, but, if agencies do not include such language, they may be required to award to high risk offerors who do not understand the requirements.

In Insight Sys. Corp. v. U.S. (May 6, 2013), Judge Allegra of the CFC concluded that the FAR's "Government Control" exception to the "Late Is Late" doctrine can apply to electronic mail as well as paper submissions, even though the FAR does not specifically address electronic submissions. When an e-mail is received by an initial government server before the submission deadline, that e-mail is considered timely "received," even when a malfunction of the internal e-mail delivery system causes the e-mail not to be delivered to the Contracting Officer until after the deadline.

In Nexant, Inc (Jan. 30, 2013), GAO sustained the protest of Nexant, Inc., represented by Crowell & Moring, to the award of a clean energy consulting contract by USAID, finding that USAID engaged in misleading discussions, based its evaluation on a flawed methodology that led to numerous unreasonable evaluation conclusions, and did not reasonably explain its basis for choosing the awardee's higher cost proposal. While GAO ultimately declined to rule on the issue of what weight it should afford to a source selection decision document (SSDD) drafted after both contract award and the filing of a protest, it did note that there is "a reasonable concern" whether such an after-the-fact SSDD can accurately represent the fair and considered judgment of the agency.