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Posted on Wednesday, July 19, 2017

A Difficult Decision: Whether to Protest Corrective Action

When an agency tries to end your GAO protest by promising to take “correction action,” should you protest the corrective action if it fails to address every one of your protest arguments? Here’s the protester’s dilemma: protesting corrective action often turns out to be premature and a waste of money; but not immediately protesting it could waive your right to make those arguments in a later protest. A recent GAO decision gives some guidance on this critical issue.

2M Research Services, LLC competed for FEMA work, but lost and protested to GAO. 2M argued that, because FEMA improperly rated the winner’s proposal’s too high, FEMA should not have awarded the work to that firm. 2M even filed a supplemental protest. Eventually, FEMA decided to take corrective action to end the protests. 2M then protested FEMA’s proposed corrective action to GAO, arguing that FEMA’s corrective action plan did not specifically address all the issues 2M had raised before GAO.

GAO dismissed 2M’s corrective action protest in December 2016. According to GAO, FEMA’s corrective action included its commitment to making a new award decision so dismissal was proper. See 2M Research Services, LLC, B-413993.4, June 19, 2017.

Whether the agency has committed to making a new award decision based on the existing solicitation’s “ground rules” appears to be the key issue in deciding whether to protest the proposed corrective action. According to GAO, “Where an agency’s proposed corrective action does not alter the ground rules for the competition, we will generally consider a protester’s pre–award challenges to the corrective action to be premature.” Nuclear Prod. Partners, LLC, B–407948.9, Sept. 24, 2013.

Notice, however, that this GAO rule raises two issues: what are “the ground rules for the competition” and what risk does a protester have from GAO’s use of the word “generally”?

GAO equates the “ground rules” with aspects of a solicitation “that apply to all offerors,” and, therefore, challenging proposed corrective action is “analogous to a challenge to the terms of a solicitation, thus providing the basis for protest prior to award.” Examples are protests challenging an agency’s decision not to reopen discussions and protests challenging an agency’s decision not to hold discussions or permit clarifications. On the other hand, protests challenging the agency’s corrective action as improperly preventing the protestor from revising its price proposal, limiting the scope of agency discussions, or failing to include the reopening of discussions, are premature. See SOS Int’l, Ltd., B–407778.2, Jan. 9, 2013; Alliant Techsystems, Inc., B-405129.3, Jan 23, 2012; Northrop Grumman Technical Services, Inc., B-404636.11, June 15, 2011.

But GAO does not always abide by this rule, hence the focus on “generally.” A protester should not confidently rely on GAO’s “ground rules” test.

For example, a protest filed by enrGies, Inc. (EI) included its argument that the Source Selection Authority (SSA) was biased and requested specifically that GAO recommend the agency remove him; EI also argued that price was not properly evaluated. The agency’s corrective action promised a re-evaluation of price and a new source selection decision, but made no mention of replacing the SSA. In addition, when GAO dismissed the protest based on the agency’s proposed corrective action, GAO made no reference to EI’s bias allegation.

But when EI tried to raise the SSA bias allegation in protesting the agency’s subsequent award decision, GAO held that EI’s failure to protest the corrective action for not addressing the SSA bias issue meant the argument had been waived. According to GAO, “given the seriousness of EI’s allegation and the specificity of its requested relief, it was unreasonable for EI simply to assume that the agency might act on that aspect of its protest based on this general language in the corrective action notice.” enrGies, Inc., B-408609.9, May 21, 2014.

To GAO’s credit, it went on to discuss the issue anyway and held that, even if the argument had been timely, the protester had not proven that the SSA was in fact biased.

Also to GAO’s credit, it described a protester’s alternatives in a similar situation: file an objection to the adequacy of the agency’s proposed corrective action before GAO dismisses the protest or request GAO to reconsider its dismissal within 10 days.

Depending on the value of the solicitation and the merits of your original protest arguments, it might be a wise business decision to protest corrective action that does not appear to address your concerns, thereby preserving the protest argument for the future. GAO may dismiss the protest of the proposed corrective action as premature, but that is a better alternative than having a later protest dismissed for failing to challenge the corrective action at all.

Berenzweig Leonard is teaming up with Red Team Consulting for a monthly newsletter featuring upcoming contracts, key protest decisions, legal updates, events, and more. This post was published in the July 2017 Monthly Insights newsletter. To sign up for Monthly Insights, please click here.

Terry O’Connor is a Partner at Berenzweig Leonard, LLP. He and Stephanie Wilson lead the firm’s Government Contracts practice. Terry can be reached at TOconnor@BerenzweigLaw.com.