Protesting a Bid or Award

By law, a protest must be filed by an "interested party," which means an actual or prospective bidder whose direct economic interest would be affected by the award of a contract or by the failure to award a contract. In challenges to the government's evaluation of proposals and the award of contracts, this generally means a bidder that would potentially be in line for award if the protest were sustained.

Although most protests challenge the acceptance or rejection of a bid or proposal, and the award or proposed award of a contract, defective solicitations or bids may also be the basis for a protest. Such bid defects include allegedly restrictive specifications, omission of a required provision, and ambiguous or indefinite evaluation factors. In addition, the termination of a contract may be protested if the protest alleges that the termination was based on improprieties in the award of the contract.

Therefore, in doing business with the government, you have a right to protest a bid or an award both before and after the award of a contract: You can protest the bid, you can protest an award, and you can protest termination of a contract.

Take the opportunity to respond to a negative performance assessment when it first arises. The time to manage performance issues is during performance, not during the next competition. And be on time with your protest; there are no exceptions for missed deadlines.

So, what are some of the common protest grounds for a "defective bid"?

• The bid is not detailed enough or vague: what do you want?
• It's too detailed: 38 pages of SOW?
• It's too restrictive: it used standards or specs that are not needed.
• There is more time needed to respond: respond in xx days.
• It's contains ambiguous statements: which do you want?
• There are many brand names or equal issues.
• There are small business issues:
  • Wrong size standard
  • HubZone issues
  • "Failure" to set aside for small business

Protest Procedures

Reflecting the government's goal to ensure effective and efficient expenditure of public funds, and fair and expeditious resolution of protests to a solicitation or award of federal procurement contracts, as well as reduce cases outside the agency, the regulations direct that, prior to submission of a protest to the contracting agency, all parties use their best efforts to resolve concerns with agency contracting officers through open and frank discussions.

In cases where concerns cannot be resolved at this level and a protest is submitted to the agency, the agency is directed to provide for inexpensive, informal, procedurally simple, and expeditious resolution of protests and to use, where appropriate, alternative dispute resolution techniques, third-party neutrals, or even another agency's personnel.

If a protest is received before the award of the contract, the contract will not be awarded, pending a decision on the protest, unless the items or services are urgently needed, delivery or the performance will be unduly delayed, or the prompt award will otherwise be in the best interests of the government. If the protest is received within 10 days after the contract was award, performance of the contract will be suspended, pending resolution of the protest. The contracting officer must notify all other eligible offerors of the protest especially when the award will be suspended pending resolution of the protest. If a protest is received 10 days after award of the contract, the individual agency procedures will determine how the protest will be handled. The contract performance might not be suspended or terminated in these cases unless it is likely that the award will be invalidated and the delay will not be prejudicial to the government's interest.

Although the regulations encourage companies wishing to protest to seek resolution within the contracting agency before filing a protest with the General Accounting Office (GAO), the regulations do allow the party to file with GAO for resolution.

Warning If you decide to bypass the contracting officer and buying agency and file your protest directly with the GAO, keep in mind that this is the end of the line for your protest. The GAO's decision is final, and you cannot appeal it anywhere.

In addition to keeping your avenues of protest and appeal open, protesting to the contracting officer or contracting agency instead of directly to the GAO has other advantages. The company protesting can often gain additional time to gather more information that will assist it if it later protests to another forum.

Protests to GAO

There are some matters that cannot be protested to GAO. Among these are:

• Contract administration -- The administration of an existing contract is within the discretion of the contracting agency. Disputes between a contractor and the agency are resolved pursuant to the disputes clause of the contract and the Contract Disputes Act of 1978. 41 U.S.C. 601-613. In the same vein, GAO will not make decisions relative to 8(a) awards to minority or socially and economically disadvantages firms unless there is a possibility of bad faith on the part of the government or violation of the regulations.
• Small Business Administration issues -- Among these issues are challenges of small business size standards and standard industrial classification, and issues relative to 8(a) awards to minority or socially and economically disadvantages firms, unless there is a showing of possible bad faith on the part of government officials or violation of the regulations.
• Affirmative determination of responsibility by the contracting officer -- A determination that a bidder is capable of performing a contract will not be reviewed unless there is a showing of possible bad faith on the part of government officials or that definitive responsibility criteria in the solicitation were not met.
• Procurement integrity -- GAO will not review a protest for a procurement integrity violation unless the interested party has reported the information it believed constituted evidence of the offense to the contracting agency responsible for the procurement within 14 days after it first discovered the possible violation.
• Protests not filed within the required time limits
• Protests that lack a detailed statement of the legal and factual grounds of protest or that fail to clearly state legally sufficient grounds of protest as required under the regulations
• Procurements by agencies not under the jurisdiction of the Federal Property and Administrative Services Act of 1949, 40 U.S.C. 472, such as the U.S. Postal Service and the Federal Deposit Insurance Corporation
• Subcontract protests -- GAO will not consider subcontractor issues unless the agency has agreed in writing and the award is made by or for the government, such as when a contractor acts as a purchasing agent for the government.

Although many parties retain an attorney in order to benefit from the attorney's familiarity with GAO's bid protest process and with procurement statutes and regulations, an attorney is not required for purposes of filing a protest. Under current regulations, if you win your protest, the contracting agency will pay your attorney's fees, but there is a cap (currently $150 per hour). If fees exceed that amount, you will have to show special circumstances to justify a higher amount.

A protest to GAO must be filed within 10 working days of the protestor's learning of the initial adverse agency action. The GAO can then take up to 60 days to respond. If there is an adverse decision by GAO, the contractor can file a Notice of Appeal, which can add another 90 days, or file suit in the Court of Federal Claims, which can take up to another 12 months. Appeal by either party to the Court of Appeals for the Federal Circuit can take another 60 to 120 days. All in all, it may take up to four years to get a hearing on claims over $50,000, although trial stage has been reached within two years in the Court of Federal Claims.

Protest or Not?

What's our conclusion about protesting? Think very carefully before you protest. In the past, some companies would protest every contract that they lost, which can create an adversarial relationship that can work against you on current or future contracts. If you are going to protest, you must have a "real" reason (vs. just sour grapes) and you must have evidence to back up your claim.

If you do decide to protest, it is probably best to get some advice before you do anything. Consult with your local PTAC to get started in the process and/or seek legal counsel. You also should familiarize yourself with all requirements and procedures as well as your rights under Part 33.1 of the FAR.

Let's take a look at what your chances are. In fiscal year 2008 there were 1,652 protests filed. Of those, there was a 42 percent effectiveness rate, which is the percentage of cases where the protester received some relief from the agency. This is a 4 percent increase over FY2007. Remember that the stronger your protest is, the greater the advantage with the buyer and the agency. One thing to remember is that, if you do decide to protest, it's in your best interest to call counsel as soon has possible. When you're putting your proposal together, if you feel there might be a situation relating to the contracts, consult with your legal counsel. Contract law is complex and you should not tread lightly therein without someone to guide you through the legal process.