Bid Protest Law : Government Contracts Lawyer & Attorney : K & L Gates Law Firm : Contract Compliance, Bid Protests

GAO recently clarified the scope of its newly acquired jurisdiction over task and delivery orders in excess of $10 million under indefinite-delivery/indefinite quantity (IDIQ) contracts. GAO rejected the agency's jurisdictional challenge holding that it was authorized to consider the protest under section 843 of the National Defense Authorization Act of Fiscal Year 2008 (NDAA), Pub. L. 110-181, 122 Stat. 3, 236-39 (2008), which modified the Federal Acquisition Streamlining Act of 1994's (FASA) prior limitations on task and delivery order protests. GAO further clarified that its newly acquired jurisdiction under the NDAA was not limited in scope, and instead conferred "the same substantive protest jurisdiction conferred by [the Competition in Contract Act of 1984 (CICA) and FASA]."

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GAO sustained the protest of an excluded potential bidder finding that solicitation from three sources may not be enough to meet the requirement that agencies "promote competition to the maximum extent practicable" under simplified acquisition procedures. GAO found that the acquisition specialist "clearly knew" protester was interested in providing the required products and she did not have a reasonable basis to exclude them. GAO sustained the protest on this basis even though the agency solicited bids from three sources as required by FAR 13.104(b).

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In its May 2, 2009 decision, GAO sustained the latest in a series of protests by American K-9 Detection Services, Inc. (AK-9) on the grounds that the Army improperly limited discussions and in doing so, failed to give AK-9 the opportunity to submit an improved final proposal revision addressing the significant weaknesses or deficiencies in its proposal that were noted in the Army’s award decision. The protest was the sixth of AK-9’s protests against the award of a fixed-price indefinite-delivery, indefinite-quantity contract for contractor working dog services in Afghanistan. Award of the one-year contract with four option years was made to EOD Technology, Inc. (EODT) at a price of $38,350,935.

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GAO's report to congress outlining bid protest activity at GAO for fiscal years 2004-2008 reveals that while bid protest filings were up 17% in 2008, GAO's sustain rate was only 21%, the lowest seen since 2004. Of the 1,652 cases filed at GAO in 2008, 87 were attributable to its expanded bid protest jurisdiction for task orders, A-76 protests and TSA protests. However, even without this expanded jurisdiction, filings were still up by 10.9%. GAO also saw its lowest percentage of hearings in 2008, with hearings held in only 6% of cases.

IMPACT: Contrary to some recent published comments, this report demonstrates that the GAO sustain rate in fact is down. Nonetheless, we believe that the coming year will see a continued increase in protest activity given the economic climate. Disappointed offerors in each instance should consider the pros and cons of filing protests at GAO, the agencies at issue or the United States Court of Federal Claims. 

www.gao.gov/special.pubs/bidpro08.pdf

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Citing 10 reasons in a 67-page opinion, GAO sustained a protest filed by The Boeing Company (“Boeing”) of the highly-publicized award by the Air Force to Northrop Grumman Systems Corporation (“Northrop”) for its new generation aerial refueling tankers.  Boeing prevailed on several garden variety protest grounds often seen, but usually unsuccessful in GAO protests.  Here, GAO found that the Air Force made “significant errors” in evaluating proposals, engaged in inadequate and unequal discussions, improperly evaluated costs, and therefore made an improper source selection decision.  GAO also addressed several other arguments, including those related to timeliness and document requests under GAO regulations.

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The Court of Federal Claims issued a permanent injunction prohibiting purchase by the Marine Corps System Command of up to 300 Large Field Refrigeration Systems (“LFRS”) from Sea Box, Inc. (“Sea Box”) finding that the agency’s determination that the LFRS’ were compliant with the Trade Agreements Act (“TAA”) was arbitrary and capricious.  After GAO denied its protest, Sea Box filed a motion in the Court of Federal Claims (“CFC”) to enjoin the agency from proceeding with the procurement.  The agency agreed to voluntarily stay the procurement pending the CFC protest.  The CFC entered a permanent injunction, finding that the award to Sea Box was “arbitrary, capricious, and not in accordance with the law.”

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Using its new authority to hear protests of task and delivery orders involving procurements over $10 million, GAO sustained the protest of Delex Systems, Inc. (“Delex”) of the Department of Navy, Naval Air Systems’ (“NAVAIR”) issuance of a delivery order under a multiple award contract as unrestricted.  Delex argued, and GSA agreed, that task and delivery orders issued under multiple-award schedule contracts are subject to the small business set-aside provisions of FAR § 19.502-2(b) and that the contracting officer’s determination that the agency had no reasonable expectation of receiving offers from two responsible small businesses was unreasonable.

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GAO sustained a protest by Fedcar Company, Ltd (“Fedcar”) of the General Services Administration’s (“GSA’s”) award to Duke Realty Limited Partnership (“Duke”) of a 15-year contract for the construction and lease of a “fully-serviced FBI campus facility.”  GAO held that GSA’s source selection decision was not reasonable because it used an incorrect calculation to determine Duke’s price.  GAO also held that the evaluation of the relative merits of the proposals was insufficiently documented.

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GAO sustained the protest of Native American Industrial Distributors, Inc. (“NAID”) of the Bureau of Indian Affair’s (“BIA’s”) award of a fixed-price contract to Chenega Federal Systems, LLP, for information technology infrastructure services.  BIA set aside the solicitation under the Buy Indian Act, which permits a preference in purchasing the products of Indian industry.  NAID challenged BIA’s determination that Chenega was eligible for awards of contracts set aside under the Buy Indian Act.  GAO disagreed, upholding BIA’s method for determining eligibility.  NAID added a supplemental protest after BIA provided the administrative record challenging Chenega’s failure to provide required letters of commitment from proposed key personnel.  GAO sustained on this basis, but as can be seen below, a sustained protest does not always yield the outcome a protester wants.

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