Navigating Bid Protests In The Age Of Trump

1. Navigating Bid Protests In The Age Of Trump Franklin Turner Alexander Major fturner@mccarter.com amajor@mccarter.com 202.753.3432 202.753.3440 August 2, 2018

2. Who Are These Guys? • Partners and Co-Leaders of the Government Contracts and Export Controls Group at McCarter & English • Significant experience handling “bet the company” litigation, investigations and bid protests • Clients range from Fortune 100 companies to small businesses • Extensive experience in defense and civilian contracting across multiple industry sectors

3. Agenda • What Is A Bid Protest? • Where Can You Protest? • What Are The Timelines? • Pre-Award Protests • Post-Award Protests • Understanding The Protective Order • Preparing For A Protest • Recent Legislative Changes

4. What Is A Bid Protest?

5. What Are You Challenging? • All protests challenge some form of Government action or inaction, e.g. • The terms of the RFP or RFQ • Patently ambiguous provisions • Inclusion of improper clauses • The evaluation of offers and resulting source selection decision • Awarding to a company despite an unmitigated Organizational Conflict of Interest • Awarding to an offeror who violated the Procurement Integrity Act

6. How Are Protests Decided? • The most common questions that will be asked include: • Was the award decision consistent with relevant procurement laws and regulations? • Did the evaluation team follow the evaluation criteria that was stated in the RFP/RFQ? • Was the award decision reasonable? • Was the award decision supported with adequate documentation? • The standard of review is highly deferential and focuses on the reasonableness of the Government’s actions • The overwhelming majority of successful protests identify objective and/or procedural errors

7. Typical Protest Remedies • Modification of the Solicitation • Re-Evaluation of Proposals • Re-Opening of Discussions • Solicitation of Revised Proposals • Contract Termination • Partial Recovery of Protest Costs

8. Where Can You Protest?

9. Where Can You Protest? • The protester elects the forum in which it will bring the protest • Agency • GAO • Court of Federal Claims • Choice of forum is critical and has a lasting effect on future proceedings relating to the procurement

10. Key Differences

11. Choice of Forum – GAO Statistics • From the prior fiscal year. • Based on the protester obtaining some form of relief from the agency, as reported to GAO. • Alternative Dispute Resolution. • Percentage resolved without formal GAO decision. • Percentage of fully developed decisions in which GAO conducted a hearing.

12. WHAT ARE THE TIMELINES?

13. Timeliness Overview • Defective Solicitation • Protests based on solicitation defects apparent prior to the deadline for receipt of initial proposals must be filed before the due date for receipt of initial proposals • Protests based on solicitation improprieties subsequently introduced into the solicitation (e.g., through amendments) must be filed prior to the next deadline for receipt of proposals • All other protest grounds • To obtain automatic stay, must be filed the later of 5 days of requested and required debriefing or 10 days of contract award

14. Importance of Timeliness Requirements • Absent extraordinary circumstances, the deadlines are strictly enforced • Untimely protests will (likely) be dismissed even if meritorious • Your company’s legal team and the business capture team need to work together seamlessly

15. GAO Protests: Pre-Protest Timeline

16. GAO Protests: Post-Protest Timeline

17. GAO Protests: Post-Protest Timeline

18. PRE-AWARD PROTESTS

19. Common Pre-Award Protest Arguments • RFP/RFQ Ambiguities • A solicitation is ambiguous if: • It is subject to two or more reasonable interpretations • It contains patent inconsistencies • Request, in writing, that the CO provide written clarification of ambiguous solicitation provisions • A patent ambiguity must be protested prior to submitting a proposal • Once the deadline for receipt of proposals passes, it is too late to protest • You cannot successfully protest the terms of the solicitation in a post-award proceeding • Improper Evaluation Methodology • Unduly Restrictive Specifications

20. POST-AWARD PROTESTS

21. Common Post-Award Protest Allegations • Incorrect Technical Evaluation • Incorrect Price/Cost Evaluation • Lack of Meaningful Discussions • Departure From Stated Evaluation Criteria • Flawed Best Value Decision

22. UNDERSTANDING THE PROTECTIVE ORDER

23. What Is A Protective Order? • A Protective Order is a binding agreement that governs the release of and access to certain types of data • A party that is not admitted to the Protective Order cannot have access to confidential/proprietary and/or source selection information • Protected information includes: • Any information identified as protected • Any information derived from protected information • If one or more parties wouldn’t want the information to be revealed, it is probably protected • Violation of a protective order may result in: • Dismissal of the protest • Exclusion from the procurement • Significant sanctions against counsel

24. Protective Order Admissions • Who is allowed? • Outside Protest Counsel • Outside Expert Consultants • In-House Litigation Counsel • Who is not allowed? • Other Employees of the Offerors • Other Employees of the Offerors’ Teammates/Subcontractors • Anyone Involved in “Competitive Decisionmaking”

25. “Competitive Decisionmaking” Certification • “I hereby certify that I am not involved in competitive decisionmaking for or on behalf of any party to this protest or any other firm that might gain a competitive advantage from access to material disclosed under the protective order.” • “[N]either I nor my employer provides advice concerning or participates in decisions about marketing or advertising strategies, product research and development, product design, or competitive structuring and composition of bids, offers, or proposals with respect to which the use of protected material could provide a competitive advantage.”

26. Expert/Consultant Admissions • In order to be admitted under a Protective Order, an expert/consultant: • Cannot be employed by an offeror or any of its teammates • Cannot be engaged in competitive decisionmaking • Cannot have any active or recent consulting arrangements with any of the parties to the protest • Cannot have a financial interest, or have a family member with a financial interest, in any of the parties to the protest • Must agree to future exclusions from proposal support

27. Navigating The Protective Order • Before Issuance of the Protective Order • Outside counsel can communicate freely with the internal business team • These discussions should focus on the competition writ large and the perceived errors in the Government’s actions • This is the time to ask questions • All questions are good questions

28. Navigating The Protective Order (Cont’d) • After Issuance of the Protective Order • Communications with the protest team will be restricted • The protest team cannot disclose protected information or ask questions that would reveal protected information • The protest team can ask general questions (providing no context) to secure needed information • The protest team can provide certain limited information • General information regarding procedural protest developments • Redacted copies of pleadings (containing very limited information) • Overall assessment of the likelihood of success

29. PREPARING FOR A PROTEST

30. A Comprehensive Plan Of Attack • The business and legal teams should coordinate all actions well in advance of the protest • The business team should provide the RFP/RFQ to the legal team as soon as the document is issued so that a parallel review can be conducted • Potential solicitation defects should be identified and researched as early as possible • Consider filing a pre-award protest if the Government fails to rectify the issue • In a post-award context, the business and legal team should work hand-in-hand to analyze the debriefing (if required) or Government-provided explanation as to why your company lost the procurement

31. Business Team Responsibilities • Educate the protest team regarding the solicitation, the company’s proposal, areas of concern, ongoing dialogue with the agency, and the agency’s evaluation • Provide the protest team with copies of all important solicitation and evaluation documents • Inform the protest team of any specific concerns and provide updates as necessary • Identify potential experts/consultants

32. Protest Team Responsibilities (Protester) • Review the RFP/RFQ, any bidders’ conference materials, Q&As and all RFP amendments • This will permit an understanding of the requirements and evaluation structure and identification of potential pre-award protest grounds • Understand the proposal • Learn the technical aspects of the procurement • Understand the objectives, strengths and weaknesses of the offeror • Understand the competitor’s objectives, strengths and weaknesses • Review and analyze all communications with the Government • Interview expert consultants • Provide legal advice • Avoid competitive decisionmaking

33. Protest Team Responsibilities (Awardee) • Offer support to the Agency • Legal research and analysis • Preparation of white papers • Maintain frequent communication • Prepare arguments rebutting protest allegations

34. RECENT LEGISLATIVE CHANGES

35. 2018 NDAA • National Defense Authorization Act • Signed by POTUS on December 12, 2017 • Key areas of protest reform include: • Enhanced post-award debriefing rights • Pilot program on payment of costs for denied GAO protests

36. Enhanced Post-Award Debriefing Rights • Section 818 – within 6 months of passage of law, the Secretary of the DoD must revise the DFARS to require that all post-award debriefings include, at a minimum: • Disclosure of the Agency’s source selection award determination • Contract must be in excess of $100M • If award is between $10M and $100M with a small business or nontraditional defense contractor, the company must be able to request such disclosure

37. Enhanced Post-Award Debriefing Rights (Cont’d) • Must also include . . . • A requirement for a written or oral debriefing for all contract awards and task or delivery orders valued in excess of $10M • “Robust procedures” to protect the confidential and proprietary information of all offerors • Within 2 business days of a debriefing, offerors are now allowed to submit additional questions relating to the debriefing • Agency must respond in writing to the questions within 5 business days after receipt of the questions

38. It’s Already Here! • Implemented via Class Deviation on March 22, 2018 • Offerors have 2 business days to submit questions after receiving the debriefing • The Agency must respond in writing within 5 business days • Debriefing not concluded until after the Agency responds to the offeror’s questions

39. Practical Impacts of Section 818 • Potential extension of CICA stay (triggered by close of debriefing) • Companies may decline to file protests after reviewing the redacted source selection information and receiving additional information in response to follow-up questions from debriefing • Redactions still leave a lot of the story “untold” and companies may still want to protest if the material provided doesn’t “smell” right

40. Pilot Program on Payment of Costs • Section 827– DoD Secretary is required to carry out a pilot program to determine the effectiveness of requiring contractors to reimburse DoD for costs incurred in processing “covered protests” • A “covered protest” is • One that is denied in an opinion issued by the GAO • Filed by a party with revenues in excess of $250M during the previous year; and • Filed on or after October 1, 2019 and on or before September 30, 2022

41. Practical Impacts of Section 827 • Much is undefined (e.g., no definition of processing costs) • Industry frustration over “punitive” measures • Purpose of protesting is to make sure the Government is doing its job. Why should anyone have to pay for that? • Many will game the system • Simply withdraw the protest before GAO issues its decision • May increase protest volume at the COFC

42. THAT WAS A LOT! Questions? We’re here to help…