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Morris Manning & Martin, LLP

GAO Sustains Three Protests in June

07.07.2020

There are three types of protests at the Government Accountability Office (GAO): pre-award bid protests, post-award bid protests, and corrective action protests. June was a notable month because GAO issued decisions sustaining each type of protest. This "hat trick" is noteworthy because a successful challenge to an agency's corrective action is extremely uncommon.

This corrective action protest followed a successful post-award bid protest by the same contractor. GAO sustained the prior post-award bid protest after finding that the agency's evaluation was unreasonable because it relied on a materially flawed independent government estimate. When it sustained the protest, GAO recommended that the agency either devise a new method to evaluate price realism and reasonableness or revise its acquisition strategy to change how it evaluated proposals. Under either scenario, GAO recommended that the agency conduct a new evaluation and make a new award decision.

When the agency announced its intended corrective action plan, it advised offerors that it would re-evaluate proposals, and in this evaluation, it would remove the realism analysis. However, the agency did not issue an amended solicitation and it did not give offerors the opportunity to submit revised proposals. The protester challenged the corrective action, arguing the agency revised the evaluation criteria without giving offerors an opportunity to revise their proposals.1

The protest turned on whether removing the realism analysis constituted a material change to the solicitation because, under GAO case law, if an agency makes a material change to a solicitation, it must give offerors an opportunity to submit revised proposals. GAO found the realism analysis was a material term because (1) offerors had increased their prices after being told their rates were unrealistically low during discussions, (2) the protester had been deemed ineligible for award because of its purportedly unrealistic rates, and (3) the protester would have proposed different labor rates and staffing if the solicitation had not called for a realism analysis. GAO found that by failing to allow offerors to submit revised proposals, the agency was denying offerors the ability to compete intelligently and on a comparatively equal basis. GAO sustained the protest and recommended that if the agency determines a price realism analysis is no longer needed, that it amend the solicitation and solicit revised proposals.

The second protest involved a challenge to the award of a task order for consultation, research, and development activities related to influenza epidemics and pandemics. The protester contested many aspects of the agency's evaluation of the offerors' proposals, but GAO sustained the protest on one protest ground: disparate treatment.

The solicitation required offerors to describe how their proposed technical approach would meet the requirements in the statement of work, and the agency had assigned the protester a weakness for failing to address a specific subtask in its proposal. The protester argued that the awardee also failed to address the same subtask but did not receive a weakness. GAO agreed with the protester, noting that the proposals were "substantively indistinguishable" in their discussion of this subtask.

Although GAO found disparate treatment, that finding could have been insufficient to sustain the protest. In this case, the protester's proposal had received seven weaknesses, and for its protest to be sustained, the protester needed to demonstrate competitive prejudice. Put another way, the protester needed to show it would have been selected for award but for the erroneously assigned weakness. GAO found competitive prejudice because the agency had considered the two proposals to be technically equivalent, and the awardee's price was lower by a margin of less than two percent. Given the closeness in the evaluation, GAO found one evaluation error could have impacted the best value determination. GAO sustained the protest on this basis.

In the pre-award bid protest, the protester raised two challenges to a task order solicitation seeking a contractor to provide audit readiness support. The solicitation required the prime contractor to either be an independent public accountant (IPA) or propose an IPA affiliate. The agency would not accept an IPA subcontractor to meet the requirement. In its first attack on the solicitation, the protester argued this requirement was unduly restrictive of competition. GAO began its analysis by stating the well-established principle that a contracting agency may include restrictive requirements only to the extent they are necessary to satisfy its legitimate needs. To defend the requirement, the agency relied on an email from the program manager in which she stated an IPA would provide higher quality work. GAO rejected this justification as insufficient, observing the agency had not offered empirical evidence or other support. GAO also found the agency had not shown why the IPA could not be a subcontractor because the agency again relied upon unsupported assertions from the program manager.

As its second argument, the protester contended that the solicitation impermissibly exceeded the scope of the indefinite-delivery, indefinite-quantity (IDIQ) contract that it was issued under. When an agency issues a task order under an IDIQ contract, there must not be a material difference between the task order and the IDIQ contract. As explained by GAO, "[t]he overall inquiry is whether the task order is of a nature that potential offerors would reasonably have anticipated." Here, the protester argued that offerors would not have anticipated that the agency would require work to be performed by only an IPA, and GAO agreed. GAO reasoned that although the task order and IDIQ contract both contemplated audit support services, the solicitation requirement that audit services be performed only by an IPA was materially different. This meant the task order exceeded the scope of the underlying contract, providing a second basis to sustain the protest.

If you have questions about bid protests, you may contact any member of the Government Contracts team.

[1] The protester also argued that the corrective action was improper because the agency had not implemented an evaluation methodology to accurately evaluate price reasonableness. GAO dismissed this aspect of the protest as premature, finding it could not assess the reasonableness of the evaluation until it had been carried out.