United States: Three October Bid Protest Decisions That May Affect Your Business

Key Points

  • First, an awardee is responsible for keeping tabs on what happens in a protest of its award, or it may not be able to submit its own challenge if the protest is sustained.
  • Second, mere compliance with cybersecurity requirements may not be enough. The government may evaluate the quality of your cybersecurity approach.
  • Third, do offerors without relevant past performance have standing to protest?

Decision 1: Sonoran Tech. and Professional Services, LLC v. United States

In Sonoran Tech. and Professional Services, LLC v. United States, the United States Court of Federal Claims (COFC) considered the knowledge that an awardee would have gained from intervening in a protest in deciding whether the awardee's subsequent protest was timely.

Background

The Air Force issued a service-disabled, veteran-owned small business (SDVOSB) set aside solicitation for courseware development and training for its aircrew flying B-52 and B-51 aircrafts. The awardee was required to have a facility security clearance at the time of the award. Sonoran and Spectre Pursuit Group, LLC were two of nine offerors that submitted proposals. At the time of proposal submission, Spectre did not have the required facility clearance. The Contracting Officer (CO) determined that Spectre was not eligible for the award for that reason and awarded the contract to Sonoran.

Spectre filed a bid protest challenging the CO's decision at the Government Accountability Office (GAO) on the grounds that the decision to eliminate its proposal was a negative responsibility determination, and, therefore, the Air Force was required to refer the matter to the Small Business Administration (SBA). After the GAO dismissed the protest, Spectre filed a new protest at the COFC, and the Air Force took corrective action, which consisted of referring the matter of Spectre's responsibility to the SBA. The SBA notified the Air Force and Spectre that it could not make a responsibility determination because of the award to Sonoran. In response, Spectre filed a new bid protest at the COFC challenging the SBA's failure to make a responsibility determination.

The SBA then decided that Spectre's case presented "unique circumstances" warranting reconsideration and withdrew its earlier decision. After the award, Spectre secured a facility clearance. The SBA determined that Spectre was responsible and issued a Certificate of Competency. Based on the SBA's determination, the Air Force terminated Sonoran's contract and made an award to Spectre.

Holding

Sonoran had not intervened in any of Spectre's protests. After the award to Spectre, Sonoran filed a bid protest at the COFC challenging the solicitation, the evaluation and the corrective action.

The Air Force argued that Sonoran's protest of its corrective action should be dismissed because the protest was filed after the Air Force made the contract award. Sonoran argued that it did not have sufficient notice of the Air Force's intent to take corrective action. Citing Blue & Gold Fleet, the COFC determined that Sonoran had "ample" notice because it could have intervened in the protests:

"Why Sonoran chose not to intervene in either of these protests is beyond the Court's comprehension, as Sonoran should have known that its award was at risk of being rescinded and granted to [Spectre] instead as a result of potential corrective action."

Conclusion

While we would usually recommend that an awardee intervene to keep tabs on the protest and protect its interest even before this decision, intervening is even more important after Sonoran. This advice also applies to protests at the GAO. While the GAO is not bound by the decision in Sonoran, its regulations and prior decisions indicate that it would likely come to a similar conclusion. Specifically, the GAO bases timeliness on when the protest grounds "should have been known," not when they were actually known.

Sonoran raises other issues that we will not discuss here, but that may also be important in future bid protests. First, query whether the SBA's decision to review the facility clearance requirement and issue a Certificate of Competency after the award was appropriate. Second, in dismissing Sonoran's challenge to the Air Force's past performance evaluation of Spectre, the COFC stated that "allegations that an agency's evaluation of a proposal runs afoul of applicable statutes and regulations are challenges to the terms of the solicitation that must be brought before the close of the bidding process." (emphasis added). It makes sense that, if a solicitation provision deviates from applicable statute or regulation, an offeror could recognize the error and challenge the provision pre-award. However, if the violation does not become evident until it is applied to a specific offeror, it will be difficult to bring a nonspeculative, pre-award protest.

Decision 2: In re: IPKeys Technologies, LLC

Unless you have not read a government contracts blog in a while, you know that the government has implemented various cybersecurity regulations. The Federal Acquisition Regulation (FAR) requires contractors to protect "federal contract information," and various agency supplements contain additional requirements. For example, the Department of Defense (DOD) is in the process of implementing cybersecurity regulations, and all contractors that handle "covered defense information" are required to comply with the National Institute of Standards and Technology (NIST) SP 800-171 by December 31, 2017.

While compliance is required, we have also advised that solicitations may use cybersecurity as a technical evaluation factor. In a recent protest, the GAO confirmed the government's ability to do so.

In IPKeys Technologies, LLC, the GAO denied a protest challenging the Defense Information Systems Agency's (DISA) evaluation of the awardee's cybersecurity approach. The solicitation required offerors to comply with DOD Instruction No. 8510.01, Risk Management Framework (RMF) for DOD Information Technology (July 28, 2017). The DISA found that, in addition to complying with the RMF requirements, the awardee's cybersecurity approach showed its compliance with the NIST Framework for Improving Critical Infrastructure Cybersecurity. The GAO determined that the DISA's determination that the awardee's "proposed framework would help to manage cybersecurity risks and lead to improved efficiencies" properly supported its decision to award the contract to the higher-priced offeror.

This point is important to remember as you think about how to comply with the various cybersecurity regulations. For example, the Defense Federal Acquisition Regulation Supplement Clause 252.204-7012 requires compliance with NIST SP 800-171 by December 31, 2017, but, to be in compliance, a contractor need only have in place a "Security System Plan" and a "Plan of Action and Milestones" describing the way in which it intends to meet the technical requirements at some point in the future. However, individual solicitations may require a contractor to have already met NIST SP 800-171's technical requirements, and, even if not, offerors may receive higher technical ratings for having them in place.

Decision 3: CliniComp Int'l, Inc. v. United States

Agencies must evaluate an offeror's past performance that is current and relevant (e.g., of similar size, scope and complexity). When an offeror does not have a record or relevant past performance, "the offeror may not be evaluated favorably or unfavorably on past performance." FAR 15.305(2)(iv). To accommodate this requirement, agencies often include a "neutral" rating for such offerors. How to properly account for a neutral rating in an evaluation may be difficult, and it is a common protest ground, but it is clear that an offeror should not be excluded from an award based on a neutral past performance rating—both the GAO and the COFC agree on this point.

This is why the recent CliniComp Int'l, Inc. v. United States decision caught our attention. CliniComp filed a pre-award bid protest matter to enjoin the Secretary of Veterans Affairs from directly soliciting a sole source contract to Cerner Corporation for the next-generation electronic health records (EHR) system for the United States Department of Veterans Affairs (VA), pursuant to the public interest exception to the Competition in Contracting Act.

The COFC did not reach the merits and granted the VA's motion to dismiss for lack of subject-matter jurisdiction because CliniComp did not establish that it had standing. The COFC agreed with the VA and concluded that CliniComp was "not a qualified bidder that could have competed for the contract to provide the VA's new electronic health records system." The COFC based its holding on the fact that CliniComp could not have even "competed for the Cerner Contract if the procurement process for that contract had been competitive" because (i) the VA's planned contract significantly exceeds the value of the government contracts that CliniComp has previously performed, (ii) CliniComp does not have experience providing EHR services for the substantial number of facilities that will be covered by the VA's planned contract, and (iii) CliniComp has no comparable experience performing the comprehensive tasks required under the VA's planned contract.

This is a surprising result. Had the VA issued a competitive solicitation for these EHR services, CliniComp could have submitted a proposal. And, if it had, under FAR 15.305(2)(iv), CliniComp could not properly be evaluated unfavorably for lack of relevant past performance. The fact that CliniComp does not have past performance of similar size, scope and complexity should not disqualify it from an award, much less submitting a proposal. Had there been a competition and the VA had disqualified CliniComp for the reasons stated by the COFC, CliniComp would have had a good basis to protest. Can an agency now argue that a protester with neutral past performance does not have standing?  

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions