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Posted on Tuesday, February 12, 2019

Waiting To Protest Can Be Fatal

Because a protest can adversely impact a government contractor’s relationship with its customer, to say nothing of being costly, unsuccessful offerors might be tempted to file a protest only after they have good facts to base a protest on. Recently, however, an incumbent contractor waited too long, according to the Government Accountability Office (GAO). 

The incumbent, CDO Technologies, lost the best-value task order solicitation even though the price of the apparent winner, Atlantic CommTech Corp. (ACT), was 38% lower. As the incumbent, CDO had a good idea of what a realistic price should be. At the debriefing, CDO brought up the 38% price difference and asked “Does the government not see that these salary numbers” of the winner “puts your program at risk? This clearly shows the current staff will take a significant decrease in pay and benefits most likely leading to staff quickly departing the program.” 

One month later, it became clearer that CDO might be right. CDO learned that ACT was apparently offering jobs to CDO’s incumbent employees at a nearly 25% reduction in compensation. It filed a protest at GAO arguing that the Air Force did not do a proper price realism analysis.

The Air Force asked GAO to ignore the realism argument and dismiss the protest right from the start because CDO had filed the protest more than 10 days after CDO knew or should have known the basis of its protest because of the debriefing.

CDO countered that it previously had insufficient information on why there was such a big price difference, making any earlier protest “impermissibly speculative.” Once it learned that ACT was, in fact, apparently offering to pay incumbent personnel lower compensation, CDO believed it had enough information to file a valid protest and did so.

GAO, however, found CDO’s protest untimely. Although CDO’s protest evidence got stronger over the month following the debriefing, “CDO nevertheless knew or reasonably should have known of its bases for protest at the conclusion of the debriefing. We have recognized that a firm may not delay filing a protest until it is certain that it is in a position to detail all of the possible separate grounds of protest.”

Thus, a protester does not need a smoking gun. What a protester does need is “either evidence or allegations sufficient, if uncontradicted, to establish the likelihood” that the protester would win. CDO’s belief that the ACT won by seriously underbidding labor was an allegation, if uncontradicted by the agency or ACT, that was likely to win the protest. CDO had all it needed after the debriefing to file a protest and should not have waited a month to do so.

The decision highlights the various conflicting pressures on an unsuccessful offeror faced with deciding whether and when to file a protest.  The Government Contracts team at Berenzweig Leonard can give unsuccessful offerors good advice on the timing for filing a protest as well as on the pros and cons of doing so.

Berenzweig Leonard is teaming up with Red Team Consulting for a monthly newsletter featuring upcoming contracts, key protest decisions, events, and more. This post was published in the February 2019 Monthly Insights newsletter. To sign up for Monthly Insights, please click here.

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