United States: Year In Review: Bid Protests

Last Updated: December 30 2015
Article by Sandeep N. Nandivada and Pablo A. Nichols

With the calendar year coming to an end, it is an opportune time to look back at bid protest activity at the Government Accountability Office (GAO) and the Court of Federal Claims to identify which arguments have borne the most fruit.  To assist in this regard, GAO recently released its Bid Protest Annual Report to Congress for Fiscal Year 2015.  According to GAO, during Fiscal Year (FY) 2015, GAO received 2,496 new bid protests and closed 2,522 pending bid protests.1  FY 2015 Annual Report at 1.  GAO sustained 12 percent of bid protests resolved on the merits, which represents the lowest sustain rate in the past five fiscal years.2  Id. at 5.  However, FY 2015 had the highest bid protest "effectiveness rate"—defined as the percentage of protests in which the protester obtains some sort of relief, either from voluntary agency corrective action or a sustained bid protest—over that same period.3  Id.

GAO also identified the most prevalent grounds for successful bid protests for FY 2015 as:  (1) unreasonable cost or price evaluations; (2) unreasonable past performance evaluations; (3) unreasonable technical evaluations; (4) failure to follow evaluation criteria; and (5) inadequate documentation of the record.  Id. at 1-2.  Additionally, protesters found success challenging agency solicitations based on ambiguities, unduly restrictive provisions, and procedural defects.

This blog post examines some of the more notable bid protest success stories of 2015 at both GAO and the Court of Federal Claims.

I. Notable Challenges to Agency Evaluations

Government contractors found success challenging agency evaluations on a number of fronts in FY 2015.  Successful bid protests included challenges to agency price or cost realism analyses, unreasonable technical evaluations, unreasonable past performance evaluations, and deviations from solicitation evaluation criteria.4

A. Price/Cost Realism Evaluation

In General Dynamics Advanced Information Systems, Inc., B-11771 et al., 2015 Wl 6501467 (Comp. Gen. Oct. 20, 2015), GAO sustained General Dynamic's challenge to the Navy's cost realism analysis because the Navy unreasonably concluded that General Dynamics had proposed uncompensated overtime hours.  The Navy's conclusion was based on a summary spreadsheet that was not included in the cost proposal, but rather was attached as an

Appendix solely to substantiate the realism of proposed labor rates.  GAO found that the agency misinterpreted the importance of this spreadsheet, which resulted in an improper upward adjustment to General Dynamic's cost proposal.  See also CFS-KBR Marianas Support Servs., LLC; Fluor Fed. Solutions LLC, B-410486 et al., 2015 WL 300733 (Comp. Gen. Jan. 2, 2015) (sustaining protest where Navy's cost realism evaluation mechanically applied government estimate without considering each offeror's unique technical approach); Lilly Timber Servs., B-411435.2, 2015 WL 4647961 (Comp. Gen. Aug. 5, 2015) (sustaining protest where agency improperly conducted price realism analysis where solicitation stated only that prices would be evaluated for "reasonableness").

Similarly, in KWR Constr., Inc. v. United States, No. 15-156C, 2015 WL 7567513 (Fed. Cl. Nov. 25, 2015), the Court of Federal Claims granted KWR's motion for judgment on the administrative record after concluding that the Air Force's price realism analysis was inconsistent with solicitation requirements.  The Court found that the Air Force expressly committed in the solicitation to assessing the price realism of individual line items, rather than total proposed prices, and that the Air Force failed to follow that methodology when evaluating the offerors' proposals.  Further, the Court rejected the Air Force's determination that KWR's price proposals indicated a clear lack of understanding of project requirements, finding that the determination was contradicted by the agency's express findings in the record.

B. Technical Evaluation

In Celta Services, Inc., B-411835 et al., 2015 WL 7731719 (Comp. Gen. Nov. 2, 2015), GAO sustained a protest based on the Department of Agriculture's flawed technical evaluation.  Specifically, GAO found that although the agency recognized that Celta had resolved all identified weaknesses prior to submitting its final proposal, the Source Selection Authority referenced and relied upon those weaknesses when making the source selection decision.  Additionally, GAO found that the agency did not reasonably and consistently assign point scores among the offerors, which resulted in an unreliable award decision.  See also Trandes Corp., B-411742 et al., 2015 WL 6445625 (Comp. Gen. Oct. 13, 2015) (sustaining task order protest where Navy waived mandatory experience requirements only for awardee's key personnel).

In Springfield Parcel C, LLC v. United States, No. 15-1069C, 2015 WL 7568200 (Fed. Cl. Nov. 11, 2015), the Court similarly found that the General Services Administration (GSA) had conducted a flawed technical evaluation.  The Court concluded that GSA failed to evaluate offers in accordance with solicitation criteria when it accepted the awardee's proposal to offer space larger than the 625,000 square feet specified in the solicitation.  The Court explained that the maximum rentable square feet parameter was a material term of the procurement because it affected both the quantity of space delivered and overall price.  Accordingly, the Court granted plaintiff's motion for judgment of the administrative record.

C. Past Performance Evaluation

In Logistics Management Int'l, Inc.; Al Raha Group for Technical Services, Inc.; Dalma Tech Co., B-411015.4 et al., 2015 WL 7450343 (Comp. Gen. Nov. 20, 2015), GAO sustained challenges to the Air Force's evaluation of both the awardee's and the protester's past performance, finding that the agency deviated from the solicitation criteria, failed to adequately document its evaluation, and engaged in disparate treatment.  When evaluating the awardee's past performance, the agency improperly evaluated the awardee's indefinite delivery, indefinite quality (IDIQ) contracts rather than the individual orders issued against those contracts, as required by the solicitation.  The agency also improperly relied on the general scopes of work for the IDIQ contracts in concluding that all orders issued under the contracts were "follow-on" orders eligible for consideration under the solicitation.  Additionally, GAO found that the Air Force engaged in disparate treatment with respect to Al Raha, one of the protesters before GAO, when it made multiple attempts to obtain past performance information regarding the awardee, but refused to consider potentially mitigating information concerning the protester.  See also DKW Commc'ns, Inc., B-411182 et al., 2015 WL 3759366 (Comp. Gen. June 9, 2015) (sustaining protest where agency unreasonably failed to consider a Contractor Performance Assessment Reporting System report deemed "close at hand").

II. Notable Challenges to Agency Solicitations

Although challenges to agency solicitations typically arise in the pre-award context,5 in FY 2015, protesters also found success challenging agency solicitations in the post-award context based on latent ambiguities.6  Moreover, protesters had success challenging unduly restrictive solicitation requirements for which agencies could not demonstrate an actual need.

A. Latent Solicitation Ambiguities

In Coastal International Security, Inc., B-411756 et al., 2015 WL 7348949 (Comp. Gen. Oct. 19, 2015), GAO sustained a protest where a collective bargaining agreement (CBA) incorporated into the solicitation was latently ambiguous with respect to the mandatory wage rates applicable to offerors' staff.  Coastal, as the incumbent contractor, knew the applicable prevailing wage rate and thus interpreted the CBA in a manner consistent with that knowledge.  The awardee, however, interpreted the wage rate to allow a lower wage than that bid by Coastal, and the agency supported this interpretation.  GAO determined that the CBA was latently ambiguous because both interpretations were reasonable, and the protester had no reason to be aware of the ambiguity prior to award.  Accordingly, because the ambiguity prevented the offerors from competing intelligently and on a relatively equal basis, GAO sustained the protest.

Similarly, in Per Aarsleff A/S v. United States, 121 Fed. Cl. 603 (2015), the Court of Federal Claims granted plaintiff's motion for judgment on the administrative record where the solicitation contained a latent defect regarding entity registration requirements.  The Court found that the solicitation's language was facially plausible and was not contradicted by other portions of the solicitation.  Further, the Court noted the Air Force's failure to provide correct answers in response to requests for clarification from potential offerors, suggesting that the Air Force also did not recognize the defective language.  In finding that the defect was latent and granting the plaintiff's motion, the Court also declined to impose a requirement on the protester to assume the Air Force's information was erroneous and to independently verify government information.

B. Unduly Restrictive Solicitation Requirements

In Smith and Nephew, Inc., B-410453, 2015 WL 1275375 (Comp. Gen. Jan. 2, 2015), GAO sustained a protest where the solicitation contained an unduly restrictive technical requirement regarding fluid handling capacity for which there was no actual agency need.  In sustaining the protest, GAO rejected the agency's argument that the fluid handling capacity requirement reflected an agency "goal" to obtain maximum absorbency, finding that the agency had entirely failed to explain how the challenged specification was reasonably necessary to meet an actual agency need.  Further, GAO noted that the agency acknowledged that the requirement was not supported by market research or any industry standard and, in fact, was contradicted by vendor product data that indicated the requirement was unnecessarily demanding.

In American Safety Council, Inc. v. United States, 122 Fed. Cl. 426 (2015), the Court of Federal Claims granted in part the plaintiff's motion for judgment on the administrative record where the agency's solicitation contained unduly restrictive intellectual property data rights clauses.  The Court found that the agency included a data rights clause concerning licensing for a purpose independent of the solicitation, which the agency had conceded.  The Court further found that the agency indiscriminately incorporated technical data clauses without any effort to tailor the clauses to the agency's reasonable needs.

III. Conclusion

Although the above decisions are a subsection of the total universe of protests filed in 2015, they reflect both GAO's and the Court's willingness to ensure that agencies comply with their legal obligations and do not abuse their discretion when conducting procurements.  Contractors should continue to monitor successful bid protests to stay abreast of the types of arguments that recently have gained traction before GAO and the Court.

Footnotes

1. Of the 2,522 protests closed, 335 concerned protests of task order awards within GAO's jurisdiction.  Id.; 10 U.S.C. § 2304c(e) (granting GAO jurisdiction to review protests of task order awards in excess of $10 million).

2. FY 2011 had a sustain rate of 16 percent, FY 2012 had a sustain rate of 18.6 percent, FY 2013 had a sustain rate of 17 percent, and FY 2014 had a sustain rate of 13 percent.  Id.

3. Specifically, 45 percent of bid protests considered on their merits resulted in some form of relief for the protester, up from 43 percent in FY 2014 and 2013 and 42 percent in FY 2012 and 2011.  Id. at 5.

4. Additionally, protesters found success challenging agency evaluations that reflected disparate treatment among offerors.  See e.g., Cubic Applications, Inc., B-411305  et al., 2015 WL 4480675 (Comp. Gen. July 9, 2015) (sustaining protest where agency evaluated only protester's optional labor labors as exceptionally low, despite awardee's even lower optional labor rates); International Waste Industries, B-411338, 2015 WL 4265303 (Comp. Gen. July 7, 2015) (sustaining protest where Air Force engaged in discussions only with awardee).

5. For example, in Global Technical Systems, B-411230.2, 2015 WL 7007806 (Comp. Gen. Sept. 9, 2015), the protester challenged a Navy solicitation that included a requirement for "engineering services," but lacked information necessary for offerors to propose acceptable labor rates.  In sustaining the protest, GAO found that the solicitation, which stated only that engineering services could include such tasks as "engineering analysis, conducting studies 'and/or' supporting engineering changes," was vague and contained no description of the type of work offerors would actually perform.  As a result, the agency prevented offerors from competing intelligently and on a relatively equal basis.

6. Protestors also successfully challenged agency solicitations based on procedural grounds.  Latvian Connection, LLC, B-411489, 2015 WL 4748107 (Comp. Gen. Aug. 11, 2015) (sustaining protest where protestor did not have constructive notice of solicitation amendment and did not learn of amendment until two business days before closing date for proposals); Eastern Forestry, B-411848, 2015 WL 7007802 (Comp. Gen. Nov. 9, 2015) (sustaining protest where solicitation amendment was posted on the evening before bid opening, leaving protester insufficient time to file); AECOM Tech. Servs., B-411862, 2015 WL 7171488 (Comp. Gen. Nov. 12, 2015) (sustaining protest where agency rejected proposal because it was submitted to incorrect location despite timely submission, agency awareness of submission, and no prejudice to competitors).

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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Authors
Sandeep N. Nandivada
Pablo A. Nichols
 
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