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Compare and Contrast an Agency Protest to a General Accounting Office (Gao) Protest"

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Compare and Contrast an Agency Protest to a General Accounting Office (GAO) protest"

Abstract

Bid protests enhance the integrity and transparency of the federal procurement process by providing offers with an effective tool to challenge federal contract awards and thereby determine whether they conform to federal procurement law and regulation (1). Therefore, when a protest is brought, successful offers must be prepared to intervene in the protest to defend their contract award. A protester is typically a third party aggrieved by the actions of a government agency which result in a contract going to an awardee viewed by the protester as non-deserving. The law permits protests to be resolved through formal as well as informal procedures. The three protests are the procuring agency, the GAO, and the COFC, which all differ considerably as to their rules, procedures, scope of review, and available relief, and being well versed on each forum’s unique aspects can be essential to a successful outcome.

Created by the Budget and Accounting Act of 1921, the GAO became the first external forum for federal bid protests. The GAO was established as an independent governmental agency under the control and direction of the Comptroller General for the United States. Even though the statutes giving GAO jurisdiction to hear bid protests were not enacted until the mid-1980s, the GAO has been hearing bid protests since the 1920s. So what exactly is a bid protest, a bid protest is a formal, written objection to an agency’s solicitation for bids or offers, cancelation of a solicitation, or award or proposed award of a contract. Bid protests only became part of the federal procurement system in the early 20th century, more than 100 years after the federal government began purchasing goods and services. However, Congress has authorized bid protests in recognition of their role in providing redress to disappointed bidders and offers and in ensuring the integrity of the federal procurement process. By statute, three administrative and judicial forums have authority to hear bid protests against the federal government: the procuring agency, GAO, and the Court of Federal Claims. And although, there are different types of bid protests, the information below will discuss agency level and GAO protests. The agency-level protest as a formally recognized procedural option dates from the mid-1990s and derives from an experimental program of the Army Materiel Command (AMC) first implemented in 1991. Government-wide regulatory guidance is now provided at Federal Acquisition Regulation (FAR) 33.103. Most agencies supplement the FAR provision, to a greater or lesser degree, through their own regulations, and the regulations of the agency at issue should be reviewed before commencing an agency-level bid protest before that agency. Who May Protest? A protest may be brought by an “interested party,” defined to mean an actual or prospective offerer whose direct economic interest would be affected by the award of a contract or by the failure to award a contract.
This is the same standard applied by the GAO. What May Be Protested? Matters of Jurisdiction
As a general matter; there are no jurisdictional limitations on an agency protest because an agency is deemed to have inherent authority to consider a protest dealing with all aspects of its own procurements. By statute the Federal Acquisition Streamlining Act, however, an agency may not consider a protest of the issuance of task and delivery orders under already existing multiple-award task and delivery order contracts, where the agency has the ability to choose among several contractors when it seeks to place a specific order for goods or services. Instead, the aggrieved party must bring its complaint to the agency’s task and delivery order ombudsman pursuant to FAR 16.505(b)(4). An exception to this “no protest rule” is allowed with respect to orders that increase the scope, period, or maximum value of the contract under which the order is placed. Agency-Level Timeliness Rules - Protests of apparent solicitation improprieties must be filed before bid opening or the closing date for receipt of proposals. In all other cases, the protest must be filed no later than 10 days after the basis for the protest is known or should have been known. Failure to satisfy these timeliness rules inevitably results in dismissal of the protest, although the FAR does allow the agency, for good cause shown, to consider the merits of an untimely protest, but that authority is seldom used. Providing a written submission of the protest grounds to the CO commences the Agency Protest Process - A protest depending upon the agency, the protest will be considered by the CO or by an independent decision authority at a level higher than the CO. If the protest is decided by the CO, the agency is to provide for appellate review of the CO’s decision by an independent decision authority. 
 The FAR imposes no requirement for a written agency report in an agency-level protest, although some agencies pursuant to their own rules do; nor under the FAR does the protestor have an opportunity to reply to whatever response the agency may make to the protest, although again some agencies allow that opportunity. 

There is no entitlement to seek documents relevant to the procurement. The FAR merely advises that the parties “may” exchange relevant information. Hence, there is no use of protective orders to control the treatment of protected information because protected information is not disclosed by the agency. There is no formal procedure available to allow the successful awardee or other offers to “intervene” in the agency protest to present their views, although the agency could invite comments from them if it so desired. Best efforts are to be made to render a decision within 35 days. The decision is provided only to the protester; it is not published. Agency-Level Protest Statistics: 
Very few agencies make available their agency-level bid protest statistics; therefore, government-wide data is lacking from which to track trends and draw conclusions as to agency handling of protests. One noteworthy exception is the AMC, which was the prototype for the current agency-level protest process. According to the AMC, its protest filings during the FY 1999 through FY 2004 period averaged 28 per year, a decline of nearly 60 percent in activity from the earlier years of the AMC program. By comparison, AMC procurements precipitated an average of 68 protests per year directly to the GAO between FY 1999 and FY 2004. The AMC took corrective action in 15 percent of the protests that came before it, although the nature of that corrective action is not necessarily equivalent to the results that would accrue in a sustained GAO protest. The AMC further reports that of the 633 protests it resolved between FY 1991 and FY 2004, 57 or 9% were refilled at the GAO, and of those 57 protests, only four were sustained by the GAO. Because the AMC bid protest forum is staffed by independent legal professionals separate and apart from the CO and the agency’s acquisition personnel, it is not unreasonable to expect that a protester’s chances of success are even less at agencies other than the AMC (1).

The GAO bid protests has been involved with the resolution of disputes concerning the award of federal contracts since the early 1930s, its authority being derived, according to the GAO, from the GAO’s role in reviewing questions of whether federally appropriated funds were properly spent. For many years, the GAO was the sole forum available to aggrieved offers, although the precise source of its authority was clouded. However, any ambiguities were dispelled by the 1984 enactment of the Competition in Contracting Act (CICA), which provides a clear and explicit statutory mandate for the GAO’s bid protest function. In furtherance thereof, the GAO has promulgated regulations governing the bid protest process, which are found at 4 C.F.R., Part 21(3). Protests at the GAO are decided by the Procurement Law Control Group, consisting of approximately 30 attorneys, within the Office of the General Counsel. The protester may, but is not required to, use legal counsel (either in-house or outside). However, unless outside counsel is utilized, access to protected information (which is necessary to develop the protest record fully) will be embargoed. The procuring agency will be represented by agency counsel who, not infrequently, will have played a role in the procurement process. Where there has been an award of the protested contract, the awardee is entitled to intervene, although that does not always occur. From the awardee’s standpoint, the better practice is for the awardee, represented by counsel, to intervene because the agency and the awardee do not always see eye-to-eye on how best to defend the award, with the consequence that the agency may fail to vigorously defend the award or be more inclined to undertake unilateral corrective action in response to the protest that rescinds the award. Who May Protest
- CICA extends the right to protest to an interested party, which it defines as an actual or prospective bidder or offered whose direct economic interest would be affected by the award of the contract or by the failure to award the contract. With respect to “prospective” bidders or offers, the GAO looks to whether a successful protest would allow the contractor to participate as a bidder or offerer going forward, irrespective of whether the protester did so in the first round. If that test is satisfied, the protester qualifies as an interested party. Interested-party status will not be accorded to suppliers or subcontractors, associations, or organizations that do not perform contracts, and persons acting as private attorneys general, because such entities do not have a “direct economic interest.” Further, with respect to direct economic interest, the protester must be in line for award or be able to compete for award if its position in the protest is sustained. The necessary showing required of the protester will depend on the type of competitive procedure being used and the point in the competition at which the protest is brought. A contractor that is ineligible for award does not have a direct economic interest in the award and, thus, is not an interested party unless its protest contests the matter of eligibility. Finally, where multiple contract awards are made in the same procurement, one awardee cannot protest a second award to another party. What May Be Protested — Matters of Jurisdiction. The jurisdictional question has two facets. The first relates to the status of the entity conducting the procurement that is generating the protest. By statute (CICA), the GAO may consider protests of procurements of property or services by a federal agency. Federal agency is defined to include an executive department or independent establishment in the executive branch, a wholly owned government corporation, and certain establishments in the legislative and judicial branches. The GAO’s bid protest jurisdiction is no longer based on the procurement at issue involving the expenditure of appropriated funds. Therefore, the GAO will entertain protests relating to “no cost” contracts and procurements undertaken by a federal agency that do not rely on appropriated funds for its operations such as Federal Prison Industries and the U.S. Mint. The GAO will not consider protests involving procurements of entities that are not federal agencies such as “true” non-appropriated fund instrumentalities (for example, the exchange services of the military departments). Additionally, the GAO will decline to hear protests relating to procurements by federal agencies that have been exempted from CICA by their own authorizing legislation such as the U.S. Postal Service, the Federal Aviation Administration, the FDIC, and, for certain contract actions, the Centers for Medicare & Medicaid Services. The second aspect of the jurisdictional question deals with the nature of the transaction being protested. Previously, we noted that an agency-level protest couldn’t be brought against the award of task or delivery orders issued under already-existing multiple-award task and delivery order contracts. This same restriction applied to the GAO’s protest jurisdiction until enactment of the National Defense Authorization Act for FY 2008. As a consequence of that enactment, effective May 27, 2008, the GAO is given exclusive jurisdiction over protests of task and delivery orders valued in excess of $10 million. GAO Timeliness Rules
The GAO’s timeliness rules are found at 4 C.F.R. 21.2 (1) (3). Their stringency is justified as being necessary to ensure that the impact of protests on the procurement process is minimized. Protests based on alleged improprieties in a solicitation, which improprieties are or should be apparent to the protester prior to bid opening or the time set for receipt of initial proposals, must be filed prior to bid opening or the time set for receipt of initial proposals. By way of example, if a qualified small business concern interested in submitting a proposal wished to protest the fact that the solicitation should have been set aside for small business but was not, the protest must be filed before the date set for receipt of initial proposals, because the fact that the procurement is not set aside is evident on the face of the solicitation. 
 Protests not based on defects apparent on the face of a solicitation must be filed within 10 days after the basis of protest is known or should have been known to the protester, whichever is earlier. However, with respect to protests involving best value procurements under which a debriefing is requested and, when requested, is required to be given, meaning the debriefing was requested in writing within three calendar days of learning of the contract award, the protest will be timely if filed within 10 days after the debriefing is given. 
 If an agency-level protest was previously filed, a subsequent protest to the GAO within 10 days of actual or constructive knowledge of initial adverse agency action will be timely, so long as the agency level protest was timely filed. Where the timely agency-level protest involved an alleged solicitation impropriety, a subsequent protest to the GAO will be timely if filed within this 10-day period, even if filed after bid opening or the closing time for receipt of proposals. If award has been made, and if the protest has been filed and notice thereof received from the GAO within 10 days of the date of award or within five days after any debriefing that is requested and, when requested, is required, whichever is later, the agency is to direct the awardee to cease performance so long as the protest is pending. However, the head of the procuring activity within the agency may authorize performance of the contract, notwithstanding the protest, upon a written finding that (i) performance of the contract is in the best interests of the United States, or (ii) urgent and compelling circumstances that significantly affect interests of the United States will not permit waiting for the GAO’s decision in the protest. The Protest Process - A protest is commenced by filing a protest with the GAO’s Procurement Law Control Group. Filing may be accomplished by hand delivery, mail, commercial carrier, fax, or e-mail. Beyond setting forth the basic components of a protest (details of the solicitation, statement of the legal and factual grounds of protest, information establishing the protester’s interested party status, information establishing the timeliness of the protest, and the form of relief requested), a protest filing typically requests the production of documents relevant to the procurement and the protest grounds, asks for entry of a protective order to govern the proceedings, and more often than not requests that a hearing be held. A copy of the protest must be served on the procuring agency within one day of filing at the GAO. GAO telephonic notice to the agency that the protest has been filed is to be accomplished within one day of the GAO’s receipt of the protest. Presuming a protective order has been requested; the protester must file a redacted copy of the protest with the GAO and the contracting agency within one day of the initial filing. The redacted copy is used by the agency to notify potential interveners of the protest. Thereafter in short order comes GAO acknowledgement of the protest, establishment of the deadline for filing the agency report, entry of a protective order, and subsequent processing of applications for entry to the protective order.
A notice of intervention may be filed by other interested offers, notably the successful awardee, if award has been made. Other unsuccessful offers also may protest the same procurement, in which event the protests are “consolidated.”
Agency motion to dismiss some or all of the protest grounds is occasionally filed within the first 10 to 20 days, particularly if untimeliness of the protest is self-evident. If such a motion is filed, the protester is given an opportunity to respond, and then the GAO rules on the motion sufficiently in advance of the due date of the agency report. Shortly before filing the agency report, the agency will provide a listing of the documents it intends to produce in response to the protester’s document requests. If documents are to be withheld, they will be so noted so that expedited proceedings may be held to resolve the production issue. Objections to agency withholding of requested documents must be filed within two days. It should be noted that under GAO rules, the agency could request documents of the protester, although this is atypical. The agency report and documents responsive to the protester’s document requests are filed with the GAO and served on the protester and any intervener 30 days after commencement of the protest. The agency report will consist of an affidavit/memorandum from the CO responding to the protest and a legal memorandum from agency counsel. The protester then has 10 calendar days to file comments on the agency report and to raise any supplemental protest grounds of which the protester is first made aware by the agency report and the documents that have been produced. If the protester fails to respond to the agency’s rebuttal of any protest issue, the GAO will consider that the protester has abandoned that issue. Further document requests also may be filed by the protester, but these are due within two days of becoming aware of the existence of the documents being sought. The GAO will grant modest extensions of the comment period. Note, however, that such an extension does not go to extend the 10-day period in which to raise new or supplemental protest grounds, which deadline will not be extended by the GAO. Thus, in the event the protester secures a three-day extension within which to file its comments, and if those comments are accompanied by a supplemental protest, the supplemental protest will be dismissed as untimely because it was filed more than 10 days after the protester became aware of the basis for its supplemental protest grounds. Meanwhile, should the intervener wish to file comments on the agency report, those comments also are due within 10 days. While denominated as comments on the agency report, in actuality the intervener’s comments are in opposition to the protest and typically in support of the agency. The agency then responds to the protester’s comments, generally within 10 days, and, where applicable, to the new or supplemental protest grounds by way of a supplemental agency report. No specific time limit for the supplemental agency report is pre-ordained, but the timeline is dependent on the detail and complexity of the supplemental protest, although obviously no more than 30 days will be allowed. Theoretically, should the intervener wish to file comments on the protester’s comments and/or on the supplemental protest, it could do so within the time allotted to the agency. Following completion of the comment period, the GAO may hold a hearing to take testimony on disputed factual issues. Hearings are held at the discretion of the GAO. They usually are limited to one day’s duration, and are held at the GAO’s hearing room. All parties are entitled to file comments on the hearing within five days after the transcript is produced, and the protestor must file comments or the protest will be dismissed. 
 The GAO must issue a decision on the protest within 100 days of the protest filing. Where a supplemental protest has been filed, the GAO may extend the deadline by rolling the initial protest into the supplemental protest. However, this is seldom done. It is far more common for the GAO to decide the entire protest (initial and supplemental) within 100 days of the initial protest filing. Available statistics indicate an average decision time of less than 90 days. GAO Protest Statistics - The number of cases closed each year closely tracks the number filed. Merits decisions (published opinions) are rendered in close to 25 percent of total dispositions. The balance is resolved by means of (i) summary dismissal, where, for example, the protest is untimely on its face or the protester is found not to be an interested party; (ii) dismissal for reasons of mootness where the agency takes unilateral corrective action; (iii) alternative dispute resolution (ADR), which occurs in approximately nine percent of cases; and (iv) voluntary withdrawal of the protest, where, for example, a settlement is reached between the protester and the procuring agency. Hearings are held, on average, in approximately 50 protests annually.

Bid protest flowchart

[pic] In conclusion, Effective lines of communication between the contingency contracting office and the supporting legal office are critical to successfully dealing with a bid protest or appeal. As part of deployment preparations, the CCO must identify and know how to work with supporting legal counsel. In addition, protests can sometimes be averted by frank and open communications with the vendors, who might recognize significant errors in solicitations and evaluations overlooked by the CCO because of the pace of the operation. The CCO should encourage vendors to attempt to resolve their concerns with the CCO, pursue an agency protest if the issue is not resolved by the CCO, and then file a protest with the Government Accountability Office (GAO) as a last resort. Although the vendor has complete freedom to protest in any forum, and the CCO is never an advocate of the vendor, the interests of the government can often be best protected when vendor concerns are resolved quickly and at the lowest level.

Reference

(1) Nacke, P. (n.d.). Guide to Federal Procurement Protests. [ONLINE] Available at: http://govcon.net/guide-to-federal-procurement-protests/. Accessed March 3, 2013.

(2) CCH (2012). Federal Acquisition Regulation. Chicago, IL: Wolters Kluwer.

(3) U.S. Government Printing Office (n.d.) Code of Federal Regulations. Retrieved at: http://www.gpo.gov/fdsys/browse/collectionCfr.action?collectionCode=CFR. Accessed March 3, 2013.

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