Current Trends in Federal Bid Protests

1. Current Trends in Federal Bid Protests National 8(a) Association Meeting October 30, 2013 Rick Oehler Lee Curtis

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3. 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

4. GAO: Cases Filed +5% +2% +16% +20% +17% +6% -9% -2% 4

5. 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

6. 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

7. 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)

8. 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

9. 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)

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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

21. 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

22. 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

23. 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

24. 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

25. Bid Protests – Debriefings DEBRIEFINGS OF THE AWARDEE • Authorized by regulation • Potentially useful to – • learn how to improve proposal/ratings • help defend against a protest

26. 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

27. Bid Protests – Small Business Types covered: • Size Protests • Affiliation/Ostensible Subcontractor • Area Office Determinations and OHA Appeals

28. 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

29. 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

30. 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

31. 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)

32. 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).

33. 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).

34. Ostensible Subcontractor Rule13 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

35. Ostensible Subcontractor Rule13 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

36. 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.

37. 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.

38. Bid Protests – Alternatives PROTESTS CAN BE PURSUED WITH – • Contracting Officer • Procuring Agency • Government Accountability Office (GAO) • Court of Federal Claims (CFC)

39. Bid Protests – Alternative Forums Interested Parties Agency Court of Appeals for Fed Circuit GAO Court of Federal Claims

40. 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

41. Bid Protests – Alternatives PROCURING AGENCY FILING DEADLINES • Same as GAO – discussed later • Check individual agency rules

42. 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

43. 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).

44. 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

45. CICA Stay - FAR 33.104(c)(1) Notice to Agency by the GAO ContractAward 10 days or 5 days Offered Debrief Date and Debrief is required

46. Timeline: GAO Post-Award Protest and Agency CICA Stay GAO Protester Comments § 21.3(i); Supplemental Grounds? Basis known or should have known or debrief date Protest Filed at GAO, § 21.2(a)(2) Potential for Hearing 0 25 30 40 50 70 100 10 days Agency Document List § 21.3(c) Agency Report § 21.3(c) Agency Response to Supplemental § 21.3(c) GAO Decision § 21.9 AGENCY - CICA GAO Notice Contract Award, or 10 days Debrief Date Offered to Protestor 5 days

47. GAO: Merit Decisions and Protests Sustained 29% 21% 23% 27% 19% 16% 18.6% 18% 47

48. 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

49. 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

50. 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"