United States: Ten Myths Of Government Contracting: Myth No. 2 - We Should Always Protest

This article originally appeared on the blog of the Public Contracting Institute.

The decision to file a protest highlights one of the unique features of contracting with the U.S. Government, involving as it does a long list of questions that must be addressed and the pressure of having to decide whether to sue a customer within a very short time frame.

In Myth No. 1, " We should never protest," I explained why there might be certain situations where a company really should protest. As in other walks of life, however, a company's reputation is an important part of its success, and its reputation could be harmed if it is known as a business that protests everything. The filing of a protest generally leads to a lot of work for the Government personnel that have to deal with it. The contracting officer and his or her team have to devote significant time to assembling all relevant documents and preparing an agency report. Agency counsel will be required to work with the contracting team in an effort to understand the procurement, the relevant facts, and the strength of the protester's arguments. If the agency personnel decide that corrective action is necessary, that should not generate any ill will toward the protester; on the other hand, if a company files one spurious protest after another, that could lead to problems over time.

Don't ever underestimate the power of a Government employee, regardless of rank. If you have offended or angered someone in a customer agency, they have ways of doing (or not doing) things that can have an impact on your company, and they can do it without leaving any tracks. For example, the exercise of a contract option is unilateral on the part of the Government, and its failure to do so is not something that will lead to a successful protest. Likewise, a miffed contracting officer might simply fail to process a request for an equitable adjustment, or fail to include your company on an emergency solicitation short list. In other words, your faucet can be turned off without your having a clue. Because of this raw power, smart contractors avoid doing things, like filing a spurious protest that will anger their customers.

Chasing a Government contract can be an expensive and arduous process, and I have not met many executives who have admitted that they did not submit a very good proposal. Likewise, I have never met a disappointed offeror (Government speak for "loser") that believes they had gotten a fair shake in a procurement. The "Dear John" letter that disappointed offerors receive can lead to negative feelings, even anger, but the appropriate course of action has to be decided without letting emotion in the door. Many people in that position immediately want to file a protest, but in a negotiated procurement, you generally must wait until you have had the debriefing before you can file.

So, the very first step is to file a timely request for a debriefing, if one is available, and that should be done within 24 hours of receiving a "Dear John" letter. If you are offered a chance to attend an in-person debriefing, take it. And regardless of the type of debriefing you are offered (the Government gets to dictate whether a debriefing will be held in person, by phone, or in writing), always take the first date offered. Why? Because your protest period starts to run on that date, and your risk of filing an untimely protest will have increased dramatically if you decline that first date.

The "Dear John" letter should be read carefully. Some agencies will use it to provide a written debriefing, which means your protest period starts on the date you receive the letter. Other agencies might provide you with directions relating to a debriefing. For example, the agency might tell you that you must submit written questions in advance of the debriefing and that failure to do so will mean that no questions will be entertained at the actual debriefing. Experienced counsel can assist you in addressing either of these common situations.

The debriefing itself offers an opportunity for the company to make a good impression on the customer. Prepare by reviewing the applicable regulation (either FAR 15.505 or 15.506) and preparing a list of reasonable questions that you want to get answered if possible. At the debriefing itself, avoid hostility or inflammatory remarks; don't mention the word "protest," and maintain a poker face. In other words, be professional. Further, give some thought to who should attend on your behalf. As a general rule, I don't recommend including your lawyer — that sends the wrong message. Your goal in a debriefing is to obtain as much information as possible, and bringing a lawyer will often cause the Government representatives to clam up.

Once the debriefing is over, confer with experienced counsel and discuss the situation. Your counsel should have what he or she needs to advise you whether a protest is advisable, and in many cases you will be told it is not. This is just another example of how a smart businessperson has to pick his battles.

Filing and pursuing protests can be expensive. If your protest is before the GAO or the U.S. Court of Federal Claims, it is very likely that a "protective order" will govern the matter. This means that only lawyers representing the various parties will be able to see the full, unredacted file. This is often frustrating for clients paying the bills, but protective orders are designed to prevent the competing companies from seeing each other's confidential information as well as the Government's source-selection information. While some of the protest costs might be reimbursed if you are successful, that should never be the motivating factor in the decision-making process. Instead, you should focus on the facts and the law; your relationship with the agency; your commitment to your team of subcontractors; and the potential expense. All of these factors must be weighed in a very short period of time, which means considerable pressure.

Taking a position at either end of the protest spectrum, without knowing the facts, is simply silly. A smart contractor weighs a variety of factors, including advice from competent counsel, in deciding whether and where to file a protest.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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