Federal Contracting Disputes: Do All Roads Lead to Rome? Part II
In the last part of this article, we considered the options for a contract claim and began to consider a bid protest. Recall that our hypothetical client Betty can take her bid protest to the Government Accountability Office (GAO) or to the Court of Federal Claims (COFC).
Betty is an interested party for purposes of standing. She bid on the Environmental Protection Agency (EPA) contract, her direct economic interest was affected by the failure of the EPA to award the contract to her company, and she should have had a substantial chance of receiving the EPA contract. Despite the agency’s decision to award the contract to Betty’s competitor, the interpretation of a contract or solicitation is a question of law, which the COFC reviews de novo.[1]
At the COFC, Betty will also have the benefit of the Federal Rules of Civil Procedure that apply to non-jury civil cases, which have been incorporated into the Rules of the United States Court of Federal Claims (RCFC).[2] These are supplemented by the “Procedure in Procurement Protest Cases Pursuant to 28 U.S.C. §1491(b),” found in Appendix C of the RCFC (Appendix C).[3] Appendix C sets forth the requirements for filing a bid protest at the COFC, including the need to file a 24-hour advance notice of the filing of the bid protest complaint to the Department of Justice (DOJ), Commercial Litigation Branch, Civil Division; the clerk of the COFC; the procuring agency’s CO; and the apparently successful bidder/offeror (in cases in which there has been an award and the plaintiff has received notice of the identity of the awardee).[4] Appendix C provides specific information that must be included in the pre-filing notice.
Importantly, if the successful bidder is permitted to proceed with the awarded contract, it could make any bid protest at the COFC futile.[5] For that reason, whether the plaintiff intends to seek injunctive relief and whether the plaintiff has discussed injunctive relief with the DOJ are among the items required to be included in the pre-filing notice.[6] Depending on circumstances, the DOJ may agree to voluntarily stay the award and the performance of the contract until the bid protest complaint is litigated. If not, a bid protester like Betty will need to seek injunctive relief.
After the complaint is filed and assigned to a COFC judge, the parties will participate in an initial status conference.[7] At that conference, the judge determines if the plaintiff is seeking injunctive relief, and if so, will conduct a hearing at the earliest possible time.[8] The apparently successful bidder/offeror is permitted to enter a notice of appearance on any hearing on an application for a temporary restraining order or preliminary injunction if it advises the court of its intention to move to intervene pursuant to RCFC 24(a)(2) or has moved to intervene before the hearing.[9]
At the initial status conference, in cases in which the plaintiff seeks injunctive relief, the judge will expect to discuss whether and to what extent, absent such relief, the court’s ability to afford effective final relief is likely to be prejudiced, and whether, and to what extent, the parties have discussed whether the government will agree to withhold the award or suspend performance of the contract pending the hearing on the motion for injunctive relief.[10]
Disclosure of Source Selection Information
Typically, as the case begins, the court will issue a protective order either on motion or at the court’s discretion. The protective order governs the treatment of protected information in the case, and each party seeking access to the information must file an “Application for Access to Information Under Protective Order” with the court.[11]
Without a bid protest from Betty, the EPA will not volunteer supporting documentation on the reasoning behind the agency’s choice to award the contract to Betty’s competitor.[12] Government agencies are in fact required to protect contractor bids, proposal information, and source selection information from disclosure to unauthorized persons.[13] Thus, it is only after a bid protest is filed that a bidder has the opportunity to see the documents that might reveal the government’s errors in the bidding process. The bid protest process means that at least some of the source selection information can be reviewed, material that, without litigation, Betty will not see.[14]
However, Betty is likely to, at least initially, see much more of the EPA’s documentation by filing her bid protest at the COFC than she is at the GAO.[15] A bid protest at the COFC means that the United States will be required to identify and provide the administrative record as promptly as possible, particularly those items that the COFC has designated as “core” documents relevant to the protest case.[16] This list of core documents related to the agency’s procurement request can be extensive, including the agency’s source selection plan; records of discussions; other interested parties’ offers, proposals, or other responses to the solicitation; the agency’s competitive range determination and other supporting documentation.[17] The list of recommended core documents, however, is not intended to be exhaustive.[18]
A protester is entitled to an administrative record that contains all relevant information on which the agency relied or allegedly should have relied in making the challenged decision.[19] The COFC has, at times, granted protester’s motions to supplement the administrative record, particularly where relevant information would not likely be found in the administrative record, such as where there may be outside evidence of bad faith.[20] Although the scope of the court’s review is the administrative record, i.e., what was before the decision-maker when the bid was awarded, the court has permitted extrinsic evidence directed at matters beyond the administrative record that address prejudice, injunctive relief, or remedies, generally.[21]
Under RCFC 52.1, the parties typically file cross-motions for judgment on the administrative record. While hearings at the GAO are fairly rare, the COFC will typically hold a hearing for the parties to present oral argument on their motions for judgment on the administrative record. This is another advantage for Betty in bringing her bid protest to the COFC, where a hearing can be an opportunity to persuade the judge that Betty’s company was treated unfairly, or that an error in the process caused prejudice to her company.
Available Remedies
The COFC “may award any relief that the court considers proper, including declaratory and injunctive relief except that any monetary relief shall be limited to bid preparation and proposal costs.”[22] In order for Betty to have the award reversed, the court must agree that the decision by the EPA to award her competitor the contract was unlawful and must be set aside as “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.”[23] This is a “highly deferential” standard that requires the court to sustain the EPA’s decision if it determines that the agency acted rationally and considered relevant factors.[24] Though “searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency.”[25]
Importantly, if Betty can show that the EPA’s decision “involved a violation of regulation or procedure,” the court would have a second ground for setting aside the procurement decision.[26] For that ruling, Betty must show that there was a “clear and prejudicial violation of applicable statutes or regulations.”[27] In any case, even if the court decides that the agency was arbitrary and capricious in its decision, or that there has been a clear and prejudicial violation of statutes or regulations, the court has discretion as to whether to set aside the contract.[28] Betty will, therefore, want to seek a permanent injunction so that performance on the contract will not proceed. For a permanent injunction, Betty must show 1) she has succeeded on the merits; 2) she will suffer irreparable harm if such relief is not granted; 3) the balance of the hardships tips in her favor; and 4) an injunction will serve the public interest.[29]
Bid Protests at the GAO
Betty has the option to bring her protest to the GAO.[30] The GAO is an independent, nonpartisan government agency that works for Congress.[31] The GAO’s procedures on bid protests are set forth at 4 C.F.R. Part 21 and in 48 C.F.R. §33.104.[32] While the GAO may offer a more streamlined, and possibly less expensive approach to a bid protest than one at the COFC, the GAO’s decision is merely a nonbinding recommendation to the agency.[33] Nevertheless, there are times when submitting a bid protest to the GAO may be the place to start.
Three, Five, and 10
Timeframes are strict for a GAO bid protest, which must issue its decision within 100 days unless the GAO decides the case under the 65-day express option schedule.[34] Although Betty can try to have informal discussions with the CO as to why it awarded the contract to some other entity, she is better served by asking for a formal debriefing, in which the agency must furnish the basis for its contract award. The EPA is required to provide this debriefing to Betty, but only if she requests it in writing within three calendar days of receiving notice that the contract was awarded to her competitor.[35] The debriefing is supposed to take place within five days after receipt of Betty’s request.[36] A bid protest can be dismissed if it is filed prior to the debriefing date offered to the protester where the protest involves a procurement conducted on the basis of competitive proposals and a debriefing is required by law (if requested).[37]
The debriefing should include the agency’s evaluation of significant weaknesses or deficiencies in Betty’s proposal, if applicable; the overall evaluated cost or price and technical rating of both the successful awardee and Betty, and past performance information on Betty; the overall ranking of all the offerors, when any ranking was developed by the agency during the source selection; a summary of the rationale for the award to Betty’s competitor; and reasonable responses to relevant questions about whether the agency followed the source selection procedures contained in the solicitation and other applicable regulations.[38] If Betty poses certain questions to the agency for which it requires more time to respond, the debriefing may be extended.[39]
Betty must file a bid protest within 10 calendar days from when she knew or should have known that she did not receive the award.[40] However, if Betty’s competitor begins performance of the awarded contract, Betty may not be able to secure a meaningful remedy for the agency’s errors. Betty may, therefore, want performance of the contract to be suspended under an automatic stay available pursuant to the Competition in Contracting Act (CICA).[41] Once again, however, Betty must adhere to a strict timeframe.
The CO “shall immediately suspend performance or terminate the awarded contract” when the agency has received notice of a protest from the GAO within 10 days after contract award or within five days after a debriefing date offered to the protester for any required debriefing, whichever is later.[42] In other words, if Betty wants a CICA stay imposed, her bid protest must be filed within five calendar days of her requested and required debriefing or within 10 calendar days of the contract award, as long as the GAO has notified the agency.[43]
Many consider the CICA stay to be an advantage of filing a bid protest at the GAO.[44] Still, since the requirement for a CICA stay is not triggered until the GAO provides notice of the protest to the contracting agency, and the GAO has up to a day to provide the required notice, Betty would need to be sure to file her protest in advance of the filing deadline to ensure that the GAO would have sufficient time to notify the contracting agency. While questions arising out of a debriefing may lead to a tolling of certain deadlines for filing the bid protest, e.g., when a disappointed offeror needs to wait for reasonable responses to relevant questions about whether source selection procedures set forth in the solicitation were followed, this is not guaranteed. In one case, the disappointed offeror filed its bid protest more than a month after the close of its debriefing when it received confirming information supporting its allegations from the agency.[45] The GAO found that the bases for the bid protest were knowable or should have been knowable at the time the protester received its debriefing and dismissed the protest due to missed deadlines.[46]
Filing the Bid Protest
Assuming that Betty has timely asked for the debriefing and she has decided to move ahead with her protest, she must put her protest in writing and deliver it to the GAO.[47] The protest needs to include her name, address, email address, and contact information; be signed by Betty or her representative; identify the agency and the solicitation or contract number; set forth a detailed statement of the legal and factual grounds of protest including copies of relevant documents; set forth all information establishing that Betty is an interested party for the purpose of filing the protest; set forth all information establishing the timeliness of the protest; specifically request a ruling by the U.S. comptroller general; and state the form of relief requested.[48] With her protest, Betty may also request a protective order, request specific documents, and request a hearing,[49] and she must furnish a complete copy of her protest, including the attachments, to the CO at the relevant agency.[50]
After Betty’s protest is filed, the GAO must let the agency know of it within one day, and the agency must then let the winning awardee know of the protest.[51] The agency has 30 days after receiving notice of the protest to file its report on the protest.[52] If Betty has asked for specific documents, at least five days before the agency files its report it must file a response to Betty’s document request, including whether the documents exist; which of the documents the agency will produce; which of the documents the agency intends to withhold; and the basis for the agency’s withholding of any requested documents.[53] Betty has two days after receiving the agency’s response to her document request to object to the agency’s proposed disclosure.[54]
The agency’s report must include the CO’s statement of relevant facts, a memorandum of law, and all relevant documents not previously produced, including the bid or proposal submitted by the protester; the bid or proposal of the firm that was awarded the contract; all evaluation documents; the solicitation, including the specifications; the abstract of bids or offers; and all other relevant materials.[55]
Betty can ask for additional documents within two days after she receives the agency’s report, and the agency must file the requested documents within two days or explain why it does not need to produce the documents.[56] The GAO can decide whether the agency must file any withheld documents upon a request filed by a party.[57] Betty must file comments on the agency report within 10 days of the agency’s filing of the report, unless the GAO has granted an extension of time or established a shorter time frame.[58] Betty must file comments on the report within the timeframe or her protest will be dismissed, and the GAO will dismiss any protest allegation or argument in which the agency’s report responds to the allegation or argument, but Betty’s comments fail to address that response.[59]
Remedies at the GAO
If the GAO determines that the award to Betty’s competitor does not comply with statute or regulation, and it prejudiced Betty, then it will sustain the protest.[60] The GAO will then recommend that the agency implement any combination of the following: 1) refrain from exercising options under the contract; 2) terminate the contract; 3) recompete the contract; 4) issue a new solicitation; 5) award a contract consistent with statute and regulation; or 6) such other recommendations as the GAO determines necessary to promote compliance.[61] When the GAO has recommended corrective action and the agency has not fully implemented the recommendation, CICA requires that the agency report that to the comptroller general within 60 days.[62] The comptroller general then must report to Congress on each instance in which the agency has declined to implement the recommendations.[63]
Appeal of GAO Decision to COFC
Betty, or for that matter any intervenor or agency involved in the GAO bid protest, can request reconsideration of the GAO’s decision.[64] A request for reconsideration must contain a detailed statement of the factual and legal grounds upon which reversal or modification of the decision is warranted, specifying any errors of law made or information not previously considered.[65] Betty must file any request for reconsideration within 10 days “after the basis for reconsideration is known or should have been known, whichever is earlier.”[66]
As mentioned previously, however, Betty can take a second bite at the apple. She can appeal to the COFC, whose review will consider the agency’s decision, not the GAO recommendation.[67] Nonetheless, while the GAO decision is an advisory opinion and is not binding on the COFC, it is made a part of the administrative record before the court and “in view of the expertise of the GAO in procurement matters, [the] court may rely upon such decision for general guidance to the extent it is reasonable and persuasive in light of the administrative record.”[68] Where the agency has changed its conduct based on the GAO’s recommendation, the COFC will review both the GAO decision and the agency decision.[69]
Rome Wasn’t Built in a Day
As with all things legal, there are numerous factors to consider before choosing where to pursue a dispute involving a federal government contract. Careful attention must be paid to deadlines, strategy, expense, and goals. In many cases, but not all, the culmination of a thorough analysis will lead to the door of the Court of Federal Claims.
[1] NVT Techs., Inc. v. United States, 370 F.3d at 1159.
[2] See R. Ct. Fed. Cl. (through Aug. 3, 2020).
[3] Id., Appendix C.
[4] Failure to provide the pre-filing notice will not preclude filing of the case, but may delay the initial processing of it, including the scheduling of the initial status conference.
[5] Unlike a bid protest at the GAO, where an automatic stay of the contract awarded is possible under the Competition in Contracting Act (CICA), a plaintiff must seek a temporary or preliminary injunction at the COFC, and in some cases, a temporary restraining order.
[6] DOJ counsel represents the government agency at the COFC.
[7] R. Ct. Fed. Cl., App. C, ¶IV.
[8] R. Ct. Fed. Cl., App. C, ¶¶IV(8);V(9).
[9] R. Ct. Fed. Cl., App. C, ¶V(12). Although not within the scope of this article, if you represent Betty’s competitor, you would be well advised to intervene in Betty’s bid protest.
[10] R. Ct. Fed. Cl., App. C, ¶V(15).
[11] R. Ct. Fed. Cl., App. C, ¶VI(16-18).
[12] If Betty requests a debriefing, the EPA will discuss Betty’s ranking and proposal, but will not provide details on the successful competitor’s proposal.
[13] 48 C.F.R. §3.104-4.
[14] 48 C.F.R. §2.101: “Source selection information means any of the following information that is prepared for use by an agency for the purpose of evaluating a bid or proposal to enter into an agency procurement contract, if that information has not been previously made available to the public or disclosed publicly: (1) bid prices submitted in response to an agency invitation for bids, or lists of those bid prices before bid opening; (2) proposed costs or prices submitted in response to an agency solicitation, or lists of those proposed costs or prices; (3) source selection plans; (4) technical evaluation plans; (5) technical evaluations of proposals; (6) cost or price evaluations of proposals; (7) competitive range determinations that identify proposals that have a reasonable chance of being selected for award of a contract; (8) rankings of bids, proposals, or competitors; (9) reports and evaluations of source selection panels, boards, or advisory councils; (10) other information marked as ‘Source Selection Information-See FAR 2.101 and 3.104’ based on a case-by-case determination by the head of the agency or the contracting officer, that its disclosure would jeopardize the integrity or successful completion of the federal agency procurement to which the information relates.”
[15] At the GAO, the protester files a request for documents and the agency files a response. The agency’s response must identify whether the requested documents exist, which of the requested documents or portions of the documents the agency intends to produce, which documents or portions of documents the agency intends to withhold, and the agency’s basis for not producing the requested documents. The protester must object to the scope of the agency’s proposed disclosure or nondisclosure within two days of the agency’s response to the protester’s document request. Once the agency files its required report on the bid protest, the protester can request additional documents when their existence or relevance first becomes evident, but any request for additional documents must be filed not later than two days after their existence or relevance is known or should have been known, whichever is earlier. See 4 C.F.R. §21.3.
[16] R. Ct. Fed. Cl., App. C, ¶VII.
[17] Id.
[18] Agencies are required to certify the administrative record and file it with the court. See RCFC Rule 52.1(a).
[19] MG Altus Apache Co. v. United States, 102 Fed. Cl. 744, 752 (2012) (“The [administrative record] should contain all relevant information on which the agency relied or allegedly should have relied in making the challenged decision.”).
[20] See, e.g., Starry Assocs., Inc. v. United States, 125 Fed. Cl. 613, 621-22 (2015) (“As this court has recognized on several occasions, ‘rare indeed would be the occasions when evidence of bad faith will be placed in an administrative record.’…Courts have therefore ‘traditionally considered extra-record evidence in assessing alleged bias or bad faith.’” (internal citations omitted)).
[21] Ashbritt, Inc. v. U.S., 87 Fed. Cl. 344 (2009) (“[I]t is appropriate to add evidence pertaining to prejudice and the factors governing injunctive relief to the record in a bid protest — not as a supplement to the [administrative record], but as part of this Court’s record.”).
[22] 28 U.S.C. §1491(b)(2).
[23] 28 U.S.C. §1491(b)(4); 5 U.S.C. §706(2)(A).
[24] Advanced Data Concepts, Inc. v. U.S., 216 F. 3d 1054 (Fed. Cir. 2000) (citing Bowman Transp., Inc. v. Arkansas–Best Freight Sys., Inc., 419 U.S. 281, 283 (1974).
[25] Supreme Foodservice GmbH v. United States, 109 Fed. Cl. 369 (2013) (quoting Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971)).
[26] Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001).
[27] Id. at 1333.
[28] See PGBA, LLC v. U.S., 389 F.3d 1219, 1226 (Fed. Cir. 2004) (holding that in a bid protest action, the court is not automatically required to set aside an arbitrary, capricious, or otherwise unlawful contract award).
[29] Gentex Corp. v. United States, 58 Fed. Cl. 634, 654 (2003) (citing Bean Stuyvesant, L.L.C. v. United States, 48 Fed. Cl. 303, 320-21 (2000)).
[30] 4 C.F.R. §21.0(a)(1). In challenges of the evaluation of proposals and the award of contracts, this is interpreted to mean an offeror that would potentially be in line for award if the protest were sustained. See Bid Protests At GAO: A Descriptive Guide (10th ed. 2018) [hereinafter GAO-18-510SP].
[31] The GAO’s role is to examine how taxpayer funds are spent, and it is tasked with providing Congress and federal agencies with objective and reliable information with the purpose of helping the government save money and work efficiently. See U.S. GAO, About Us, https://www.gao.gov/about/.
[32] If guidance in 48 C.F.R. §33.104 conflicts with 4 C.F.R. Part 21, 4 C.F.R. Part 21 governs.
[33] 4 C.F.R. §21.8.
[34] 4 C.F.R. §§21.9(a), (b).
[35] 48 C.F.R. §15.506; FAR 33.104(c)(1); 41 U.S.C. §3704(a).
[36] 41 U.S.C. §3704(b).
[37] 4 C.F.R. §21.2(a)(2).
[38] 48 C.F.R. §15.506(d).
[39] 41 U.S.C. §3704(c)(6) (requiring post-award debriefings to include “reasonable responses to relevant questions posed by the debriefed offeror as to whether source selection procedures set forth in the solicitation, applicable regulations, and other applicable authorities were followed by the executive agency”); FAR 15.506(d)(6) (same, with respect to “[r]easonable responses to relevant questions about whether source selection procedures contained in the solicitation, applicable regulations, and other applicable authorities were followed”). See also, e.g., State Women Corp., B‑416510, July 12, 2018, 2018 CPD ¶240 (addressing the Army’s obligations pursuant to Department of Defense Class Deviation 2018-O0011 — Enhanced Post Award Debrief Rights); Harris IT Servs. Corp., B-406067, Jan. 27, 2012, 2012 CPD ¶57 (finding that debriefing was extended where the agency addressed additional questions without indicating that it believed the debriefing to be concluded). However, if a debriefing is not a required debriefing, the tolling of GAO deadlines may not take place. See, e.g., Centerra Integrated Facilities Services, LLC, B-418628, Apr. 23, 2020.
[40] 4 C.F.R. §21.2(a)(2).
[41] 41 U.S.C. 253.
[42] 48 C.F.R. §33.104(c)(1). A debriefing is required by regulation generally in negotiated procurements conducted under the FAR part 15 (48 C.F.R. §15.506).
[43] 48 C.F.R. §33.104(c)(1).
[44] Yet, as noted previously, Betty can move for a temporary injunction at the COFC as well, leading to a hold on the government’s award of the contract.
[45] See CDO Technologies, Inc., B-416989, Nov. 1, 2018.
[46] Id.
[47] 4 C.F.R. §21.1(b). In 2018, procedures for electronic filing of all bid protests were instituted and are mandatory. Because there is a requirement for an electronic filing account at the GAO, protesters should be sure to have set one up in a timely fashion so as not to impact filing deadlines.
[48] 4 C.F.R. §21.1(c).
[49] Hearings are rare at the GAO and Betty must make her case for the necessity of one.
[50] 4 C.F.R. §21.1(c).
[51] 4 C.F.R. §21.3(a).
[52] 4 C.F.R. §21.3(c).
[53] Id.
[54] Id.
[55] 4 C.F.R. §21.3(d).
[56] 4 C.F.R. §21.3(g).
[57] 4 C.F.R. §21.3(h).
[58] 4 C.F.R. §21.3(i)(1).
[59] 4 C.F.R. §21.3(i)(2)(3).
[60] 4 C.F.R. §21.8; GAO-18-510SP at 27 (GAO generally sustains protests where it determines that the agency violated procurement statutes or regulations, unless it concludes that the violation did not prejudice the protester).
[61] 4 C.F.R. §21.8(a).
[62] 31 U.S.C. §3554(b)(3).
[63] 31 U.S.C. §3554(e).
[64] 4 C.F.R. §§21.14(a).
[65] Id.
[66] 4 C.F.R. §§21.14(b).
[67] See Charles H. Tompkins Co. v. U.S., 43 Fed. Cl. 716, 718 (1999) (citing Analytical & Research Technology, Inc. v. United States, 39 Fed. Cl. 34, 41 (1997); Cubic Applications, Inc. v. United States, 37 Fed. Cl. 339, 341 (1997).
[68] Charles H. Tompkins Co., 43 Fed. Cl. at 718 (quoting Cubic Applications, Inc., 37 Fed. Cl. at 342)).
[69] Analytical & Research Tech., 39 Fed. Cl. at 41 n.7 (citing Honeywell, Inc. v. United States, 870 F.2d 644, 647 (Fed. Cir. 1989)).
Pamela G. Levinson is an attorney at Maglio Christopher & Toale and focuses her practice on government contracts litigation, takings, construction, and Indian law. She had the honor of being a federal law clerk to Judge Adalberto Jordan, U.S. District Court for the Southern District of Florida, now serving on the 11th Circuit Court of Appeals.
This column is submitted on behalf of the Business Law Section, Leyza Florin Blanco, chair, and Andrew Layden, editor.
