August 28, 2019

Government Accountability Office Modernizes Written Decisions on Procedural Issues

11 min

In the past few years, Congress has demonstrated a heightened interest in the bid protest process, seeking to identify how legislative amendments to bid protest procedures could improve the efficiency of the procurement process, prevent frivolous protests that create a bottleneck on contract awards, and generally advance procurement outcomes for the federal government (and those companies that choose to contract with federal agencies). Within the context of this recent focus on bid protest reform, the Government Accountability Office (GAO) has renewed its attention to the procedures for adjudicating bid protests, publishing several decisions over the last year that substantively address the merits of procedural issues. The GAO's decision to modernize its guidance on such procedural issues is opportune, as a number of the relevant decisions were published decades ago—dating back to the 1970s and 80s.

Overview of Bid Protest Procedures at the GAO

Congress authorizes bid protests in three separate forums: (1) the procuring agency, (2) the GAO, and (3) the U.S. Court of Federal Claims (COFC). These adjudicating bodies share some important similarities. For example, a company must meet the same definition of "interested party" to file a valid protest in any of the three forums. However, the applicable legal procedures and available remedies vary considerably. See generally Government Contract Bid Protests: Analysis of Legal Processes and Recent Development, Congressional Research Service (Nov. 28, 2018), available at https://fas.org/sgp/crs/misc/R45080.pdf.

Generally, protests before the procuring agency or the GAO are resolved faster and more economically than challenges before the COFC because they are subject to specific resolution timetables and less formal procedures. Additionally, filing a protest with the procuring agency or the GAO generally provides the protester with the benefit of an "automatic stay," which bars the agency from awarding or implementing a contract while a protest is pending. In contrast, while filing a protest at the COFC is frequently more time-consuming and expensive and does not trigger an automatic stay, protests before the COFC result in legally binding, final judicial decisions and orders. Thus, parties must navigate a number of strategic decisions prior to ever filing a protest in any one of the three forums.

Federal law generally requires protests before the GAO to be "inexpensive and expeditious," 31 U.S.C. § 3554(a)(1), and the regulations establish strict time limits for filings by the parties and rulings by the GAO. GAO protests normally must be filed within 10 days of the time by which the violation "is known or should have been known." 4 C.F.R. § 21.2(a)(2). In most cases, absent extenuating circumstances, the GAO will dismiss untimely protests. The GAO also will dismiss protests that raise issues that are outside of the GAO's statutory jurisdiction, or where any party files a corresponding protest of the same procurement at the COFC.

The GAO is required to inform the relevant agency of a protest within one day of the protest being filed. 4 C.F.R. § 21.3(a). This notice typically triggers a 30-day window for the procuring agency to respond via filing an agency report and memorandum of law, unless the GAO provides an extension (which typically is granted where requested). Id. § 21.3(c). Additionally, where a protective order is sought, the GAO requires the protester to file a redacted version of their protest within one day of filing, putting potential intervenors on notice of the proceedings. Id. § 21.1(g).

Upon reviewing the protest and document requests, the procuring agency generally must provide the GAO and the protestor with all documents "relevant" to the protest for the GAO's consideration. Id. § 21.3(d). The GAO generally has 100 days from the day on which the protest was originally filed to issue a recommendation in a matter, although it may also consider protests pursuant to an "express" proceeding for cases that the GAO determines may feasibly be resolved within 65 days. Id. § 21.9.

Overview of the GAO's Renewed Emphasis on Procedural Issues

An interested party seeking to file a protest (or intervene) at the GAO may face several questions about the process, including how to determine whether the GAO has jurisdiction to resolve a particular issue, whether a party is an "interested party" to the protest, the timeliness of protest grounds, whether intervention is allowed, and issues arising out of protective order disputes. Although these questions are addressed in the GAO's governing statutes and regulations, because the GAO's written decisions on such procedural issues are relatively sparse (partly because of the GAO's efforts to resolve protests as efficiently as possible), contractors and their counsel are often limited to severely dated case law interpreting those requirements. Perhaps recognizing this deficiency, the GAO has recently sought to issue an increasing number of written decisions on such procedural issues.

A. Jurisdiction

The GAO's jurisdiction to decide bid protests is relatively broad, but not unlimited. For example, the GAO cannot review bid protests of task or delivery orders under a multiple-award contract issued by civilian or Department of Defense agencies, unless certain monetary thresholds or other exceptions are met. See 41 U.S.C. § 4106(f); 10 U.S.C. § 2304c(e). Similarly, certain timeliness requirements are jurisdictional (more on this below). Finally, the GAO's bid protest regulations set forth various "protest issues not for consideration," including (among others) issues relating to contract administration; matters more appropriately decided by the Small Business Administration (SBA); contracting officers' affirmative responsibility determinations; alleged violations of procurement integrity (except where timely first reported to the agency for resolution); subcontract protests; suspensions and debarments; and competitive range protests. See 4 C.F.R. § 21.5.

The GAO has recently issued several opinions expounding upon its jurisdiction to hear protests. For example, in Adams and Associates Inc., B-417534, June 4, 2019, 2019 CPD ¶ 208, the GAO found that it lacked jurisdiction to consider a protest of a task order solicitation where the task order's value, excluding the value of an option period, fell below the $10 million threshold. See id. at 4 (noting that because the solicitation did not call for vendors to price—or the agency to evaluate—the option, the value of the option could not be considered for jurisdictional purposes). Similarly, the GAO recently provided renewed guidance on certain "protest issues not for consideration," as set forth in its regulations, declining to exercise jurisdiction over a protest ground in Arch Systems, LLC, B-417567, July 2, 2019, 2019 CPD ¶ 227. In that case, the GAO concluded that it could not evaluate the agency's discretion to decline an option period, as such decision was a matter of contract administration. See id. at 3. The GAO thus dismissed the protest, albeit with a full five-page decision.

Finally, in a recent decision affecting several protests filed with respect to the LOGCAP V procurement, the GAO confirmed that it will dismiss a protest where another is filed at the COFC. See AECOM Management Services, Inc.; Fluor Intercontinental, Inc.; PAE-Parsons Global Logistics Services, LLC, B-417506.2 et al., Aug. 7, 2019, 2019 WL 3729627. There, the GAO emphasized that "[o]ur Bid Protest Regulations provide that we will not decide a protest where the matter involved is the subject of litigation before a court of competent jurisdiction," and clarified that "[e]ven where the issues before the court are not the same as those raised in our Office by the protester, or are brought by a party other than the protester, we will not consider the protest if the court's disposition of the matter would render a decision by our Office academic." See id. at 5 (citing 4 C.F.R. § 21.11(b)). The dismissal of the GAO protest was controversial, as the protest involved an $82 billion U.S. Army logistics contract and the dismissal came just two days before the GAO's decision was due. Interestingly, the COFC has since requested that the GAO issue an advisory opinion which, "while nonbinding, would be of assistance in reviewing issues now before the court." See AECOM Mgmt. Servs. Inc. v. United States, Fed. Cl. No. 19-cv-1176, Dkt. No. 22 (Aug. 13, 2019). Thus, although it has lost jurisdiction over the protest, the GAO might have a say in the final adjudication after all.

B. Interested Party

The GAO's bid protest regulations define an "interested party" as "an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of a contract or by the failure to award a contract." 4 C.F.R. § 21.0(a)(1). Some of the GAO's recent decisions have sought to clarify the connection between the "direct economic interest" requirement for standing and the requirement that protesters demonstrate competitive prejudice. For example, in Daekee Global Company, Ltd., B-414899, B-414899.2, Oct. 10, 2017, the GAO found that the protester was not an "interested party" to the protest, where it was the apparent awardee. Id. at 4. The GAO concluded that the protester "is not an interested party to challenge the terms of the solicitation because we discern no competitive prejudice." Id. Thus, where the agency intended to award a contract to the protester under a multiple-award contract, the protester could not establish standing even though the agency was not legally obligated to make an award beyond the guaranteed minimum of $3,500 and a fair opportunity to be considered for future task orders. See id. at 5.

C. Timeliness

As referenced above, timeliness is often a jurisdictional issue at the GAO, and failure to meet the applicable requirements can be fatal to a protest. The GAO has published several recent decisions discussing timeliness issues, and further explaining how protesters can become ensnared in procedural issues that divest the GAO of jurisdiction. For example, in HEJV Energetics Joint Venture, LLC – Costs, B-413104.39, Aug. 5, 2019, 2019 WL 3543665, the GAO dismissed the protester's request for costs where the request was filed more than fifteen days after the date on which the protester learned that GAO had closed the protest because of the agency's taking corrective action. Id. at 3-4; see also AeroSage, LLC – Costs, B-417289.8, Aug. 2, 2019, 2019 WL 3527194 (failure to file timely comments results in dismissal of cost request). The GAO further stipulated that filings must be made on the GAO's Electronic Protest Docketing System (EPDS), and that "[d]elivery of a protest or other document by means other than those set forth in the online EPDS instructions does not constitute a filing." See id. at 3 (quoting 4 C.F.R. § 21.0(g)).

In Asahi General Trading & Contracting Company, B-417650, July 24, 2019, 2019 CPD ¶ 263, the GAO rejected a protester's excuse that they were "Kuwaiti businessmen, not lawyers" as a reason for untimely filing, dismissing the protest outright. Id. at 3. Similarly, in Fisher Sand & Gravel Company, B-417496, July 26, 2019, 2019 WL 3493828, the GAO found a supplemental protest to be untimely when based on information disclosed to protester before it received the agency report. Id. at 10-11. These decisions serve as a warning to contractors that the GAO takes timeliness issues seriously and will not hesitate to dismiss a protest for failure to meet the specified requirements.

D. Intervention

Generally, if the award has been made, the GAO permits only the awardee to intervene. If the award has not been made, the GAO will consider a request to intervene from a bidder or offeror who appears to have a substantial prospect of receiving an award if the protest is denied. However, permitting intervention in a pre-award protest is generally the exception, not the rule. See Bid Protests at GAO: A Descriptive Guide, 10th ed. (May 2018), available at https://www.gao.gov/assets/700/691596.pdf.

The GAO has recently issued decisions clarifying these rules. For example, in Vistronix, LLC, B-416916.2, July 29, 2019, 2019 CPD ¶ 268, the GAO issued a written decision explaining why it had rejected another offeror's request to intervene. In that case, the GAO clarified that "where an offeror protests its exclusion from the competitive range, we have generally admitted intervenors only in limited circumstances, such as where the intervenor was the only other offeror, where an agency established a competitive range including only one offeror, or where the intervenor was the apparent awardee." Id. at 4.

Similarly, the GAO recently elaborated on a party's right to intervene in AeroSage, LLC – Reconsideration, B-417138.5, Apr. 12, 2019, 2019 CPD ¶ 146. In that case, the protester argued that potential intervenors were aware of its protest grounds because the GAO's "Bid Protest Regulations require[ ] other offerors to be advised of the protest and these offerors could have intervened in the protest," and "bid protest records are 'open to public review.'" Id. at 4. GAO rejected this argument, explaining that "the EPDS docket is viewable only by parties to a protest." Id. Thus, only those parties that actually seek to intervene—and whose request is granted (and further where that party is admitted to a protective order, to the extent one was issued)—are able to view entries on a bid protest docket.

E. Protective Orders

The GAO has also recently weighed in on protective order disputes, issuing written decisions adjudicating disagreements between parties regarding whether admission of counsel (or consultants) is warranted. In Enterprise Services, LLC, B-417329, B-417329.2, May 30, 2019, 2019 CPD ¶ 205, for example, the GAO discussed at length the parties' arguments concerning protester's counsel's admission to the protective order. The intervenor argued that protester's counsel had violated certain conflicts rules under the District of Columbia Rules of Professional Conduct, and that "the alleged violations showed an inability to comply with the types of obligations required under [GAO's] protective order." Id. at 5.

The GAO rejected the intervenor's arguments, reasoning that because the intervenor had not filed a complaint with the District of Columbia Office of Disciplinary Counsel, a determination by the GAO as to the conduct of protester's counsel would be speculative. GAO concluded: "[O]ur office does not adjudicate allegations related to attorney rules of professional conduct, and would not deny the application based on the intervenor's objection." Id.

Takeaways for Federal Government Contractors

The GAO should be commended for its efforts to modernize its guidance on procedural issues. However, federal government contractors must be aware that the GAO's renewed focus on clarifying bid protest procedures may mean that the GAO will publish decisions on issues that are regularly thought of as "closed-door" or one-line protest decisions—such as decisions on jurisdiction, interested-party status, timeliness, intervention, protective orders, and other procedural disputes. Contractors should seek the advice of counsel prior to filing a bid protest, to ensure compliance with such procedural rules.