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Failure to Intervene in Bid Protest Could Lead to a Lost Contract Award

On Behalf of | Nov 19, 2017 | Government Contracts

A recent U.S. Court of Federal Claims decision highlights an important factor for contract awardees to consider when deciding whether or not to intervene in a bid protest – the possibility of losing the opportunity to challenge an award to another offeror after the agency takes corrective action.

In Sonoran Technology and Professional Services, LLC v. United States, Sonoran originally won the contract award, which was the subject of two different protests by Spectre Pursuit Group, LLC (SPG). Sonoran chose not to intervene in either protest. After the second protest, the agency took corrective action, and ultimately terminated Sonoran’s contract and awarded the contract to SPG. Sonoran protested the award to Spectre, and the Court of Federal Claims dismissed all of Sonoran’s bid protest claims as untimely.

One of the most common reasons for the Court of Federal Claims or the GAO to dismiss a protest is untimeliness. Protests to solicitation terms must be filed prior to the deadline for receipt of proposals. The Sonoran decision now instructs offerors that protests challenging an agency’s corrective action must be raised before an agency makes its final award.

In this case, the Air Force issued an RFP seeking a service-disabled veteran-owned small business for courseware development and training. The awardee was required to have a facility security clearance at the time of award, which SPG did not have at the time it submitted its proposal. The Air Force determined that SPG was therefore ineligible for award, and awarded the contract to Sonoran.

SPG protested, arguing that the decision was a negative responsibility determination, and so the Air Force was required to refer the matter to the SBA for a Certificate of Competency (COC). Sonoran did not intervene in this protest to protect its award.

The Air Force took corrective action and referred the matter to the SBA. The SBA determined that it could not make a responsibility determination, because the contract had already been awarded, and SPG then protested again to the Court of Federal Claims, challenging the SBA’s failure to make a responsibility determination. Sonoran did not intervene in this protest, either. As the Court stated, “Why Sonoran chose not to intervene in either of these protests is beyond the Court’s comprehension, as Sonoran should have known that its award was at risk of being rescinded and granted to SPG instead as a result of potential corrective action.”

In response to the second protest, the Air Force committed in writing to terminate Sonoran’s contract award, if SBA issued a COC to SPG. After SPG obtained the required facility security clearance, the SBA issued COC to SPG, and the Air Force terminated Sonoran’s contract and awarded the contract to SPG.

Sonoran filed its protest to the Air Force’s award to SPG nearly four months after the award was made. Sonoran’s protest challenged the Air Force’s corrective action. The Court of Federal Claims dismissed these protest grounds as untimely, stating that “if Sonoran had concerns with the Air Force’s proposed corrective action, the time to protest was before the SBA made its COC determination.” The Court of Federal Claims rejected Sonoran’s assertion that it didn’t have sufficient notice of the proposed corrective action, finding that “Sonoran surely would have learned that corrective action was on the horizon” if it had intervened in either of SPG’s two protests.

The Court further determined that, even without intervening, Sonoran “still had ample notice that the Air Force was taking corrective action” from publicly available sources, including the agency’s notice of intent to take corrective action and the Court’s order dismissing the first protest. Thus, the Court concluded that Sonoran waived its right to raise challenges to the corrective action by waiting until after the corrective action was completed.

Although GAO is not bound to follow the Court of Federal Claims’ precedent, it is likely that GAO would have reached the same conclusion that Sonoran’s protest was untimely. GAO’s regulations require that protests (other than challenges to the terms of the solicitation) must be filed “not later than 10 days after the basis of protest is known or should have been known (whichever is earlier).” Under this “knew or should have known” standard, GAO would likely also conclude that Sonoran could be charged with knowledge disclosed from the bid protests in which it chose not to intervene.

Sonoran Tech. & Prof Svcs., LLC v. United States, No.17-711C (Oct. 11, 2017).

Berenzweig Leonard
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Stephanie Wilson is a Partner at Berenzweig Leonard, LLP. She and Terry O’Connor lead the firm’s Government Contracts practice. Stephanie can be reached at [email protected]