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Posted on Thursday, May 24, 2018

Awardee’s Delayed Protest Challenging Agency’s Corrective Action Denied as Untimely

A contractor who waited nearly a year to protest an agency’s decision to follow the GAO’s recommendation to reevaluate proposals and make a new award decision had its protest denied as untimely by the U.S. Court of Federal Claims under the rarely-invoked doctrine of laches.

This long and tortured U.S. Army Medical Command (MedCom) procurement has spanned five years, faced several bid protests, and resulted in multiple rounds of corrective action and contract awards. In June 2016, the contract was awarded to Global Dynamics, and that award was protested by another offeror at GAO. GAO sustained that protest on November 2, 2016, and recommended corrective action.

On December 30, 2016, MedCom stated that it was going to take corrective action following the GAO’s recommendation. However, more than ten months passed without MedCom completing the corrective action, and on November 2, 2017, the agency decided to cancel the solicitation.

Global Dynamics filed a protest with the Court of Federal claims on December 14, 2017, which challenged, among other things, the agency’s decision to follow the GAO’s November 2016 recommendation to take corrective action.

The government argued that this claim was barred by the doctrine of laches, which “bars a claim when a plaintiff’s neglect or delay in bringing suit to remedy an alleged wrong, which taken together with lapse of time and other circumstances, causes prejudice to the adverse party.” Glob. Dynamics, LLC v. United States, No. 17-1875C, 2018 WL 1312051, at *7 (Fed. Cl. Mar. 14, 2018) (internal citation omitted).

Global Dynamics argued that a challenge to agency corrective action is treated like a pre-award protest, and that therefore, its protest was timely because it was made before the agency made a new award decision.

The Court of Federal Claims agreed with the protestor that a challenge to corrective action is treated like a pre-award protest, but nevertheless found that the doctrine of laches could still be applied to such a claim under appropriate circumstances. Whether a claim is barred by laches is determined on a case-by-case basis, based on the specific facts of the case. The doctrine of laches is applied if the defendant can establish “(1) unreasonable and unexcused delay by the claimant, and (2) prejudice to the other party.” Glob. Dynamics, LLC, 2018 WL 1312051, at *9 (internal citation omitted).

Here, the agency undertook corrective action on December 30, 2016. Global Dynamics did not file its protest to the corrective action until nearly a year later, on December 14, 2017. The Court determined that this delay was neither reasonable nor excused, as Global Dynamics had notice of the GAO’s decision and the agency’s intent to act on it since December 30, 2016, and could not explain the lapse in time in waiting to challenge that decision. Moreover, Global Dynamics stated that it “initially intended to accept GAO’s November 2016 decision, notwithstanding that Global disagreed with the decision,” and that it only decided to challenge the decision once MedCom sought to cancel the procurement. The Court found that this “opportunistic reversal on the issue [was] unreasonable.” Id., at *10.

The Court also determined that the agency was prejudiced by this delay. If Global Dynamics had promptly and successfully challenged the agency’s decision to follow GAO’s recommended corrective action, the agency would not have expended resources to implement that recommendation. Thus, the Court concluded that Global Dynamics’ challenge to the agency’s corrective action was barred by the doctrine of laches.
Although the particular circumstances of this procurement are unique, this decision highlights that a protestor should not take the “wait and see” approach if it believes the agency’s decision to follow GAO’s recommended corrective action is unreasonable. Failing to promptly raise such protest could result in the case being dismissed, even if the underlying arguments would otherwise be meritorious.
Glob. Dynamics, LLC v. United States, No. 17-1875C, 2018 WL 1312051 (Fed. Cl. Mar. 14, 2018).

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