The Pros and Cons of Agency-Level Protests

In my previous post, I wrote about the basics of an agency-level protest. In this post, I will explore some of the main advantages and disadvantages of filing an agency-level protest.

So, what are the benefits of filing an agency-level protest? First, they do tend to be quicker and less expensive than GAO or COFC protests, and they allow protestors a second opportunity to pursue their protest at GAO or COFC. In other words, an agency-level protest may let a protestor test the waters before all-out committing to the cost associated with a GAO or COFC protest.

The Nuts and Bolts

As most federal contractors are aware, unlike commercial contracts, federal contractors may challenge solicitation defects or contract award decisions made by the government through the bid protest process. Although protests at GAO and the Court of Federal Claims receive most of the attention due to the fact that their decisions are ultimately made public (at least in part), another forum also exists for disappointed offerors: protests made directly to the agency. This post is part one of a two-part series. This post will provide the basic nuts and bolts of the agency-level protest, and part two will provide the pros and cons of this specific approach.

The Court of Federal Claims (CoFC) recently held that an offeror was not obligated to inform the agency of staffing changes, affecting its key personnel, that occurred following its proposal submission. This new CoFC decision conflicts with longstanding GAO precedent.

Key personnel are often a significant part of proposals and can greatly increase or diminish

If you are excluded from the competitive range in a procurement, you have a right to request a debriefing (within 3 days) to learn why. 41 U.S.C. § 3705(a). But the scope of that pre-award debriefing is more limited than a post-award debriefing. Pre-award debriefings cover the agency’s evaluation of “significant elements” of the excluded contractor’s offer, the rationale for the exclusion, and “reasonable responses to relevant questions” posed by the excluded offeror. 41 U.S.C. § 3705(d). But they expressly cannot cover the total number or identities of offerors, or the “content, ranking, or evaluation” of the other offerors’ proposals.  41 U.S.C. § 3705(e). That information is available only in post-award debriefings.  41 U.S.C. § 3704(c).  This difference in scope may create the temptation to delay a pre-award debriefing until after award in the hope that you will gain more information. But giving in to that temptation may preclude a protest at GAO.

No one will argue against the need to improve cybersecurity. We should limit the vulnerability of critical infrastructure and preserve the confidentiality of military technology, private company trade secrets, and individual medical records.

But there is a significant cost to upgrade IT systems in order to achieve this goal. The federal government will pay more to contractors who can meet heightened cybersecurity standards. If cybersecurity standards are too restrictive, qualified contractors will be driven away from federal contracting. At a minimum, new cybersecurity standards will mean more grounds for bid protests, which are the focus of this post.

First, the background

Executive Order No. 13636 (Feb. 12, 2013) [pdf] called for agencies to publish guidance on mitigating cybersecurity threats in federal procurement. In November 2013, DOD and GSA released a joint report recommending that compliance with an established cybersecurity protocol be a precondition to the award of information and communication technology (“ICT”) contracts. See Improving Cybersecurity and Resilience through Acquisition, Final Report of the Department of Defense and General Services Administration (Nov. 2013) [pdf].

The National Institute for Standards and Technology (“NIST”) released its voluntary framework for improving cybersecurity for critical infrastructure in February 2014. See Framework for Improving Critical Infrastructure Cybersecurity, Version 1.0 (Feb. 12, 2014) [pdf]. The NIST Framework is a tool for organizations seeking to measure and improve their cybersecurity programs against an ideal. The Framework encourages organizations to improve their cybersecurity programs “when such a change would reduce cybersecurity risk and be cost effective.” Compliance is not yet mandatory, but legislation incentivizing or requiring compliance should be expected.

These are by no means the first cybersecurity standards for federal contractors, but they would broaden and increase existing requirements. As they are implemented, cybersecurity requirements will certainly lead to an increase in pre- and post-award bid protests for ICT contracts. We see them principally in three areas.

The GAO’s decision in BC Peabody Constr. Serv., Inc., B-408023 (May 10, 2013) [pdf] illustrates the importance of establishing prejudice in a bid protest. The protester alleged that it proposed the same subcontractor (Bauer Foundation Corporation) as the awardee proposed on a dike rehabilitation project. Both offerors relied on Bauer for the “cut-off wall,” a critical element of the project. Both proposals showed that Bauer had the required experience for the cut-off wall.

Despite their use of the same subcontractor, the Corps of Engineers nevertheless assigned the awardee and the protester different scores for the cut-off wall element of their proposals. The Corps rated the awardee’s proposal acceptable for both the demonstrated experience and past performance subfactors, but it rated the protester’s proposal unacceptable.  The GAO agreed the Corps’s action was procurement error. “Where multiple proposals propose the same contractor, once the agency becomes aware of that subcontractor’s experience . . . it cannot reasonably assign one proposal a higher score than another based on that experience.” GAO nevertheless denied the protest.

Organizational Conflicts of Interest arise when a contractor’s work on one government contract gives it an unfair advantage in competing for a second contract or when it impairs the contractor’s ability to give impartial advice to the government.  Although FAR 9.5 offers general guidance on OCIs, GAO guidance on the issue is not currently reflected there.  In April 2010, the Defense Department proposed sweeping revisions to the DOD FAR Supplement to incorporate GAO caselaw addressing OCIs and to make it clear that the new OCI rules would apply to all DOD procurements. 75 Fed. Reg. 20954 (Apr. 22, 2010).  Final regulations were published December 29.  75 Fed. Reg. 81908 (Dec. 29, 2010).