Bid Protest Spotlight: Debriefings, Timeliness, Documentation

This article is part of a monthly column that provides takeaways from recent bid protest cases. In this installment, we highlight decisions from the U.S. Court of Appeals for the Federal Circuit, the U.S. Government Accountability Office and the U.S. Court of Federal Claims.

In its decision in Oak Grove Technologies LLC v. U.S., the U.S. Court of Appeals for the Federal Circuit clarifies the deadline by which an offeror may challenge an agency's decision not to conduct discussions in certain procurements.

The U.S. Government Accountability Office decision in Matter of Ecology Mir Group LLC illustrates a common trap for the unwary with respect to the timeliness of protests of U.S. General Services Administration Federal Supply Schedule procurements subject to Federal Acquisition Regulation Subpart 8.4.

The U.S. Court of Federal Claims decision in RTD Middleburg Heights LLC v. U.S., addresses the importance of contemporaneous documentation to the court's ability to find a price evaluation rational.

Oak Grove Technologies

The Federal Circuit's Sept. 11 decision in Oak Grove Technologies reversed the Court of Federal Claims on multiple grounds. The decision is interesting for various reasons, including the fact that it upheld sanctions that the lower court imposed on the government for a defective record production. Of interest here, though, is the Federal Circuit's holding on the timelines applicable to an offeror's challenge of an agency's decision not to hold discussions.

The procurement at issue had a ceiling value of $245 million and was for training services for special forces. In response to a protest, in 2021 the Court of Federal Claims found that DFARS215.306(c)(1) creates a presumption in favor of discussions in covered procurements. Specifically, for Defense Department procurements conducted under FAR Part 15, DFARS215.306(c)(1) provides that for "acquisitions with an estimated value of $100 million or more, contracting officers should conduct discussions."

In the lower court's view, DOD agencies electing not to conduct discussions in such circumstances must document a sufficient basis for deviating from the general rule. The lower court found that the procurement record failed to provide a sufficient reason for foregoing discussions. Had there been discussions, the protester could have corrected the errors found in its own proposal.

The court sustained the protest on that basis, among others, and enjoined the award. The government and the awardee appealed.

On appeal, the Federal Circuit did not disagree with the protester's or the lower court's view on the meaning of DFARS 215.306(c)(1). Nor did it reverse the lower court's holding that this regulation creates a presumption in favor of discussions in covered procurements.

Without addressing those merits, however, the court of appeals noted that the solicitation expressly provided that the government did not intend to hold discussions, although it reserved the right to do so. The court further observed that the solicitation incorporated the provision at FAR52.215-1(f)(1). This provision states that an agency intends to award a contract without conducting discussions.

In light of these solicitation provisions, the court held that it was obvious to prospective offerors that the agency did not intend to hold discussions. But no offeror objected until after the award was announced.

Under the precedent of the 2007 Federal Circuit decision in Blue & Gold LP v. U.S., any prospective offeror aggrieved by the agency's obvious intent waived its right to complain if it did not protest before the receipt of proposals.

Because the protester here saved its objection until after award, the Federal Circuit found that the protester had waived its right to challenge the lack of discussions in this procurement. Thus, even if the agency violated DFARS215.306(c)(1), that was irrelevant to the protest.

The Federal Circuit also rejected the various other protest grounds that the Court of Federal Claims had found meritorious and vacated the lower court's judgment and injunction. The appeals court did, however, affirm the lower court's imposition of sanctions on the government for defects in its production of the administrative record.

Takeaways

In the years since the Court of Federal Claims decided the Oak Grove protest in 2021, more than one decision of the Court of Federal Claims has allowed post-award protests of a lack of discussions in solicitations that provided discussions might not occur. The Federal Circuit's new decision establishes a different rule.

Going forward, if a solicitation states that an agency reserves the right not to conduct discussions, and a prospective offeror thinks discussions should be held, its protest is due by the time set for proposal submission. A company is not permitted to sit on its rights and wait to object only after learning that it has not been awarded the contract.

This has been the GAO's rule all along. The Federal Circuit has now essentially aligned the court's rule with the GAO's. Prospective offerors should read solicitations for large Defense Department acquisitions carefully, and consider whether to object promptly if a covered solicitation appears inconsistent with DFARS 215.306(c)(1).

Ecology Mir Group

The GAO's Sept. 12 decision in Ecology Mir Group addresses a trap for the unwary in GSA Federal Supply Schedule, or FSS, procurements subject to FAR Subpart 8.4. It is a hazard that occurs frequently due to widespread confusion within the industry and agencies about the rules governing FSS orders.

On Aug. 16, the U.S. Department of the Navy informed Ecology Mir Group that it was unsuccessful in a competition conducted under FAR Subpart 8.4. The notice stated that the vendor's quotation was technically unacceptable. The vendor tried multiple times to learn the reason for this rating, but the agency refused to provide any further information.

In its final attempt to pry information from the reticent agency, the vendor threatened to bring in its attorneys. It told the agency that it thought the agency was delaying further information until the new order had begun performance to frustrate a bid protest. The vendor was probably right about that, as the agency kept its silence and watched the clock.

On Aug. 29, the vendor filed a protest with the GAO. Knowing nothing about the basis for its unacceptable rating, the vendor simply asserted that the rating was unreasonable. Three business days later, the agency requested summary dismissal of the protest as untimely.

The GAO agreed with the agency: Because the protester knew the entire basis of its protest, such as it was, by Aug. 16, its protest was due by 10 calendar days later - Aug. 26. Because the vendor missed its protest window by three days, the GAO dismissed the protest outright.

Readers may be surprised that the vendor's protest clock began running even though it had not received a debriefing. But this award was an FSS order under FAR Subpart 8.4. Under FAR Subpart 8.4, no vendor debriefings are required. The anemic "brief explanation" the agency provided was all that the law required.

Was the vendor's quotation rated unacceptable for a valid reason? It may never find out.

The agency's lack of transparency was poor procurement practice, but it was not illegal. And it did succeed in running out the GAO protest clock.

The frustrated protester might consider refiling its protest with the Court of Federal Claims, where there are no 10-day clocks and agencies have a more difficult time hiding information. But agencies are surely aware that most FSS vendors will not be interested in paying lawyers to file a bid protest at the Court of Federal Claims over an order that may have a relatively low value.

Takeaways

Pay close attention to which FAR authorities an agency is using to run a procurement. The rules governing FAR Subpart 8.4 FSS acquisitions differ in significant ways from other procurement authorities.

For protest purposes, the most salient differences are the lack of true debriefing rights and the absence of the GAO's debriefing exception to the ordinary protest deadlines. FSS vendors frustrated by uncommunicative agencies may wish to consider the Court of Federal Claims as an attractive alternative to the GAO in appropriate cases.

RTD Middleburg Heights

In RTD Middleburg Heights, the Court of Federal Claims considered whether the GSA's price evaluation was arbitrary and capricious for a lease procurement. Although the solicitation was released in 2019, the GSA did not award the lease until 2023. Then followed a series of protests and multiple rounds of corrective action - all centering on the GSA's repeatedly unsuccessful attempts to conduct a reasonable price evaluation.

In response to the latest protest, on Aug. 16 the Court of Federal Claims found that the price evaluation was not flawed in the way that the protester claimed. This holding rested in part on the court's recognition that an agency's cost/price estimate does not have to be calculated with "impeccable rigor." Courts recognize that agencies enjoy relatively broad discretion in conducting a cost or price analysis.

The court nevertheless found that the protester prevailed because the court was unable to determine how GSA determined the awardee's price. The protester demonstrated various apparent inconsistencies in the figures, where the price evaluation's connections to the awardee's proposal were not always apparent, and at times appeared to be in error or missing.

The court also noted that the record failed to include native Excel versions of the evaluation worksheets, which prevented the court itself from discerning how the awardee's price was calculated.

The government attempted to explain everything during oral arguments, but the court was "left to work out the math on its own," and the numbers did not appear to add up. Because the contemporaneous record was inadequate, the court found it necessary to remand the case for corrective action.

The court also found that the inadequate evaluation record prevented it from ruling on the protester's claims that GSA evaluated offerors' prices disparately. Because this too prevented effective adjudication of the case, the court remanded this protest ground for corrective action as well.

Takeaways

Evaluations of cost and price can be tedious to challenge, particularly when an agency's contemporaneous record is poorly documented and the agency has already had multiple opportunities to correct its errors. This decision is a useful example of how a protester can use an incomplete record to its advantage. And it is a warning to agencies that they should contemporaneously document everything and make sure their math adds up.

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