Background
Under federal law, a bid protest is a written objection by an “interested party” to the conduct of a federal agency in acquiring supplies or services for its own direct use or benefits. Congress authorizes bid protests in three separate forums, as discussed below.
Standing
To file a bid protest, the protestor must demonstrate standing as an interested party. A protestor challenging the terms of a solicitation must be an actual or prospective offeror “whose direct economic interest would be affected by the award of the contract or by failure to award the contract.” See 31 U.S.C. §3551(2)(A). A protestor challenging an agency’s decision generally must also demonstrate that it would be next in line for an award but for the agency error or that it would regain the opportunity to compete if its protest was sustained. [Note: Given their lack of “direct economic interests,” subcontracts on federal contracts generally lack standing to bring a GAO protest unless the contracting agency has requested that GAO hear such protests.]
Forum Selection
A contractor challenging a federal procurement may generally choose to file a bid protest before:
- the agency administering the procurement,
- the Government Accountability Office (GAO), or
- the United States Court of Federal Claims (COFC).
Agency Administering the Procurement
Pre-award protests must be filed with the federal procuring Agency prior to the Agency’s receipt of the initial proposals, which would typically be before the “deadline” for bidders to submit their proposals. Post-award protests must be filed within 10 days after discovery of the claim, meaning when the basis of the protest is known, or should have been known, by the contractor.
Pre-award Debriefing of Offerors: Offerors excluded from the competitive range or otherwise excluded from the competition before award may request a debriefing before award within 3 days after receipt of the notice of exclusion from the competition. Debriefings may be done orally, in writing, or by any other method acceptable to the contracting officer. FAR 15.505.
Post-Award Debriefing of Offerors: An offeror, upon its written request received by the agency within 3 days after the date on which that offeror has received notification of contract award, shall be debriefed and furnished the basis for the selection decision and contract award. Debriefings may be done orally, in writing or by any other method acceptable to the contracting officer. The debriefing should occur within 5 days after receipt of the written request. FAR 15.506.
The process for filing a protest with the procuring Agency varies among the agencies, but obtaining a decision on the claim is fairly quick and inexpensive compared to the other forums.
The basic framework for Agency protests is outlined in FAR 33.103, which simply requires that the Agency provide for a procedurally simple, informal and expeditious resolution to the protest. In fact, parties are encouraged to use their best efforts to resolve concerns raised by an interested party at the contracting officer level “through open and frank discussions” prior to the submission of an agency protest. FAR 33.103(b). If filed, the protest must be concise and logically presented to facilitate review by the Agency. Along with basic identifying information about the protester and the solicitation or contract number, protests must contain a detailed statement of the legal and factual grounds for the protest, copies of relevant documents, request for an Agency ruling and the type of relief requested, and information which establishes standing and timeliness to file the protest.
Upon receipt of a protest before award, a contract may not be awarded, pending agency resolution of the protest, unless contract award is justified, in writing, for urgent and compelling reasons or is determined, in writing, to be in the best interest of the Government. FAR 33.103(f)(1).
Upon receipt of a protest within 10 days after contract award (or within 5 days after a debriefing date offered to the protester under a timely debriefing request) the contracting officer shall immediately suspend performance, pending resolution of the protest within the agency, unless continued performance is justified, in writing, for urgent and compelling reasons or is determined, in writing, to be in the best interest of the Government. FAR 33.103(f)(3).
Agencies are required to make best efforts to resolve a protest within 35 days of filing, and the process is the most informal of all bid protest procedures. An important benefit to an Agency filing is that it triggers an automatic stay of the award or performance of the contract. However, please note that a stay can be overridden upon a written determination of compelling need by the Agency.
The downside to filing a protest directly with the Agency is that the complaint is generally heard by the same person (the Procuring Contract Officer or some other Agency head) who initially developed the flawed specification, instruction or made the award selection. Notwithstanding this apparent lack of independent review, be advised that a few agencies require a protester to file its protest first with the procuring Agency before the protest can be heard in another forum (e.g., U.S. Postal Service).
Government Accountability Office (“GAO”)
Filing a protest with the GAO appears to have many of the benefits of filing with the procuring Agency, but offers a review of the matter by an independent government official who is not associated with the procuring Agency. The GAO reviewer is likely to have more experience and insight into the specific issues of the protest than an Agency officer.
GAO review is not as quick or inexpensive as an Agency review. Also, there are formal procedures that must be followed for filing a protest with the GAO, as outlined in 4 C.F.R. part 21. Protests must be in writing and addressed as follows:
Attention: Procurement Law Control Group
General Counsel
Government Accountability Office
441 G Street, NW.
Washington, DC 20548.
A protest filed with GAO shall:
(1) Include the name, street address, electronic mail address, and telephone and facsimile numbers of the protester,
(2) Be signed by the protester or its representative,
(3) Identify the agency and the solicitation and/or contract number,
(4) Set forth a detailed statement of the legal and factual grounds of protest including copies of relevant documents,
(5) Set forth all information establishing that the protester is an interested party for the purpose of filing a protest,
(6) Set forth all information establishing the timeliness of the protest,
(7) Specifically request a ruling by the Comptroller General of the United States, and
(8) State the form of relief requested.
No formal briefs or motions are required. A complete copy of the protest must be provided to the procuring Agency within one day of filing the protest with the GAO.
Timing of Filing Protests
The timing requirements are similar to the Agency requirements. Pre-award protests relating to the solicitation or instructions must be filed before the date of proposal submissions for all bidders. All other protests must be filed within 10 calendar days after the basis of the protest is known, or should have been known (whichever is earlier), with the exception of protests under which a debriefing is requested and held. In such cases, the initial protest shall be filed not later than 5 days after the date on which the debriefing is held. Protests filed after these deadlines are untimely and the GAO generally dismisses them.
GAO Notice to Agency
Once a protest is filed with the GAO, the GAO is required by statute to notify the federal agency whose contracting activities are being protested within one working day of receiving the protest. See 31 U.S.C. §3553(b)(1). This GAO notice to the Agency: 1) marks the beginning of an automatic stay of the award or performance of the contract that lasts for the duration of the protest (agencies may, however, override these stays upon determining that “urgent and compelling circumstances” will not permit waiting for the GAO’s decision or where “performance of the contract is in the best interests of the U.S.”), and 2) marks the beginning of the 30-calendar day period within witch the agency must generally respond to the GAO protest. See 31 U.S.C. §3553(b)(2)(A).
Agency’s Response and Protester’s Reply
Within 30 days of being notified of a GAO bid protest, the Agency must file a report including a statement of relevant facts, memorandum of law, and relevant documents. The Agency can avoid filing this report only when it requests and is granted dismissal of the protest before the report is due. After the agency’s report is due, the protester has 10 calendar days to submit written comments on the agency’s report to the GAO. If protester fails to submit such documents, GAO is required to dismiss the protest.
GAO’s Decision
GAO allows protestors to avoid costs of traveling to DC, where GAO is located, by providing for the resolution of protests based upon documents filed by the protestor and the agency, as opposed to in-person hearings. Hearings are relatively rare in GAO protests.
GAO generally is required to issue its final decision within 100 calendar days of the protest’s filing. This timeframe can be shortened to 65 days if GAO determines, either upon request or its own initiative, that the protest be treated under the “express option.”
When deciding a protest, GAO does not substitute its judgment for the agency’s, or conduct de novo review; rather, it considers only whether the agency complied with procurement statutes or regulations, and had a reasonable bases and adequate documentation for its decision making. See, e.g., 31 U.S.C. §3552(a).
GAO may recommend to dismiss, deny, or sustain a protest. GAO recommendation is provided to the procuring agency, which has 60 days to adopt the GAO recommendations. The agency is not legally required to implement the recommendations in the GAO’s decision. However, agencies typically fully adopt GAO recommendations, as failure to do so results in a report to Congress by the GAO.
If the GAO determines that a solicitation or contract award does not comply with a statute or regulation, it may issue a recommendation that the Agency pay the protester its costs, including reasonable attorney fees, consultant fees and expert witness fees, as well as bid and proposal preparation costs.
A GAO protest can provide a second chance for relief to a protester. If a protester first files with the procuring Agency and was denied relief, the protester can then file a protest with the GAO within 10 days after the protester learns of any adverse ruling by the Agency. 4 C.F.R. section 21.2. In addition, protestors disappointed with GAO’s decision can seek reconsideration from GAO or file a bid protest with the United States Court of Federal Claims.
For detailed information on GAO Bid Protests, see GAO Bid Protests: An Overview of Time Frames and Procedures, Congressional Research Service (Jan. 19, 2016). See also https://www.acquisition.gov/far/html/Subpart%2033_1.html.
United States Court of Federal Claims (“COFC”)
A protester also has the option to file its bid protest in the United States Court of Federal Claims (“COFC”). Procedures for protests at the COFC are governed by the Rules of the United States Court of Federal Claims, which can be found at: http://www.uscfc.uscourts.gov/rules-and-forms. The specific procedures governing bid protests may be found at Appendix C, Procedure in Procurement Protest Cases Pursuant to 28 U.S.C. 1491(b). Additionally, the Federal Rules of Evidence apply to COFC proceedings.
The COFC is located in the District of Columbia, although the COFC has national jurisdiction and may hold court at other places as it may prescribe by rule of Court. See 28 U.S.C.A. §173. For those unable to travel to Washington, DC, parties may file a motion to participate in proceedings by telephone or videoconferencing. The COFC is comprised of sixteen active judges, nominated by the President, and several senior judges. In COFC cases, the Department of Justice (DOJ) represents the Government. Individuals may represent themselves pro se, but COFC requires that any corporation or partnership be represented by counsel admitted to the COFC’s bar to practice before the court.
In accordance with the Rules of United States Court of Federal Claims governing bid protests, plaintiff’s counsel must provide at least 24-hour advance notice of filing a bid protest to: (1) the Department of Justice, Commercial Litigation Branch, Civil Division; (2) the Clerk, United States Court of Federal Claims; (3) the procuring agency’s contracting office; and (4) the successful bidder/offeror. See Rules of the United States Court of Federal Claims, Appendix C, Procedure in Procurement Protest Cases Pursuant to 28 U.S.C. 1491(b), at II.2(a). This pre-filing notification requirement must include, but not be limited to, the following: the name of the procuring agency and number of the solicitation; the name and number of the contracting officer, the principal agency attorney, if any, who represented the agency in any prior protest of the same procurement; whether the plaintiff intends to seek injunctive relief; and whether the action was preceded by a protest before the GAO.
One of the biggest advantages to filing with the COFC is that it has full powers of authority to bind the procuring Agency to decisions. Another advantage is that a protester can use the COFC as a “last resort” after receiving negative rulings from an Agency and/or GAO protest. The converse is not true, as a protester who first files with the Court of Federal Claims and receives an adverse ruling cannot then file with the procuring Agency or GAO.
COFC judicial review of agency actions in bid protest cases is limited to the administrative record. The COFC reviews agency decisions under the Administrative Procedure Act (“APA”) standard. See Choice of Forum for Federal Government Contract Bid Protests, 18 Fed. Circuit B.J. 243 (2009), at 21-22. The court determines whether the agency action was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law based solely upon the administrative record. 28 U.S.C. § 1491(b)(1), (4); 5 U.S.C. § 702, 706(2)(A); see also Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332 (Fed.Cir.2001); CW Gov’t Travel, Inc. v. United States, 110 Fed. Cl. 462, 479 (2013).
Timeliness standards for filing protests at the COFC are more relaxed as well. Unlike the Agency and GAO strict time requirements, post-award protests can be filed with the Court of Federal Claims any time after the award provided that any delay in bringing the protest is not unreasonable, inexcusable or otherwise prejudices the Government or other parties. Software Testing Solutions, Inc. v. United States, 58 Fed. Cl. 533, 535 (2003). In addition, in accordance with 28 U.S.C. §1491(b)(1), the COFC “shall have jurisdiction to entertain such an action without regard to whether suit is instituted before or after the contract is awarded.” That said, the doctrine of laches may be invoked as an affirmative defense in the context of a bid protest before the COFC. See Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1314–14 (Fed.Cir.2007); see also Software Testing Solutions, Inc. v. U.S., 58 Fed.Cl. 533, 536 (2003). See Nat’l Telecommuting Inst., Inc. v. United States, 123 Fed. Cl. 595, 602 (2015). COFC cases have held that a “plaintiff cannot sit on his rights in bringing a bid protest while the Government moves forward with a contract.” See, e.g., Benchmade Knife Co. v. United States, 79 Fed.Cl. 731, 737 (2007) (citing Blue & Gold Fleet, 492 F.3d at 1314). In a recent COFC case, the Court, in determining that plaintiff’s six-month delay in bringing its bid protest was untimely, stated:
“[T]his Court has found a “strong argument in favor of applying laches” when a plaintiff chose to wait two months to file suit because he was weighing the cost of litigation. Software Testing Solutions, Inc. v. United States, 58 Fed.Cl. 533, 536 (2003). In this case, NTI waited more than three times as long to bring this bid protest.” Nat’l Telecommuting Inst., Inc. v. United States, 123 Fed. Cl. 595, 602 (2015).
While the post-award timeliness standard is clearly less restrictive than that of the GAO and Agency requirement, the pre-award time requirement is comparable to the other forums: before the close of bidding.
The downside to the COFC forum is that protests can be more costly and time consuming than Agency or GAO protests. However, in many cases, this forum offers the most due process protections to the protester because the Court adheres to the Federal Rules of Civil Procedure, can issue injunctive and equitable relief, and allows the parties to engage in discovery and file motions for summary judgment.
Another significant disadvantage to filing a protest in the Court of Federal Claims is the lack of an automatic stay of the award or performance on a contract award. Even though a protester files a protest, the Agency can continue moving forward with the procurement and contracting process absent an injunction by the Court to stop until the protest is resolved. For this reason, a protester should immediately request the Court to issue a stay on the Agency’s procurement process when the initial protest is filed.
Brief Overview of Some Comparisons Between the Different Forums
(See http://www.acc.com/legalresources/publications/topten/ttegcskabp.cfm)
Agency-level protests typically offer the least expensive and quickest resolution for a disappointed offeror, followed by GAO protests, and then COFC protests.
For agency-level protests, the Federal Acquisition Regulation (FAR) requires agencies to use best efforts to resolve a protest within 35 days after the protest is filed, although some agencies have implemented their own rules requiring shorter timeframes for resolution. The GAO has 100 days after the initial filing of a protest to issue its decision. By contrast, there are no time constraints on COFC’s authority to resolve bid protests.
Because none of these forums hold appellate jurisdiction over the others, a protestor who is unsatisfied with the result of a protest may re-file the protest in a different forum. For example, a protestor disappointed with the outcome of a GAO protest may be able to file a COFC protest. However, a protestor that files first at the COFC cannot later file a GAO protest based on the same issue. Thus, disappointed bidders may want to start with an agency-level or GAO protest before going to the COFC.
Although agency-level protests may be relatively quick and inexpensive, they also have significant disadvantages compared to GAO and COFC protests. For example, agency-level protestors have no right to discovery. By contrast, GAO and COFC protests require limited discovery, which means agencies must produce an agency report or administrative record containing all documents relevant to the protest. Further, in some cases, a COFC protest may allow for additional discovery (e.g., depositions).
Another important distinction between agencies, GAO, and the COFC, is the difference in remedies available to a disappointed bidder. While agencies and GAO have limited authority and only can issue recommendations, the COFC has the power to enforce its judgments. Although this distinction has the potential to significantly impact forum selection, as a practical matter agencies generally follow GAO’s recommendations.
One significant advantage offered by GAO protests is the availability of an automatic stay of contract award or performance under the Competition in Contracting Act (“CICA”) (commonly referred to as a CICA stay). To obtain a CICA stay, the protestor only needs to file its protest within 10 days of the contract award or within five days of its debriefing. In contrast, CICA stays are not available in COFC protests. COFC may stay contract award or performance through granting injunctive relief, although grants of injunctive relief require the protestor to satisfy a relatively high standard and post security.