BOSTON // HARTFORD // NEW YORK // NEWARK // STAMFORD // PHILADELPHIA // WILMINGTON Significant Bid Protest Decisions from 2009 Gary J. Campbell, Esq. & Bonnie A. Vanzler, Esq. March 10, 2010

2 Overview ♦FY2009 Bid Protest Statistics ♦Significant Protest Decisions –GAO –Court of Federal Claims –Federal Circuit

3 ♦Total protests filed = 1,989 (~20% increase) –Why? In part, GAO’s expanded bid protest jurisdiction  Task Order protests (139)  TSA protests (13) ♦Protests sustained = 57 ♦Increase in corrective action by agencies ♦Hearings conducted = 65 ♦100% increase in ADR GAO Bid Protest Statistics for FY2009

4 Task and Delivery Order Jurisdiction ♦Armorworks Enters., LLC, B (Nov. 6, 2009)Armorworks Enters., LLC, B (Nov. 6, 2009) –Protest of three separate delivery orders ♦GAO will not aggregate separate delivery orders to get over the $10M jurisdictional threshold –Each delivery order was valued under $10M –No basis to find that the separate delivery orders reflected a single requirement –No showing that Army’s decision to procure items separately was a deliberate effort to evade jurisdiction

5 Task and Delivery Order Jurisdiction ♦Innovative Tech. Corp., B (Nov. 9, 2009)Innovative Tech. Corp., B (Nov. 9, 2009) ♦GAO’s jurisdiction to consider protests of task orders in excess of $10M extends to protests objecting to the terms of the task order solicitation –Do not need to wait until an order exceeding $10M is actually issued to file a protest ♦As incumbent contractor, ITC knew (or should have known) task order would be valued >$10M –Alleged solicitation improprieties were apparent on the face of the RFP –Post-award protest dismissed as untimely

6 GAO Will Not Review Agency Management Decisions ♦Aleut Facilities Supp. Servs., B (Oct. 23, 2009)Aleut Facilities Supp. Servs., B (Oct. 23, 2009) –Protest of cancellation of solicitation ♦GAO has jurisdiction to review reasonableness of agency decisions to cancel solicitations ♦But GAO will typically not review a decision to cancel a solicitation to perform work in-house –An agency’s decision to perform work in-house is generally a matter of executive branch policy –None of the limited exceptions are applicable here

7 Timely Filing a GAO Protest ♦RTI Technologies, LLC, B (April 15, 2009)RTI Technologies, LLC, B (April 15, 2009) ♦Must protest adverse action on agency-level protest within 10 days of agency response –Complaint does not have to be an actual “protest” ♦Contractor cannot wait until after it receives a required debriefing to protest the issue to GAO –But grounds of protest that first become known at the debriefing may be timely if filed within 10 days of the debriefing (or within 5 days to get automatic stay)

8 Bidders Must Seek Timely Debriefings ♦UMASS Donahue Inst., B (July 15, 2009)UMASS Donahue Inst., B (July 15, 2009) –Post-award protest filed more than 3 months after protester’s proposal was eliminated from competition ♦Exception to timeliness rules based on receipt of a debriefing does not apply where protester delayed debriefing on elimination of its proposal until after contract award ♦Protest dismissed as untimely –Debriefing did not provide any more information or raise any additional protest grounds

9 Agency Cannot Relax Its Evaluation Scheme Without Giving Notice to Bidders ♦The S.M. Stoller Corp., B (Mar. 25, 2009)The S.M. Stoller Corp., B (Mar. 25, 2009) ♦The evaluation scheme announced in the solicitation must be consistent with the evaluation actually conduced by the agency ♦Department of Energy cannot waive or relax its requirements without giving notice to bidders –The absence of an express prohibition is not an authorization to deviate from the terms of the PWS –Bidders must be allowed to submit bids on the basis stated in the solicitation

10 Bidder Does Not Get Automatic Credit for the Past Performance of its Affiliates ♦Health Net Fed Servs., Inc., B (Nov. 4, 2009)Health Net Fed Servs., Inc., B (Nov. 4, 2009) –GAO sustained protest of $16 billion contract award ♦DoD conducted flawed past performance evaluation –Awardee should not be credited for affiliates who were not involved in performing the prior contracts –Proposal did not identify the roles each affiliated entity would perform if awarded the contract –Awardee’s past performance references were very small in relation to the size of the contract to be awarded

11 Even the Appearance of Impropriety May Disqualify an Offeror from Competition ♦Health Net Fed Servs., Inc., B (Nov. 4, 2009)Health Net Fed Servs., Inc., B (Nov. 4, 2009) –GAO sustained protest of $16 billion contract award ♦Use of former high-level gov’t employee in preparing proposal created appearance of impropriety –This gave the awardee unequal access to non-public, competitively useful information ♦May be disqualified from competition even if there is no actual impropriety or real competitive advantage

12 Access to Competitive Information May Bar Contractors from Future Competitions ♦Kellogg Brown & Root Servs., B (Feb. 23, 2009)Kellogg Brown & Root Servs., B (Feb. 23, 2009) ♦Contractor was properly excluded from future task order competitions because: –(1) it had access to source-selection sensitive and proprietary information; and –(2) it refused to “wall off” or isolate those individuals who had the information from the competitions ♦Protester does not need to show that contractor actually gained an unfair competitive advantage ♦Contractor may be excluded from competition even if it permanently deletes information

13 Price and Cost Evaluations Must Meaningfully Consider Price ♦ACCESS Systems, Inc., B (Mar. 4, 2009)ACCESS Systems, Inc., B (Mar. 4, 2009) –Best-value, 8(a) government-wide acquisition contract –Contract awarded to higher-priced quotation ♦Even where price is less important than non-price factors, agency must meaningfully consider price –Marine Corps conceded that it did not weigh price –Marine Corps did not identify any superior capabilities to justify making the higher-priced award ♦To make an award to a higher-priced offeror, one firm’s technical advantage must be determined to outweigh the other firm’s price advantage

14 Agency’s Discussions Must Treat Offerors Fairly, If Not Equally ♦Ashbury Int’l Group, Inc., B (June 1, 2009)Ashbury Int’l Group, Inc., B (June 1, 2009) ♦Protester downgraded for failure to include information that was not required by solicitation –Protest sustained because Marine Corps failed to conduct “meaningful” discussions ♦Instead, agency should have: –(1) Amended the solicitation to include the changed requirements; or –(2) Conveyed its new requirements during discussions with offerors

15 Agency’s Corrective Action Discussions Must be “Equal” and “Meaningful” ♦Am. K-9 Detection Servs., B (May 5, 2009)Am. K-9 Detection Servs., B (May 5, 2009) ♦Army took corrective action, but allowed only the awardee to fix its defective proposal –Army also failed to account for other significant weaknesses or deficiencies in the proposal –Did not allow protester the opportunity to engage in discussions with Army to become more competitive ♦GAO held that Army improperly engaged in “unequal, not meaningful discussions”

16 Contracting Officer Must Address OCIs ♦L-3 Services, Inc., B (Sept. 3, 2009)L-3 Services, Inc., B (Sept. 3, 2009) ♦Subcontractor’s prior procurement planning work created an unmitigable “biased ground rules” OCI –Precluded subcontractor from participating in subsequent procurement ♦Subcontractor’s prior work also gave it unequal access to competitively useful, non-public information (“unequal access to information” OCI) –Air Force failed to adequately investigate and analyze the OCI and the efficacy of a mitigation plan

17 Contracting Officer Must Address OCIs ♦The Analysis Group, LLC, B (Nov. 13, 2009)The Analysis Group, LLC, B (Nov. 13, 2009) ♦Protest sustained because successful vendor had “impaired objectivity” OCI where: –RFQ for advice and assistance on counter proliferation of WMDs –Vendor sells detection and prevention products ♦GSA did not adequately consider the possibility of an OCI and whether it could be avoided, neutralized, or mitigated

18 Federal Supply Schedule Contracts Must Include All Items that Will be Ordered ♦SAIC, B (Nov. 10, 2009)SAIC, B (Nov. 10, 2009) ♦A purchase order issued under a FSS contract must include only those items currently on the awardee’s FSS contract –Non-FSS items must be purchased using full and open competition procedures –Addition to Schedule before delivery date not enough ♦Where an agency orders from an existing FSS contract, all items quoted and ordered must be on a vendor’s FSS contract “as a precondition to its receiving the order”

19 Agency Rejection of GAO’s Recommendations ♦Mission Critical Solutions, B (May 4, 2009)Mission Critical Solutions, B (May 4, 2009) ♦GAO: 15 U.S.C. § 657a requires agencies to set aside contracts for HUBZones when: (1) at least two HUBZone small businesses will bid; and (2) the winner can offer a fair price –HUBZone set-asides have priority over other set-asides –GAO ordered Army to re-open a sole-source award to a non-HUBZone 8(a) small business ♦Army: § 657a is permissive, not mandatory –Army refused to follow GAO’s decision

20 COFC Bid Protest Statistics for FY2009 ♦Total protests filed = 74 –Pre-Award Protests = 22 –Post-Award Protests = 52 ♦Protest Decisions = 57 (50 published)

21 IDIQ Task Order Jurisdiction ♦Global Comp. Enter. v. U.S., 88 Fed. Cl. 52 (May 29, 2009)Global Comp. Enter. v. U.S., 88 Fed. Cl. 52 (May 29, 2009) –Protest of task order modifications, claiming modifications exceeded the scope of task order and should have been competed ♦COFC has jurisdiction –FASA only prohibits protests “in connection with” the “issuance” or “proposed issuance” of a task order –Task order modifications occur after the issuance of a task order

22 Override of Automatic Stay ♦The Analysis Group v. U.S., No C (Oct. 30, 2009)The Analysis Group v. U.S., No C (Oct. 30, 2009) –Post-award protest seeking reinstatement of stay of performance pending GAO protest of task order award ♦Override of automatic stay was not arbitrary and capricious –Stay would result in lapse of services –Incumbent-plaintiff had poor working relationship with awardee –Benefits of authorizing performance outweighed potential costs of override

23 National Security Interests and Proposal Evaluation Techniques ♦Red River Holdings v. U.S., 87 Fed. Cl. 768 (July 17, 2009)Red River Holdings v. U.S., 87 Fed. Cl. 768 (July 17, 2009) –Post-award protest for failure to follow solicitation’s technical requirements and not evaluating offerors equally ♦Awardee did not satisfy technical requirements and Navy’s award violated CICA –But because of national security concerns, awardee could perform during the initial performance period plus one option period –Protester awarded bid preparation costs

24 National Security Interests and Brand Name Procurements ♦DataPath, Inc. v. U.S., 87 Fed. Cl. 162 (May 29, 2009)DataPath, Inc. v. U.S., 87 Fed. Cl. 162 (May 29, 2009) –Pre-award protest challenging Army solicitation of a specific brand name manufactured by only one manufacturer ♦Protest denied, dismissed without prejudice –Brand name justified to prevent significant cost, delay, and risk to military –Interests of fair and open competition did not outweigh national defense and security interests

25 Superior Incumbent Performance Does Not Guarantee Subsequent Award ♦Software Eng’g Serv. v. U.S., 85 Fed. Cl. 547 (Feb. 5, 2009)Software Eng’g Serv. v. U.S., 85 Fed. Cl. 547 (Feb. 5, 2009) –Post-award protest of IDIQ contract awards ♦SES alleges arbitrary and capricious evaluation because: –Certain relevant proposal sections not evaluated –Superior incumbent performance not considered ♦Protest denied because: –Evaluation documents don’t need to discuss every section –Offeror must demonstrate capabilities through explicit description in proposal

26 Use of Bridge Contracts ♦Viromed Laboratories, Inc. v. U.S., 87 Fed. Cl. 493 (June 8, 2009)Viromed Laboratories, Inc. v. U.S., 87 Fed. Cl. 493 (June 8, 2009) –Motion for Sanctions against U.S. for use of bridge contract –Viromed protested award at GAO, then COFC ♦Settlement resulted in court order with corrective action –Including reconstituted of evaluation board ♦In interim, agency issued RFQ for bridge contract with same evaluation board ♦Court denied because order was for long-term provision of HIV services

27 Federal Circuit: Price Realism ♦Alabama Aircraft Indus., Inc.—Birmingham v. United States, 586 F.3d 1372 (Fed. Cir. Nov. 17, 2009)Alabama Aircraft Indus., Inc.—Birmingham v. United States, 586 F.3d 1372 (Fed. Cir. Nov. 17, 2009) –Appeal of COFC protest of price realism analysis ♦COFC’s review of agency action should be limited to whether the Air Force’s evaluation was consistent with the RFP –COFC cannot rewrite the RFP’s evaluation criteria ♦Federal Circuit enforcing strict limits on the COFC’s review of bid protests

28 Federal Circuit: Standing ♦Labatt Food Services, Inc. v. United States, 577 F.3d 1375 (Fed. Cir. Aug. 24, 2009)Labatt Food Services, Inc. v. United States, 577 F.3d 1375 (Fed. Cir. Aug. 24, 2009) –Appeal from COFC decision to vacate contract award ♦Protester lacked standing to challenge contract award and procurement procedures –Because failed to submit a timely proposal revision and could therefore not be considered for award ♦Agency did not consider Labatt’s final proposal submission because it was: (1) late; and (2) submitted via unauthorized manner

29 Questions? Gary J. Campbell McCarter & English 265 Franklin Street Boston, MA Bonnie A. Vanzler McCarter & English 265 Franklin Street Boston, MA