Hot Issues in Federal Bid Protests
National 8(a) Association Annual MeetingJune 22-23, 2011
Rick Oehler Christine Williams Don Carney
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Perkins Coie
Offices: 18 across the United States and China, including Anchorage, Seattle and D.C.
Perkins has represented ANCs for well over 30 years
Perkins has a strong government contracts practice
Law360 Government Contracts Group of 2010
web based resources for government contractors
http://www.perkinscoie.com/government_contracts/
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Three Part Panel Presentation
Introduction
Part I
Overview
Debriefings
Part II
Small Business Issues
Part III
Alternative Forums
Standing and Typical Bid Protest Issues
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GAO: Cases Filed
-9% +6%
+17%
+20%
+16%
-2%
1,356 1,326 1,411 1,6521,989
2,299
0
500
1,000
1,500
2,000
2,500
FY05 FY06 FY07 FY08 FY09 FY10
Cases Filed
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Bid Protests – Overview
CHARACTERISTICS OF FEDERALPROCUREMENT PROCESS
Generally competitively awarded
Governed by numerous statutes and regulations
Government officials are required to comply with those statutes and regulations, but also have significant discretion
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Bid Protests – Overview
WHAT IS A BID PROTEST?
A formal complaint against some aspect of a federal procurement process which asserts either
A violation of law; or
A decision that lacks any rational basis
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Bid Protests – Overview
VIOLATION OF LAW
Generally only federal procurement law
Statutes (like Competition in Contracting Act or Procurement Integrity Act)
Regulations (like FAR, DFARS or SBA regulations)
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Bid Protests – Overview
DECISION LACKING A RATIONAL BASIS?
A decision or action that lacks any logical support at all
A decision based on materially mistaken or erroneous facts
A decision contrary to the solicitation
A decision based on improper motives
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Bid Protests – Overview
PROTESTS CAN BE MADE AT MANYDIFFERENT POINTS IN THE PROCESS
Prior to the solicitation (example: synopsis of sole-source contract)
After solicitation, but prior to award (example: solicitation with objectionable terms)
After award (disappointed offeror)
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Bid Protests – Overview
REALITY NO. 1 – A FORMAL PROTEST IS NOTTHE PREFERRED APPROACH TO MOSTISSUES
This is business and the government procuring agency is your customer
The customer may not always be right, but good relations must be maintained
Evaluate if there are alternative ways to be persuasive
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Bid Protests – OverviewALTERNATIVE – Letter to Contracting Officer
lowest cost, but may not get review beyond CO's team; may result in review by agency counsel
still need to identify a legally and factually sound basis for change in agency course
prior to agency protest, all parties shall attempt to resolve "concerns" at the CO level. FAR 33.103(b)
responses to notice of proposed sole-source award
pre-solicitation and post-solicitation conferences
Q & A process regarding solicitations
take advantage of opportunities to address inappropriate restrictions and evaluation schemes
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Bid Protests – Overview
REALITY NO. 2 – SOMETIMES A FORMALPROTEST IS THE ONLY WAY TO PROTECTYOUR INTERESTS
When competition is not being permitted
When the Government fails to follow the RFP rules
When a new perspective will help ensure a fair result
When a final decision is dead wrong
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Bid Protests – Overview
REALITY NO. 3 – TO MAKE INTELLIGENTDECISIONS ABOUT WHETHER TO FILE APROTEST, YOU HAVE TO KNOW –
Federal procurement process rules
Bid protest process rules – tight deadlines
Your own objectives in filing a protest
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Bid Protests – Overview
OBJECTIVES IN FILING A PROTEST
Gaining an opportunity to compete at all
Gaining an opportunity to compete on a level playing field
Gaining an opportunity for a second look in an evaluation
Sending a message to shape a procuring agency's future actions
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Bid Protests – Overview
DECISION TO ESCALATE TO PROTEST
May be forced by timing
Action against non-competitive process
Action against overly restrictive RFP terms
Action against perceived violation of Procurement Integrity Act
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Bid Protests – Debriefings
WHAT ARE DEBRIEFINGS?
Informative exchanges required by regulation after exclusion or contract award (FAR 15.505 and 15.506)
Can be face-to-face meeting, telephonic conference or in writing
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Bid Protests – Debriefings
WHO IS ENTITLED?
Offerors excluded from a competitive range
All offerors after an award selection is made
Mandatory only for FAR Part 15 procurements
Not necessarily required for formally advertised (Part 14) or simplified acquisitions
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Bid Protests – Debriefings
WHAT IS A DEBRIEFING AND HOW CAN YOU USE IT?
To help make an informed and intelligent decisions regarding whether to protest
To help obtain information to use in pursuing a successful protest
To obtain additional insights for future competitions
To help position you (as successful contract awardee) to defend against a protest
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Bid Protests – Debriefings
PRE-AWARD DEBRIEFINGS
Offered to offerors excluded from competitive range or otherwise excluded (FAR 15.505)
Make a written request within 3 days of notice
Government to debrief "as soon as practicable" - compelling circumstances can delay until after award
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Bid Protests – Debriefings
PRE-AWARD DEBRIEFINGS
At a minimum pre-award debriefing includes:
Agency evaluation of significant elements of proposal
Summary of rationale for exclusion
Reasonable responses to relevant questions about compliance with procedures and regulations
Other information may be requested
Certain types of information will not be disclosed
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Bid Protests – Debriefings
POST-AWARD DEBRIEFINGS (FAR 15.506)
Offered to offerors after contract award
Make a written request within 3 days of notice
"To maximum practicable extent" held within 5 days of written request
Government can accommodate an untimely request for a debriefing
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Bid Protests – Debriefings
POST-AWARD DEBRIEFINGS (con't)
At a minimum, includes
government's evaluation of requestor's weaknesses and deficiencies
overall evaluated cost or price and technical rating of the awardee and the debriefed offeror
past performance of debriefed offeror
make and model of successful offeror
overall rankings of offerors
summary of rationale for award
reasonable responses regarding procedures
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Bid Protests – Debriefings
GOVERNMENT IS NOT TO DISCLOSE
Point by point comparisons
Trade secrets or confidential processes/techniques
Confidential commercial or financial information
Names of references providing past performance information
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Bid Protests – Debriefings
EFFECTIVE DEBRIEFING TECHNIQUES
Be fully prepared (evaluation criteria, process, focus areas)
Listen closely and read between lines
Ask follow-up questions
Agree in advance on how far to push
Possibly caucus to evaluate how to proceed
Agree to accept additional information
Face-to-face is preferred if possible
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Bid Protests – Debriefings
DEBRIEFINGS OF THE AWARDEE
Authorized by regulation
Potentially useful to –
learn how to improve proposal/ratings
help defend against a protest
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Bid Protests – Debriefings
TIGHT GAO PROTEST TIMELINES
Don will discuss the timeline to file a protest at GAO after a debriefing
However, the timelines are tight
GAO enforces timelines strictly
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Bid Protests – Small Business
Three types covered:
Size Protests
Affiliation/Ostensible Subcontractor
Area Office Determinations and OHA Appeals
NAICS Designation
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SIZE PROTEST
The SBA Area Director for Government Contracting (or designee) will notify the following that protest received:
CO
Protested concern
Protestor
If HUBZone, then AA/HUB will be notified
If SDB, the AA/8(a) BD will be notified
SBA has 10 working days (if possible) to make a formal size determination
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The Size determination will be based on the evidence presented in the protest, but the SBA may use outside information
SBA will give greater weight to support factual information than unsupported allegations
SIZE PROTEST (cont'd)
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Bid Protests – Small Business
Response
The concern whose size is at issue must complete SBA Form 355 within 3 working days from the date of receipt from SBA
If the concern fails to respond, SBA may presume that the concern is other than a small business
A concern whose size status is at issue must furnish information about its alleged affiliates to SBA, despite any third party claims of privacy or confidentiality, because SBA will not disclose information obtained in the course of a size determination except as permitted by Federal law
The concern whose size is under consideration has the burden of establishing its small business size
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Bid Protests – Small Business
Time limits
Non-negotiated procurements: 5 days after bid or proposal opening
Negotiated procurements: 5 days after the CO has notified the protestor of the identity of the prospective awardee
Electronic notification of award: 5 days after the electronic posting
Multiple award schedule: any time prior to the expiration of the contract period (including renewals)
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Bid Protests – Small Business
Affiliation
Concerns and entities are "affiliates" of each other when one controls or has the power to control the other. 13 CFR § 121.103(a)(1).
SBA considers factors such as ownership, management, previous relationships with or ties to another concern, and contractual relationships. 13 CFR § 121.103(a)(2).
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Affiliation
Determined under 13 CFR 121 and 134
Factors weighed:
Identity of Interest
Common Management
Totality of Circumstances: SBA will consider the totality of the circumstances, and may find affiliation even though no single factor is sufficient to constitute affiliation. 13 CFR 121.103(a)(5).
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Ostensible Subcontractor Rule 13 CFR 121.103
A contractor and its ostensible subcontractor are treated as joint venturers, and therefore affiliates, for size determination purposes
An ostensible subcontractor is a subcontractor that performs primary and vital requirements of a contract, or of an order under a multiple award contract, or a subcontractor upon which the prime contractor is unusually reliant
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Ostensible Subcontractor Rule 13 CFR 121.103
All aspects of the relationship are considered
"Team" experience
Intent: prevent other than small firms from circumventing the size regulations.
Appeals are intensively fact specific
Relate to specific requirements of each solicitation
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Area Office Determination/OHA
If an Area Office determines affiliation/ostensible subcontractor rule was violated, person losing that decision "appellant" may appeal the ruling to OHA.
Appeals are intensively fact specific because they are based upon the specific requirements of each solicitation. "All aspects of the relationship" must be evaluated. 13 CFR 121.103; Size Appeal of C&C Int'l Computers, SBA No. SIZ-5082, at 12-13 (2009).
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Affiliation: OHA Appeal
Appellant has the burden of proving by a preponderance of the evidence (more likely than not) all elements of the appeal.
Appellant must prove the Size Determination is based on a clear error of fact or law. 13 CFR 134.314.
This is not de novo review, but based on the record established.
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Examples of Issues from Cases
Don't list the separate small and large businesses if you are a joint venture
Make sure that you are on the approved mentor or protégé lists
Follow up on mentor protégé expiration
Only SBA can approve mentor protégé agreements
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Bid Protests – Small Business
NAICS CODE DESIGNATIONPROTESTS
Challenging a CO's NAICS code designation
Appeal directly to OHA. (OHA appeal procedures are set forth in 13 CFR Part 134 .) SBA's Office of Hearings and Appeals ("OHA")
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Bid Protests – Small Business
NAICS CODE DESIGNATION PROTESTSNo required format, but an appeal must include:
Solicitation or contract number;
CO contact information;
Full and specific statement as to why the NAICS code designation is erroneous and argument in support thereof; and
Appellant's or its attorney's contact information
13 CFR § 121.1103
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Bid Protests – Alternatives
PROTESTS CAN BE PURSUED WITH –
Contracting Officer
Procuring Agency
Government Accountability Office (GAO)
Court of Federal Claims (COFC)
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InterestedParties
InterestedParties
AgencyAgency
GAOGAO
Court ofFederalClaims
Court ofFederalClaims
Court of Appealsfor Fed Circuit
Court of Appealsfor Fed Circuit
Bid Protests – Alternative Forums
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Bid Protests – Alternatives
PROCURING AGENCY (FAR 33.103)
Interested party may request an independent review by procurement professionals at levels above the CO
Some agencies take more seriously than others
Can be most effective on pre-award issues (overly restrictive; exclusions; PIA)
Unusual to gain satisfaction in post-award protests
Quick resolution; decision encouraged in 35 days
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Bid Protests – Alternatives
PROCURING AGENCY FILINGDEADLINES
Same as GAO – discussed later
Check individual agency rules
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Bid Protests – AlternativesGAO
Provides true outside expertise (80+ years)
Automatic stay
Substantial opportunities to develop facts regarding evaluations and other proposals
Full report
Document requests
Hearings (at GAO's discretion)
Opportunities maximized through protective order; requires legal counsel not involved in competitive process
Recovery of protest costs
Agencies almost always follow recommendation
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Bid Protests – Alternatives
GAO –Protest Deadline
Protests alleging a solicitation defect must be filed before bid opening or the time set for receipt of initial proposals if the improprieties were apparent prior to that time. 4 C.F.R. § 21.2(a)(1).
Other protests, including post-award protests, must be filed not later than 10 days after the basis of the protest is known or should have been known or within 10 days of debriefing. 4 C.F.R. § 21.2(a)(2).
If protester timely filed agency-level protest, within 10 days of actual or constructive knowledge of adverse agency action. 4 C.F.R. § 21.2(a)(3).
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Bid Protests – Alternatives
CICA Stay, 31 U.S.C. 3553(c) and (d)
Stay is crucial in order to obtain meaningful relief
By law, an Agency may not award a contract after notice of pending protest
GAO must notify agency within the required time limits
CICA Override
Head of Procuring agency must make finding
GAO must be notified
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CICA Stay - FAR 33.104(c)(1)
Contract Award
Notice to Agency by the GAO
10 days
or
5 days
Offered Debrief Date
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Basis known or should have known or debrief date
Protest Filed at GAO, § 21.2(a)(2)
Protester Comments § 21.3(i);
Supplemental Grounds?
GAO Decision § 21.9
Agency Document List § 21.3(c)
Agency Report § 21.3(c)
Agency Response to Supplemental § 21.3(c)
10 days0 25 30 40 50 100
GAO Notice
10 days
5 daysDebriefDateOffered to Protestor
Contract Award, or
Timeline: GAO Post-Award Protest and Agency CICA StayGAO
AGENCY - CICA
Potential for Hearing
70
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GAO: Merit Decisions and Protests Sustained
306
251
335
291315
441
825760
917271
0
100
200
300
400
500
FY05 FY06 FY07 FY08 FY09 FY10
Merit DecisionsSustains
23%18%21%
27%29%
19%
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Bid Protests – Alternatives
COURT OF FEDERAL CLAIMS
Court process – opportunity for discovery
GAO deadlines do not apply
No automatic stay; agency may stop voluntarily and may also be enjoined
Process more expensive and can be more complicated than GAO
Decisions are appealable to Federal Circuit
Can challenge agency override of stay
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Bid Protests – Alternatives
THE OPTIMAL FORUM – WILL VARYDEPENDING ON STAGE IN PROCESS,TYPE OF ISSUE INVOLVED, GOALS ANDRESOURCES TO BE COMMITTED
Early in process
Contracting officer or agency
Need access to evaluations/other proposals
GAO or Court to use protective order
Goal is to ensure status quo during protest
GAO or Court to achieve effective stay
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A GAO protest must be filed by an "interested party," which means an actual or prospective bidder or offeror with a direct economic interest in the procurement. 4 C.F.R. § 21.0(a).
Generally means an offeror that would potentially be in line for award if the protest were sustained.
For agency protests, essentially the same standard as GAO
At COFC, two-part test applies to determine an "interested party"
Bid Protests – Standing
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Bid Protests – Standing
Interested parties do not include subcontractors except where the awarding agency has requested in writing that subcontract protests be decided pursuant to 4 C.F.R. § 21.13.
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Bid Protests – Typical Issues
Source selection decisions
Past performance evaluations
Discussions
Conflicts of interest
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Bid Protests – Typical Issues
Source Selection
Source selection decisions must be rational and consistent with the solicitation's evaluation criteria
Reasonableness/rationality:
GAO will not "reevaluate" the proposals
Protester's "mere disagreement" with the evaluation is not sufficient to render it unreasonable
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Bid Protests – Typical Issues
Past Performance issues include—
Similarity of past performance
Agency required to follow solicitation requirements
Agency must consider past performance information "too close at hand" to ignore
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Bid Protests – Typical Issues
Discussions
When an agency engages in discussions, it must afford offerors in the competitive range an opportunity to engage in meaningful discussions. FAR 15.306(d)(1)
At minimum, COs must discuss with each offeror considered for award "deficiencies, significant weaknesses, and adverse past performance information to which the offeror has not yet had an opportunity to respond." FAR 15.306(d)(3)
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Bid Protests – Typical Issues
Conflicts of Interest issues include—
Agency must reasonably consider potential conflicts of interest created by awardee's involvement in certain activities
Conflict of interest mitigation plans
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Bid Protests – Intervening
Why the awardee may want tointervene
To protect its interests
To obtain access to information subject to a protective order
Generally, only outside counsel can obtain access to information subject to a protective order
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Bid Protests – Recap
Protests are sometimes required to protect your interests
Protests move very quickly
Imperative to know the rules to meet deadlines
Counsel should be involved as early as possible
Spot and evaluate potential protestable issues
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Questions or comments, please write, call or email:Christine Williams Perkins Coie LLP 1029 West Third Ave., Suite 300 Anchorage, AK 99501 (907) 263-6931 [email protected]
Rick Oehler Perkins Coie LLP 1201 Third Ave., 40th Fl. Seattle, WA 98101-3099 (206) 359-8419 (202) 654-6367 [email protected]
Don Carney Perkins Coie LLP 700 13th Street, NW, Suite 600 Washington, DC 20005-3960 (202) 654-6336 [email protected]
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