When You Come to a Fork in the Road Take It

Recent United States Court of Federal Claims ("COFC") Cases Highlight that the COFC and the Government Accountability Office ("GAO") Do Not View All Cases the Same

9 min

Though we are not yet halfway through 2022, the COFC has issued two decisions that highlight divergent views from GAO precedent regarding the availability of key personnel and whether there is a presumption that an Agency will conduct discussions in certain circumstances. While one Judge's opinion in a COFC case is not binding on the other Judges, these cases should be factored into a disappointed offeror's decision concerning where to file its bid protest at the outset, i.e., the GAO or the COFC.

Availability of Key Personnel

The GAO has routinely held that offerors have an ongoing obligation to alert agencies when their proposed key personnel become unavailable for performance, even after proposal submission. See, e.g., Ashlin Mgmt. Grp., B-419472.3, B-419472.4, Nov. 4, 2021, 2021 CPD ¶ 357 at 4 ("Our Office has explained that vendors are obligated to advise agencies of material changes in proposed staffing, even after submission of proposals, or as here quotations."). The GAO's "premise is grounded in the notion that a firm may not properly receive award of a contract based on a knowing material misrepresentation in its offer." Id. The GAO has extended this principle to other material aspects of offeror's proposals as well. See, e.g., Greenleaf Constr. Co., Inc., B-293105.18, B-293105.19, Jan. 17, 2006, 2006 CPD ¶ 19 at 9-10 (offeror required to alert agency to change in proposed Electronic Monitoring System software). The consequences of the GAO's rule are drastic: "When the agency is notified of the withdrawal of a key person, it has two options: either evaluate the proposal as submitted, where the proposal would be rejected as technically unacceptable for failing to meet a material requirement, or open discussions to permit the offeror to amend its proposal." General Revenue Corp. et al., B-414220.2 et al., Mar. 27, 2017, 2017 CPD ¶ 106 at 22.

The COFC disagreed with this long-standing precedent in Golden IT, LLC v. United States, at least with regards to changes in personnel, explaining that the GAO's rule "strikes the Court, candidly, as without legal basis and 'unfair.'" 157 Fed. Cl. 680, 703 (2022). While the Court "acknowledge[d] the likely 'obligation [of an offeror] to ascertain the continuing availability of key personnel at the time of submission of final proposal revisions," it was "unable to locate the basis for the GAO's rule 'that offerors or vendors are obligated to advise agencies of material changes in proposed staffing, even after submission of proposals.'" Id. (emphasis in original). The Court stated that it "concurs with" the following critique of the GAO's rule:

The simple facts of biology (illness, injury, incapacitation due to various causes, and death) and the common realities of business life (people retire, quit, or must be laid off or fired) make it unreasonable to expect that offerors will not experience changes in the status of their staffing over the course of such lengthy periods. The GAO requires offerors to tell agencies when there is a change but does not require or permit agencies to provide a simple process of substitution.

Id. at 703 n.39 (quoting Vernon J. Edwards, Key Personnel Substitutions After Proposal Submission: An Unfair Rule, 31 Nash & Cibinic Rep. ¶ 59 (2017)). Finally, the Court noted that "[a] court's assessment of an offeror's knowledge of facts and representations, however, is made with respect to the point in time at which the offeror submitted its proposal," and explained that it "will not conjure up a rule — and particularly not one untethered from a statute, regulation, or Federal Circuit decision — requiring offerors or quoters to routinely update the government when facts and circumstances change post-proposal or quote submission, during the course of the government's evaluation period." Id. at 703-04.

Discussions in Large Department of Defense ("DoD") Procurements

The GAO has "explained that, although DFARS [Defense Federal Acquisition Regulation Supplement] section 215.306(c)"—which provides that "[f]or acquisitions with an estimated value of $100 million or more, contracting officers should conduct discussions"—"establishes an expectation that discussions will be conducted in" such procurements, agencies still "retain the discretion not to conduct discussions based on the particular circumstances of each procurement." IAP Worldwide Servs., Inc., B-419647, B-419647.3, June 1, 2021, 2021 CPD ¶ 222 at 11 (citing, inter alia, Science Applications Int'l Corp., B-413501, B-413501.2, Nov. 9, 2016, 2016 CPD ¶ 328 at 8-9). Thus, while "discussions are the expected course of action in DoD procurements valued over $100 million," agencies "retain the discretion not to conduct discussions if the particular circumstances of the procurement dictate that making an award without discussions is appropriate." Science Applications Int'l Corp., 2016 CPD ¶ 328 at 8-9. "In this regard, the GAO will review an agency's decision to forego discussions, taking into consideration various facts, including notification in the solicitation of that intent; existence of clear technical advantages/disadvantages in initial proposals; and submission of initial proposals offering fair and reasonable prices." IAP Worldwide Servs., Inc., 2021 CPD ¶ 222 at 11. The GAO has "recognized that an agency generally need not conduct discussions with a technically unacceptable offeror." Id.

Notwithstanding the fact that under DFARS 215.306(c), "discussions are the expected course of action in DoD procurements valued over $100 million," in the Science Applications case, the GAO stated that "an agency's decision not to conduct discussions" is "reasonable" under the following three-part test based on prior "cases [that] pre-date DFARS § 215.306(c)": [1] "an agency's decision not to conduct discussions to be reasonable where the record showed there were deficiencies in the protester's proposal, [2] the awardee's proposal was evaluated as being technically superior to the other proposals, and [3] the awardee's price was reasonable." Science Applications Int'l Corp., 2016 CPD ¶ 328 at 11.

In IAP Worldwide Services Inc. v. Unites States, the Court rejected the GAO's continued application of its three-part test in the Science Applications case because "[t]he Court simply does not understand how that SAIC test, derived from cases that predate DFARS 215.306 — and thus could not possibly have applied a regulation specifying a 'default procedure' — should govern a procurement to which the DFARS provision applies." No. 21-1570C, 2022 WL 1021781, at *40 (Fed. Cl. Mar. 28, 2022) (emphasis in original). The Court explained that the "earlier GAO decisions" underlying the Science Applications "test all assume that there is no default rule favoring discussions and that an agency's discretion to decline to conduct discussions is all but plenary — as if the DFARS provision's 'operative word,' to use the GAO's terminology, were 'may' and not 'should.'" Id. (footnote omitted). The Court further reasoned that the three Science Application "factors swallow the DFARS 215.306 presumption whole" because they depend on cases that "recognize an agency's virtually unfettered discretion to decide whether to conduct discussions." Id. at 40-41. The Court found that "the DFARS standard clearly requires more of an agency than merely showing that it was able to accept ... [an] offer[ ] without discussion." Id. at 40 (internal quotations omitted).

At its core, this case stands for the proposition that DFARS 215.306(c)(1) "create[s] a presumption in favor of an agency's conducting discussions" and an agency's "threadbare, conclusory assertion" which is devoid of "any facts, explanation, or analysis substantiating,"and its "question-begging conclusions" are "insufficient" to overcome that presumption under the Administrative Procedure Act's "deferential … review standard" for assessing whether agency action is arbitrary and capricious. Id. at 34-35 (emphasis in original). The Court was careful to note, however, that "'an agency is not obligated to conduct discussions with a technically unacceptable offeror'" where "the agency has made a competitive range determination" excluding that offeror. Id. at 42 (explaining that the technically unacceptable offeror can instead challenge its exclusion from the competitive range). The other important point to take away from this decision is that it does not apply to every procurement. Rather, it is limited to DoD procurements with an estimated value of $100 million or more.

Key Takeaways

Over the years, the standard practice for many companies has been to file bid protests at the GAO to obtain the automatic stay of award or performance by the awardee under the Competition in Contracting Act of 1984 ("CICA"), and then, if it receives an adverse decision, file a bid protest at the COFC. If your cases relate to the availability of personnel or discussions, in some instances, it may now make sense to file a protest with the COFC and skip the GAO altogether. Before embarking on this course, however, companies should be mindful that there are some key differences between the COFC and the GAO – the primary one being the above-mentioned automatic stay. Unlike at the GAO, a bid protest filed at the COFC does not trigger an automatic stay under CICA. Rather, a plaintiff must seek a temporary restraining order and/or preliminary injunction to halt a procurement while the Court adjudicates the protest. This is an important issue to keep in mind if you are the incumbent for the work under protest.

Other differences arise from the defined timeline by which the GAO must issue its decision ("within 100 days after the date the protest is submitted," 31 U.S.C. § 3554(a)(1)) and the sometimes dramatic difference in the size and scope of the Agency Report (GAO) versus the Administrative Record (COFC). The documents included in the Agency Report are determined by agency counsel and, absent a successful objection by the protester, at times can be devoid of what protesters would consider critical information. In addition, the agency and the intervenor frequently file motions to dismiss that, if granted, can further limit the information included in the Agency Report. In stark contrast, the agency does not have as much ability to limit the documentation contained in the Administrative Record. Indeed, the Court recently chastised an agency for this in Oak Grove Techs., LLC v. United States, where it explained that "[t]he court's review function is undermined when an agency assembles a record that consists solely of materials that insulate portions of its decision from scrutiny or that it deems relevant to specific allegations raised by a protester." 155 Fed. Cl. 84, 98 (2021) (internal quotations omitted); see id. at 101 n.13 (noting the Court's concern "that the Agency, having failed to disclose relevant facts and documents during the GAO protest, attempted to protect itself by continuing its obfuscation during this case").

Depending on the facts of a given case, these new decisions may prompt disappointed offerors to forego the standard playbook and file their protests with the COFC at the outset. This is particularly advisable if your company is not the incumbent. By foregoing the GAO, your company will not incur fees for two sets of filings and may benefit from counsel's ability to assess a more fulsome record earlier in the process. In some cases, the Government may also voluntarily agree to stay performance by the awardee pending the Court's ruling, mitigating the loss of a CICA stay and potential inability to obtain injunctive relief on a preliminary basis. We recommend raising and discussing with counsel the potential benefits and obstacles (including jurisdictional ones, which could be the subject of an entire series of articles) of each forum for a bid protest.