United States: Evaluations That Prompt Corrective Action Must Be Documented

Last Updated: September 26 2019
Article by Michael Slattery

We discussed in a previous blog post how the current state of the law at the U.S Government Accountability Office ("GAO") and within the Federal Circuit limits offerors' ability to effectively challenge agency corrective action. See Is There No Balm in Gilead? The Federal Circuit's Decision in Dell Federal Systems L.P. v. United States Reinforces Contractors' Dwindling Options to Effectively Challenge Agency Corrective Action. Specifically, we demonstrated that GAO has adopted a highly deferential, "hands off" position with regard to agency corrective action, holding that "the details of a corrective action are within the sound discretion and judgment of the contracting agency." Northrop Grumman Tech. Servs., Inc., B-404636.11, June 15, 2011, 2011 CPD ¶ 121 at 3. Under governing GAO case law, agencies have discretion to decide the scope of corrective action, including whether discussions will be held, the breadth of such discussions, which offerors shall be included in the corrective action, and the scope of permitted revisions to proposals. Deloitte Consulting, LLP, B-412125.6, Nov. 28, 2016, 2016 U.S. Comp. Gen. LEXIS 348 at *1, *11 (citing Computer Assocs. Int'l., B-292077.2, Sept. 4, 2003, 2003 CPD ¶ 157 at 5). Indeed, GAO will not disturb an agency's proposed corrective action so long as the corrective action is deemed reasonable—that is, so long as the corrective action is "appropriate to remedy the flaw which the agency believes exists in its procurement process." Onésimus Def., LLC, B-41123.3, B-41123.4, July 24, 2015, 2015 CPD ¶ 224 at 5.

Prior to September 2018, the U.S Court of Federal Claims ("COFC") provided offerors a greater chance of successfully challenging corrective action. Specifically, the COFC took the position that in order for corrective action to be deemed reasonable, the evidence in the record must show that the agency: (1) identified a defect in the procurement; and (2) considered the ways in which its corrective action would remedy the defect. See Dell Fed. Sys., L.P. v. United States, 133 Fed. Cl. 92, 101, 104 (2017) (emphasis added). Even where an agency rationally identified defects in its procurement, the COFC required that the agency's corrective action narrowly target the defects it is intended to remedy. Id. at 104 (citing Amazon Web Servs., Inc. v. United States, 113 Fed. Cl. 102, 115 (2013)). Under this COFC authority, an agency cannot use relatively minor defects to justify the full-scale opening of discussions and allowing revisions to quotations that do not relate to the defects. Id.

However, with its decision in Dell Federal Systems L.P v. United States, Nos. 2017-2516, 2017-2535, 2017-2554, Sept. 24, 2018 2018 U.S. App. LEXIS 28240 at *1 (Fed. Cir. 2018), the Federal Circuit rejected the position adopted by the COFC and required it to apply the same deferential, "hands off," attitude toward corrective action that GAO applies. Citing its own precedent, the Federal Circuit held that pursuant to the "rational basis" standard, a court reviewing agency corrective action examines only whether the proposed corrective action is reasonable. Id. at *16–*17 (citing Croman, Corp. v. United States, 724 F.3d 1357, 1363 (Fed. Cir. 2013)). As we previously noted, this highly deferential standard provides agencies that are so inclined to engage in gamesmanship, by which an agency can reassert control over a flawed procurement, in order to avoid a final GAO decision which finds the agency's prior, preferred awardee to be ineligible for award. By taking corrective action which permits all offerors, including the prior awardee, to submit revised proposals, the agency can permit its prior awardee to rehabilitate its noncompliant proposal, and remain in contention for award. This type of corrective action deprives the offeror that is next in line for award from automatically obtaining the contract award.

Recently, however, GAO issued an opinion which may provide offerors who feel shortchanged by corrective action with a chance to preclude such gamesmanship by requiring that any decision to take corrective action that is based upon a reevaluation of proposals be documented. In NavQSys, LLC, B-417028.3, Mar. 27, 2019, 2019 U.S. Comp. Gen. LEXIS 104 at *1, the Army Materiel Command ("AMC") issued an RFP which stated that, in order to respond to the solicitation, offerors must have a valid top secret facility clearance. Id. at *2-*3. NavQSys asked AMC to clarify whether the facility clearance requirement could be satisfied by an unpopulated joint venture, if each joint venture member itself held a facility clearance, but the Army never responded to NavQSys' question. Id.

AMC awarded the contract to NavQSys and another offeror, Semper Valens, filed a protest at GAO alleging that AMC should have disqualified NavQSys for failing to hold a top secret facility clearance at the time of proposal submission. Id. at *3. Shortly thereafter, AMC advised GAO that it intended to take corrective action by terminating the contract with NavQSys and making award to Semper Valens. Id. When GAO dismissed the protest as academic on the basis of this proposed corrective action, NavQSys protested, alleging that the agency's intended corrective action was unreasonable and inadequately documented. Id. at *4.

GAO sustained the protest, holding that AMC's corrective action reflected a reevaluation of NavQSys' proposal. Because AMC did not document this reevaluation, GAO could not conclude that the agency had a reasonable basis for its corrective action. Id. at *8. Specifically, GAO found that prior to taking corrective action an internal AMC e-mail stated that "taking corrective action is our only path forward as the facility clearance solicitation requirement was not met by the awardee." Id. at *6. GAO found that nothing in the record reflected the agency's interpretation of the RFP's facilities clearance provision, how the provision applied to NavQSys' proposal, or AMC's apparent determination that AMC did not satisfy this provision.

NavQSys stands for the proposition that an offeror can protest Agency corrective action where the corrective action is based on a reevaluation of proposals, and the Agency fails to document the reevaluation. Perhaps to preclude a new wave of corrective action protests, GAO was quick to point out that NavQSys presented an atypical case, since the corrective action not only addressed Semper Valens' protest, but also reflects a new agency determination about the proposals of both NavQSys and Semper Valens. As a result, GAO was being asked to consider the reasonableness of "both the corrective action and the new agency determination." Id. at *8, n.4.

Pursuant to NavQSys, offerors who are adversely affected by corrective action can protest when the corrective action is based upon a reevaluation of proposals and the Agency failed to document the reevaluation. However, GAO's holding may be of limited use to offerors since the only remedy that GAO recommended in NavQSys, was that the Agency document the basis for its decision to reject the proposal. Id. at *10-*11. While offerors can subsequently protest the reasonableness of the post hoc explanation offered by the Agency, the success rate of such protests will likely be limited. While NavQSys now requires agencies to document reevaluations that lead to corrective action decisions, it also permits agencies to do so retroactively. This affords procuring agencies that are so inclined to paint their actions in the most favorable light possible, without having to support their post hoc version of events with documentary evidence.

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
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please 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