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Unjustified Delay in Filing Pre-Award Protest Amounts to a Waiver of Protest Grounds

by | Feb 18, 2020 | Government Contracts

A protestor recently learned the hard way that filing a timely agency-level pre-award protest does not preserve those protest claims indefinitely. 

The U.S. Customs and Border Patrol (CBP) published a solicitation for application development and operations and management support services. After receiving initial offers, the CBP issued two key amendments to the solicitation – Amendments 9 and 10 – and permitted offerors to make limited revisions to their offers by November 13, 2018.

Harmonia Holdings Group (Harmonia) filed a timely pre-award protest with the agency before the deadline for submission of revised offers. Harmonia argued that Amendments 9 and 10 made changes to the solicitation that had “a material impact on [Harmonia’s] overall technical, management, transition, and staffing solution,” and therefore the agency should have allowed offerors to submit fully-revised proposals. Harmonia timely submitted its more limited revised proposal before the agency deadline.

The agency denied the pre-award protest on all grounds on December 6, 2018. Harmonia did not pursue its pre-award protest grounds at either the U.S. Government Accountability Office (GAO) or the U.S. Court of Federal Claims (COFC) at this time, instead apparently deciding to roll the dice to see if it would receive the contract award. On April 23, 2019 – more than four months after the agency denied Harmonia’s pre-award protest – CBP notified Harmonia of its decision to award the task order to another offeror. 

Harmonia filed a bid protest with the U.S. Court of Federal Claims on May 7, 2019. In that protest, Harmonia re-raised its arguments from its agency-level pre-award protest, and also challenged CBP’s evaluation and award decision. 

The Government argued that Harmonia waived its right to challenge Amendments 9 and 10 to the solicitation, by failing to diligently pursue its pre-award bid protest at either GAO or COFC after its agency-level protest was denied. Harmonia argued that because it had timely filed its agency-level protest, it had adequately preserved its ability to raise these challenges to the solicitation terms after award. 

In Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1313 (Fed. Cir. 2007), the Federal Circuit held that a party who fails to object to the terms of a government solicitation prior to the close of the bidding process waives its ability to raise those objections after award. In Bannum, Inc. v. United States, 779 F.3d 1376 (Fed. Cir. 2015), the Federal Circuit stated that “filing a formal, agency-level protest before the award would likely preserve a protestor’s post-award challenge to a solicitation, as might a pre-award protest filed with the GAO.” 

The Court determined that Harmonia had timely filed its agency-level, pre-award protest. However, the Court found that, by waiting five months from the agency’s denial to re-raise these pre-award arguments, Harmonia had waived its pre-award protest grounds. 

In reaching this conclusion, the Court noted that the purpose of the waiver rule is to prevent offerors from taking a gamble to see if they will win the contract anyway, and then engaging in costly after-the-fact litigation when their gamble doesn’t pay off. Offerors must diligently pursue their protest grounds without waiver at each step. The Court found that there was nothing in the record or Harmonia’s legal filings to explain why it waited five months to raise the pre-award protest grounds with the Court. 

The Court also stated that allowing Harmonia to bring its pre-award protest grounds months after the agency decision would functionally give Harmonia a second bite at the apple and, if Harmonia was successful in its pre-award protest, would result in procurement delay and a waste of agency resources. The Court concluded that it “cannot allow a protestor to shield itself from waiver under the guise of Blue & Gold by waiting months after receiving an adverse agency-level protest decision before reviving its pre-award claims in a post-award protest,” and that Harmonia “waived its right to bring those [pre-award] claims before this Court by failing to timely and diligently pursue its objections to Amendments 9 and 10.” 

Harmonia Holdings Group, LLC v. United States, No. 19-674 (Fed. Cl. Jan. 16, 2020).

Stephanie Wilson is a Partner and Co-Director of Government Contracts at Berenzweig Leonard. She can be reached at [email protected].