hot issues in federal bid protests - perkins coie · hot issues in federal bid protests ... tight...

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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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

50

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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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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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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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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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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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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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]

20866447.1

mailto:[email protected]



hot issues in federal bid protests - perkins coie · hot issues in federal bid protests ... tight...

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