Transcript Current Trends in Federal Bid Protests

Current Trends in
Federal Bid Protests
National 8(a) Association Meeting
October 30, 2013
Rick Oehler
Lee Curtis
Perkins Coie
 Offices: 19 across the United States and
China, including Anchorage, Seattle and D.C.
 Perkins has represented ANCs for well over
30 years
 Perkins has a strong Government Contracts
practice
 web based resources for government contractors
 http://www.perkinscoie.com/government_contracts/
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Current Trends In Federal Bid Protests
 Part I
 Overview
 Debriefings
 Part II
 Small Business Issues
 Part III
 Alternative Forums
 Standing and Typical Bid Protest Issues
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GAO: Cases Filed
+5%
+2%
2500
+16%
+20%
2,299
2000
+17%
1500
-9%
-2%
2,353
2,475
1,989
Cases Filed
+6%
1,652
1,356
1,326
FY05
FY06
1,411
1000
500
0
FY07
FY08
FY09
FY10
FY11
FY12
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Bid Protests – Overview
CHARACTERISTICS OF FEDERAL
PROCUREMENT PROCESS
 Generally competitively awarded
 Governed by numerous statutes and regulations
 Government officials are required to comply with
those statutes and regulations, but also have
significant discretion
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Bid Protests – Overview
WHAT IS A BID PROTEST?
 A formal complaint against some aspect of a
federal procurement process which asserts
either
 A violation of law; or
 A decision that lacks any rational basis
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Bid Protests – Overview
VIOLATION OF LAW
 Generally only federal procurement law
 Statutes (like Competition in Contracting Act or
Procurement Integrity Act)
 Regulations (like FAR, DFARS or SBA
regulations)
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Bid Protests – Overview
DECISION LACKING A RATIONAL BASIS?
 A decision or action that lacks any logical support at
all
 A decision based on materially mistaken or
erroneous facts
 A decision contrary to the solicitation
 A decision based on improper motives
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Bid Protests – Overview
PROTESTS CAN BE MADE AT MANY
DIFFERENT POINTS IN THE PROCESS
 Prior to the solicitation
(example: synopsis of sole-source
contract)
 After solicitation, but prior to award
(example: solicitation with objectionable
terms)
 After award (disappointed offeror)
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Bid Protests – Overview
REALITY NO. 1 – A FORMAL PROTEST IS NOT
THE PREFERRED APPROACH TO MOST
ISSUES
 This is business and the government procuring
agency is your customer
 The customer may not always be right, but good
relations must be maintained
 Evaluate if there are alternative ways to be
persuasive
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Bid Protests – Overview
ALTERNATIVE – Letter to Contracting Officer
 Lowest cost, but may not get review beyond CO's team;
may result in review by agency counsel
 Still need to identify a legally and factually sound basis
for change in agency course
 Prior to agency protest, all parties shall attempt to
resolve "concerns" at the CO level. FAR 33.103(b)
 Responses to notice of proposed sole-source award
 Pre-solicitation and post-solicitation conferences
 Q & A process regarding solicitations
 Take advantage of opportunities to address inappropriate
restrictions and evaluation schemes
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Bid Protests – Overview
REALITY NO. 2 – SOMETIMES A FORMAL
PROTEST IS THE ONLY WAY TO PROTECT
YOUR INTERESTS
 When competition is not being permitted
 When the Government fails to follow the RFP
rules
 When a new perspective will help ensure a fair
result
 When a final decision is dead wrong
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Bid Protests – Overview
REALITY NO. 3 – TO MAKE INTELLIGENT
DECISIONS ABOUT WHETHER TO FILE A
PROTEST, YOU HAVE TO KNOW –




Federal procurement process rules
Bid protest process rules
Deadlines are VERY TIGHT!
Your own objectives in filing a protest
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Bid Protests – Overview
OBJECTIVES IN FILING A PROTEST
 Gaining an opportunity to compete at all
 Gaining an opportunity to compete on a level
playing field
 Gaining an opportunity for a second look in an
evaluation
 Sending a message to shape a procuring
agency's future actions
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Bid Protests – Overview
DECISION TO ESCALATE TO PROTEST
 May be forced by timing
 Action against non-competitive process
 Action against overly restrictive RFP terms
 Action against perceived violation of Procurement
Integrity Act
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Bid Protests – Debriefings
WHAT ARE DEBRIEFINGS?
 Informative exchanges required by regulation
after exclusion or contract award (FAR 15.505
and 15.506)
 Can be face-to-face meeting, telephonic
conference or in writing
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Bid Protests – Debriefings
WHO IS ENTITLED?
 Offerors excluded from a competitive range
 All offerors after an award selection is made
 Mandatory only for FAR Part 15 procurements
 Not necessarily required for formally advertised
(Part 14) or simplified acquisitions
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Bid Protests – Debriefings
WHAT IS A DEBRIEFING AND HOW CAN
YOU USE IT?
 To help make an informed and intelligent decisions
regarding whether to protest
 To help obtain information to use in pursuing a
successful protest
 To obtain additional insights for future competitions
 To help position you (as successful contract
awardee) to defend against a protest
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Bid Protests – Debriefings
PRE-AWARD DEBRIEFINGS
 Offered to offerors excluded from
competitive range or otherwise excluded
(FAR 15.505)
 Make a written request within 3 days of
notice
 Government to debrief "as soon as
practicable" - compelling circumstances can
delay until after award
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Bid Protests – Debriefings
PRE-AWARD DEBRIEFINGS
 At a minimum pre-award debriefing includes:
 Agency evaluation of significant elements of
proposal
 Summary of rationale for exclusion
 Reasonable responses to relevant questions about
compliance with procedures and regulations
 Other information may be requested
 Certain types of information will not be disclosed
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Bid Protests – Debriefings
POST-AWARD DEBRIEFINGS (FAR 15.506)
 Offered to offerors after contract award
 Make a written request within 3 days of notice
 "To maximum practicable extent" held within 5
days of written request
 Government can accommodate an untimely
request for a debriefing
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Bid Protests – Debriefings
POST-AWARD DEBRIEFINGS (con't)
 At a minimum, includes
 Government's evaluation of requestor's
weaknesses and deficiencies
 Overall evaluated cost or price and technical rating
of the awardee and the debriefed offeror
 Past performance of debriefed offeror
 Make and model of successful offeror
 Overall rankings of offerors
 Summary of rationale for award
 Reasonable responses regarding procedures
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Bid Protests – Debriefings
GOVERNMENT IS NOT TO DISCLOSE
 Point by point comparisons
 Trade secrets or confidential
processes/techniques
 Confidential commercial or financial
information
 Names of references providing past
performance information
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Bid Protests – Debriefings
EFFECTIVE DEBRIEFING TECHNIQUES
 Be fully prepared (evaluation criteria, process,
focus areas)
 Listen closely and read between lines
 Ask follow-up questions
 Agree in advance on how far to push
 Possibly caucus to evaluate how to proceed
 Agree to accept additional information
 Face-to-face is preferred if possible
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Bid Protests – Debriefings
DEBRIEFINGS OF THE AWARDEE
 Authorized by regulation
 Potentially useful to –
 learn how to improve proposal/ratings
 help defend against a protest
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Bid Protests – Debriefings
TIGHT GAO PROTEST TIMELINES
 Lee will discuss the timeline to file a
protest at GAO after a debriefing
 However, the timelines are tight
 GAO enforces timelines strictly
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Bid Protests – Small Business
Types covered:
 Size Protests
 Affiliation/Ostensible Subcontractor
 Area Office Determinations and OHA Appeals
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SIZE PROTEST
 The SBA Area Director for Government Contracting
(or designee) will notify the following that protest
received:
 CO
 Protested concern
 Protestor
 If HUBZone, then AA/HUB will be notified
 If SDB, the AA/8(a) BD will be notified
 SBA has 10 working days (if possible) to make a
formal size determination
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SIZE PROTEST (cont'd)
 The Size determination will be based on the
evidence presented in the protest, but the
SBA may use outside information
 SBA will give greater weight to supported
factual information than unsupported
allegations
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Bid Protests – Small Business
Response
 The concern whose size is at issue must complete SBA Form
355 within 3 working days from the date of receipt from SBA
 If the concern fails to respond, SBA may presume that the
concern is other than a small business
 A concern whose size status is at issue must furnish
information about its alleged affiliates to SBA, despite any third
party claims of privacy or confidentiality, because SBA will not
disclose information obtained in the course of a size
determination except as permitted by Federal law
 The concern whose size is under consideration has the burden
of establishing its small business size
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Bid Protests – Small Business
Time limits
 Non-negotiated procurements: 5 days after bid or
proposal opening
 Negotiated procurements: 5 days after the CO
has notified the protestor of the identity of the
prospective awardee
 Electronic notification of award: 5 days after the
electronic posting
 Multiple award schedule: any time prior to the
expiration of the contract period (including
renewals)
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Bid Protests – Small Business
Affiliation
 Concerns and entities are "affiliates" of each other
when one controls or has the power to control the
other. 13 CFR § 121.103(a)(1).
 SBA considers factors such as ownership,
management, previous relationships with or ties to
another concern, and contractual relationships. 13
CFR § 121.103(a)(2).
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Affiliation
 Determined under 13 CFR 121 and 134
 Factors weighed:
 Identity of Interest
 Common Management
 Totality of Circumstances: SBA will
consider the totality of the circumstances,
and may find affiliation even though no
single factor is sufficient to constitute
affiliation. 13 CFR 121.103(a)(5).
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Ostensible Subcontractor Rule
13 CFR 121.103
 A contractor and its ostensible
subcontractor are treated as joint
venturers, and therefore affiliates, for size
determination purposes
 An ostensible subcontractor is a
subcontractor that performs primary and
vital requirements of a contract, or of an
order under a multiple award contract, or
a subcontractor upon which the prime
contractor is unusually reliant
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Ostensible Subcontractor Rule
13 CFR 121.103
 All aspects of the relationship are considered
 "Team" experience
 Intent: prevent other than small firms from
circumventing the size regulations.
 Appeals are intensively fact specific
 Relate to specific requirements of each
solicitation
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Area Office Determination/OHA
 If an Area Office determines
affiliation/ostensible subcontractor rule was
violated, person losing that decision
"appellant" may appeal the ruling to OHA.
 Appeals are intensively fact specific because
they are based upon the specific
requirements of each solicitation. "All
aspects of the relationship" must be
evaluated. 13 CFR 121.103.
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Affiliation: OHA Appeal
 Appellant has the burden of proving by a
preponderance of the evidence (more
likely than not) all elements of the appeal.
 Appellant must prove the Size
Determination is based on a clear error of
fact or law. 13 CFR 134.314.
 This is not de novo review, but based on
the record established.
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Bid Protests – Alternatives
PROTESTS CAN BE PURSUED WITH –




Contracting Officer
Procuring Agency
Government Accountability Office (GAO)
Court of Federal Claims (CFC)
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Bid Protests – Alternative Forums
Interested
Parties
Agency
Court of Appeals
for Fed Circuit
GAO
Court of
Federal
Claims
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Bid Protests – Alternatives
PROCURING AGENCY (FAR 33.103)
 Interested party may request an independent
review by procurement professionals at levels
above the CO
 Some agencies take more seriously than others
 Can be most effective on pre-award issues (overly
restrictive; exclusions; PIA)
 Unusual to gain satisfaction in post-award
protests
 Quick resolution; decision encouraged in 35 days
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Bid Protests – Alternatives
PROCURING AGENCY FILING
DEADLINES
 Same as GAO – discussed later
 Check individual agency rules
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Bid Protests – Alternatives
GAO
 Provides true outside expertise (80+ years)
 Automatic stay with a timely protest filing
 Substantial opportunities to develop facts regarding
evaluations and other proposals
 Full report
 Document requests
 Hearings (at GAO's discretion)
 Opportunities maximized through protective order;
requires legal counsel not involved in competitive
process
 Recovery of protest costs
 Agencies almost always follow recommendation
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Bid Protests – Alternatives
GAO –Protest Deadline
 Protests alleging a solicitation defect must be filed before
bid opening or the time set for receipt of initial proposals if
the improprieties were apparent prior to that time. 4 C.F.R.
§ 21.2(a)(1).
 Other protests, including post-award protests, must be filed
not later than 10 days after the basis of the protest is known
or should have been known or within 10 days of debriefing.
4 C.F.R. § 21.2(a)(2).
 If protester timely filed agency-level protest, within 10 days
of actual or constructive knowledge of adverse agency
action. 4 C.F.R. § 21.2(a)(3).
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Bid Protests – Alternatives
CICA Stay, 31 U.S.C. 3553(c) and (d)
 Stay is crucial in order to obtain meaningful relief
 By law, an Agency may not award a contract after
notice of pending protest
 GAO must notify agency within the required time
limits
CICA Override
 Head of Procuring agency must make finding
 GAO must be notified
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CICA Stay - FAR 33.104(c)(1)
Notice to
Agency by
the GAO
Contract
Award
10 days
or
5 days
Offered Debrief Date
and Debrief is required
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GAO
Timeline: GAO Post-Award Protest and
Agency CICA Stay
Protester Comments
§ 21.3(i);
Basis known
or should
have known
or debrief
date
Protest Filed
at GAO, §
21.2(a)(2)
0
Supplemental
Grounds?
25
30
40
Potential for
Hearing
50
70
100
10 days
Agency
Document
List
§ 21.3(c)
AGENCY - CICA
Agency
Report
§
21.3(c)
Agency
Response to
Supplemental
§ 21.3(c)
GAO Decision
§ 21.9
GAO
Notice
Contract
Award, or
10 days
Debrief
Date
Offered to
Protestor
5 days
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GAO:
Merit Decisions and Protests Sustained
23%
29%
27%
21%
18%
19%
16%
18.6%
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Bid Protests – Alternatives
COURT OF FEDERAL CLAIMS
 Court process – opportunity for discovery
 GAO deadlines do not apply
 No automatic stay; agency may stop
voluntarily and may also be enjoined
 Process more expensive and can be more
complicated than GAO
 Decisions are appealable to Federal Circuit
 Can challenge agency override of stay
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Bid Protests – Alternatives
THE OPTIMAL FORUM – WILL VARY
DEPENDING ON STAGE IN PROCESS,
TYPE OF ISSUE INVOLVED, GOALS AND
RESOURCES TO BE COMMITTED
 Early in process
 Contracting officer or agency
 Need access to evaluations/other proposals
 GAO or Court to use protective order
 Goal is to ensure status quo during protest
 GAO or Court to achieve effective stay
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Bid Protests – Standing
 A GAO protest must be filed by an "interested
party," which means an actual or prospective
bidder or offeror with a direct economic interest
in the procurement. 4 C.F.R. § 21.0(a).
 Generally means an offeror that would potentially
be in line for award if the protest were sustained.
 For agency protests, essentially the same
standard as GAO
 At COFC, two-part test applies to determine an
"interested party"
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Bid Protests – Standing
 Interested parties do not include subcontractors
except where the awarding agency has
requested in writing that a subcontract protest
be decided pursuant to 4 C.F.R. § 21.13.
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Bid Protests – Typical Issues




Source selection decisions
Past performance evaluations
Discussions
Conflicts of interest
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Bid Protests – Typical Issues
Source Selection
 Source selection decisions must be rational and
consistent with the solicitation's evaluation
criteria
 Reasonableness/rationality:
 GAO will not "reevaluate" the proposals
 Protester's "mere disagreement" with the
evaluation is not sufficient to render it
unreasonable
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Bid Protests – Typical Issues
Past Performance issues include—
 Similarity of past performance
 Agency required to follow solicitation
requirements
 Agency must consider past performance
information "too close at hand" to ignore
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Bid Protests – Typical Issues
Discussions
 When an agency engages in discussions, it must
afford offerors in the competitive range an opportunity
to engage in meaningful discussions. FAR
15.306(d)(1)
 At minimum, COs must discuss with each offeror
considered for award "deficiencies, significant
weaknesses, and adverse past performance
information to which the offeror has not yet had an
opportunity to respond." FAR 15.306(d)(3)
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Bid Protests – Typical Issues
Conflicts of Interest issues include—
 Agency must reasonably consider potential
conflicts of interest created by awardee's
involvement in certain activities
 Conflict of interest mitigation plans
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Bid Protests – Intervening
Why the awardee may want to
intervene
 To protect its interests
 To obtain access to information subject to a
protective order
 Generally, only outside counsel can obtain
access to information subject to a protective
order
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Bid Protests – Recap
 Protests are sometimes required to protect your
interests
 Protests move very quickly
 Imperative to know the rules to meet deadlines
 Counsel should be involved as early as possible
 Spot and evaluate potential protestable issues
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Hot Topics/Trends
● Possible requirement to choose between GAO or COFC
● Discussion of GAO filing fee
● Dan Gordon commentary on the utility of bid protests
● Trend toward agency corrective actions
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Questions or comments, please
write, call or email:
Rick Oehler
Perkins Coie LLP
1201 Third Avenue, 40th Fl.
Seattle, WA 98101-3099
(206) 359-8419
(202) 654-6367
[email protected]
Lee Curtis
Perkins Coie LLP
700 13th Street, N.W., Suite 600
Washington, D.C. 20005-3960
(202) 434-1647
[email protected]
28011700.1
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