Jay Blindauer
Bid protests are crucial to the proper functioning of the procurement system. For today’s overworked Contracting Officer (“CO”), the bid protest is the only real disincentive to perfunctory contract award decision-making.
The typical CO has a program office that wants its stuff, now. Maybe there is a political appointee who needs the contract to go to meet a new policy objective, and has no problem expressing his or her aggravation. And the CO has a Supervisory CO, Chief of the Contracting Office (“CoCO”), or Head of Contracting Activity (“HCA”) who needs the CO to finish the award so the CO can move on to the next procurement. Likely, the only person who may be saying slow down, expend more time, ensure that the conclusion adds up, is Agency Counsel. However, Agency Counsel is merely an advisor, does not write the CO’s performance evaluation, and, in any event, is a “no” factory, killjoy, four-eyed geek (at least that’s the stereotype). Indeed, it is only the possibility of a bid protest that provokes adequate diligence.
Not an Acceptably Independent Forum
It cannot be just any bid protest. The would-be protester needs to be able to bring a protest before an actual independent forum, such as the U.S. Government Accountability Office (“GAO”) or the U.S. Court of Federal Claims (“CoFC”). Generally, an Agency-level protest does not qualify as an adequately independent forum.
Think of it this way. The CO may have spent the last four months of his or her life in the travail of the source selection process. Much effort was expended, procedures were observed, egos were soothed, and cats were herded. And the CO is rightly proud, because every time Technical Evaluator Bob said, “I know the evaluation scheme says X, but I’d like to evaluate the offerors on Y,” the CO decisively yet diplomatically prevented that. And the CO’s protégé, the Contract Specialist, wrote a price analysis that is a modern art masterpiece (it was based on adequate price competition). The point is, the hard work resulted in a timely award, the program office is happy, the political appointees are content (happiness is not in the job description), and the Supervisory CO/CoCO and the HCA are making favorable remarks that portend good things for an end-of-year evaluation, and a possible pay step increase. Break out the champagne.
In this context, a would-be protester shows up and asks the CO, or some other procurement official who has a professional interest in contract performance going forward (or at least not being the Agency official who puts grit in the gears), to potentially disavow that last four months of Agency effort. This is not a bid protest forum. It’s a set-up for a punch line. And I am afraid that the joke is on all involved.
FAR 33.103 states that an Agency-level protest will “be addressed to the contracting officer or other official designated to receive protests[,]” and “[a]gency procedures and/or solicitations shall notify potential bidders and offerors whether [an] independent review is available as an alternative to consideration by the contracting officer of a protest[,] or is available as an appeal of a contracting officer decision on a protest.”[1] Further, “[w]hen practicable, officials designated to conduct the independent review should not have had previous personal involvement in the procurement.”[2] So, although FAR 33.103 suggests an independent review by an official not involved in the procurement, it does not require it.
Most FAR Supplements likewise punt on imposing such a requirement. For example, the Army Federal Acquisition Regulations Supplement (“AFARS”) defers to Army Materiel Command (“AMC”) or U.S. Army Corps of Engineers (“USACE”) policy, and for other contracting activities, only requires review by the CoCO.[3] Similarly, the Air Force Federal Acquisition Regulation Supplements (“AFFARS”) and Procedures, Guidance, and Information (“PGI”) makes the protest decider the CoCO, but states that “[w]hen an agency protest is denied, an offeror may request an independent review by the SCO [Senior Contracting Official].”[4] As another example, the NASA Federal Acquisition Regulation Supplement (“NFS”) “gives bidders or offerors the ability to protest directly to the contracting officer (CO)[,] or to request an independent review by the Assistant Administrator for Procurement (or designee).”[5] The trend is that the prevailing concept of an “independent review” is a decision by someone who is not sufficiently independent.[6]
If Agency Counsel is involved, that typically helps, unless it is the same Agency Counsel that advised on the contract award decision. Nonetheless, even Agency Counsel has to remember who is his or her client, and, again, is still merely an advisor.
The result of this system is wholly predictable. Generally, the Agency will look for a procedural way to eliminate the protest, and on the merits if it is too nuanced or a close call, the protest will be denied. Realistically, relief is only available if there is an obvious competitively prejudicial error. However, if there is an obvious competitively prejudicial error, why not file a GAO protest? The Agency will, in short order, likely undertake corrective action, and it is a corrective action that the Agency is more likely to execute well because it is corrective action in front of GAO.
In sum, when your litigation opponent is also the judge, do not be surprised by an adverse result. With exceptions, an Agency-level protest is a specious concept.
No Required Debriefing Time Extension
Another reason not to file an Agency-level protest is that, unlike for GAO, there is no tolling of the ten-day filing deadline because of a required debriefing. Specifically, GAO rules at 4 C.F.R. § 21.2(a)(2) state the following.
“[W]ith respect to any protest basis which is known or should have been known either before or as a result of the [required] debriefing, and which does not involve an alleged solicitation impropriety covered by paragraph (a)(1) of this section, the initial protest shall not be filed before the [required] debriefing date offered to the protester, but shall be filed not later than 10 days after the date on which the debriefing is held.”[7]
This rule is helpful in giving a would-be protester time to consider protesting, and in turn prepare and file a thoughtful protest. However, as stated, it is a GAO rule, not a FAR 33.103 rule. Instead, FAR 33.103 simply says that “protests shall be filed no later than 10 days after the basis of protest is known or should have been known, whichever is earlier.”[8] Hence, there is no required debriefing exception to the ten-day filing period for an Agency-level protest.[9] So, as soon as the would-be protester learns of a protest basis, even if a later-provided debriefing adds more detail, the debriefing does not start a new ten-day clock. And if a later-provided debriefing supplies even more bases of protest, the protester either has to hurriedly raise those bases within the ten-day period of the initially discovered protest grounds, or make multiple, initial protest filings. To make matters worse, FAR 33.103 does not contemplate a process where, following an Agency Report, the protester gets to file comments and/or a supplemental protest, or amend a complaint. Consequently, the protester has to make its best arguments in its initial (and probably only) filing, and do so with comparatively limited preparation time. Why would a protester handicap its own protest effort in this way? Surely, filing a GAO protest is better.
No CICA Stay
An Agency-level protest also does not provide the Competition in Contracting Act (“CICA”) statutory stay of contract performance. Particularly, the CICA statutory stay provisions at 31 U.S.C. § 3553(c) and (d) are premised upon a protest that is before the Comptroller General of the United States.[10] An Agency-level protest does not qualify. Instead, for an Agency-level protest, FAR 33.103 provides a similar stay of award or performance.[11] However, here’s the hitch. FAR 33.103(f)(4) makes clear that “[p]ursuing an agency protest does not extend the time for obtaining a stay at GAO. Agencies may include, as part of the agency protest process, a voluntary suspension period when agency protests are denied and the protester subsequently files at GAO.”[12] Hence, when a would-be protester files an Agency-level protest, the protester misses the time window for obtaining the CICA stay. It is not tolled by the Agency-level protest. And if the protester does not like the result of the Agency-level protest, and subsequently files a GAO protest, any continued stay of contract performance is purely a matter of how munificent the CO is feeling. And if a protester thinks that a CO is likely to voluntarily maintain a stay, see above about how the program office wants its stuff now.
Initial Adverse Agency Action
Filing an Agency-level protest compels a protester to be in a state of hyper-vigilance. This is because of a legal concept specific to an Agency-level protest called “initial adverse agency action.” The concept is that, during an Agency-level protest, the moment the Agency takes action or inaction prejudicial to the protester’s position, even though it is not a final decision, it starts the ten-day clock for the protester to file a follow-on protest with GAO.[13] Hence, FAR 33.103 states that “any subsequent protest to the GAO must be filed within 10 days of knowledge of initial adverse agency action[.]”[14] The problem is that there is no exhaustive list as to what constitutes initial adverse agency action, and for some officials words count as actions, and GAO’s timeliness rules state that the ten-day clock starts whether the Agency-level protester’s knowledge is “actual or constructive[.]”[15] The standard is not a model of clarity. Things GAO has determined to constitute initial adverse agency action include the Agency proceeding with a second round of revised proposals,[16] proceeding with bid opening,[17] not suspending the receipt-of-proposal deadline,[18] issuing a statement that the Agency intended to make an award,[19] awarding a contract,[20] an oral statement by the CO that the CO was “abiding by his decision[,]”[21] and a failure to halt contract performance.[22] Again, any Agency action or inaction that is prejudicial to the protester’s position can be construed as initial adverse agency action. So, if, while the Agency-level protest is pending, the Agency has communications with the presumptive awardee about the awardee’s personnel on-boarding, and upon being asked the CO states the s/he is just trying to be prepared for whatever decision the CoCO makes, does it constitute initial adverse agency action? My answer is I would not have filed an Agency-level protest in the first place because I do not wish to waste a client’s time and money over interpreting whether the CO’s lunch selection evidences initial adverse agency action.
One final point on initial adverse agency action, FAR 33.103 states that “[i]f there is an agency appellate review of the contracting officer’s decision on the protest, it will not extend GAO’s timeliness requirements. Therefore, any subsequent protest to the GAO must be filed within 10 days of knowledge of initial adverse agency action[.]”[23] Hence, if the Agency offers an administrative reconsideration or appeal of an adverse decision, it is for naught. The protester does not have the luxury of waiting for additional Agency process if the protester wishes to preserve the ability to protest with GAO.
Task and Delivery Orders
Another limitation to Agency-level protests is that some Agencies maintain that they do not have jurisdiction to hear an Agency-level protest of a task/delivery order unless it is at least of a certain value. For example, U.S. Army Materiel Command (“AMC”) states that “[t]his office applies the GAO’s $25 million jurisdictional threshold to protests of task and delivery orders issued under Department of Defense (DoD) procurements. Therefore, this office will summarily dismiss such protests without rendering a decision on the merits.”[24] The U.S. Marine Corps has also taken the position, at least in the past, that it lacked jurisdiction over a low-dollar value task/delivery order.[25] This is erroneous.[26] If a CO’s warrant gives the CO the authority to issue the task/delivery order, then it certainly gives the CO the authority to hear a protest and subsequently modify or terminate the task/delivery order. Nonetheless, since an Agency-level protest is a baseball game where the other team supplies the umpires, when the protester is in front of an Agency that takes the no-task-order-protest stance, there is no arguing the point.
Exceptions
Naturally, there are exceptions to every rule. The first, important exception is for a procurement involving non-appropriated funds. “Protests of procurements or proposed procurements by agencies such as the U.S. Postal Service, the Federal Deposit Insurance Corporation, and nonappropriated fund activities are beyond GAO’s bid protest jurisdiction as established in 31 U.S.C. [§§] 3551-3556.”[27] Hence, if an Agency is not subject to GAO’s bid protest jurisdiction, any bid protest should be filed with CoFC. However, before filing a CoFC protest, the protester may have to first exhaust administrative remedies by going through an Agency-level bid protest process. In which case, the protester will likely hold its nose through the Agency-level protest until administrative finality is achieved.
The second exception is that some Agencies do have a well-developed Agency-level bid protest process that is in front of an Official that is at least somewhat independent, the procedures are established and not extemporized, and the involved Agency personnel perform the process with sufficient regularity to create consistency. The primary examples are the FAA Office of Dispute Resolution for Acquisition (“ODRA”) and the AMC Command-level protest forum. A third possible example is an Agency that has an Agency Protest Official (“APO”), such as GSA or DoJ.[28] However, for any Agency that offers an Agency-level protest in front of an APO, part of the calculus whether to file may consider: (1) the level of independence of the APO; (2) how often the forum is used; (3) the clarity of forum procedures; (4) whether the APO’s decision is mandatory or hortatory; and (5) whether the APO requires accountability reporting on mandated or promised corrective action.
The third exception is for circumstances that arguably demand a higher level of discretion. Two examples come to mind. The first is if the facts of the protest are so bad for the Agency that it will garner a corrective action in any forum, and taking a more public approach could be counter-productive by making the Agency unduly defensive, that is a circumstance where an Agency-level protest may be optimal. The second example is for a procurement where the Agency does not even want to be identified, as made clear by a solicitation/contract provision. In which case, making a public protest filing with GAO or CoFC may not be the best way to assert one’s worthiness for obtaining the contract.
A fourth noteworthy exception comes from my colleague, Pete Dungan, Esq. An Agency-level protest is a productive forum for a solicitation term protest. And, in fact, since all that is required to posit an Agency-level protest is a “specific expression of dissatisfaction with the [A]gency’s actions and a request for relief[,]” there are many emails sent to COs requesting changes to solicitation terms that qualify as Agency-level protests.[29]
The aforementioned exceptions are not exhaustive.
Perceptions
The first reason often cited for filing an Agency-level protest is the would-be protester may be afraid of ticking off the Agency. First, it is generally understood that a GAO or CoFC protest is part of the procurement process, not an aberration to it. Hence, it is a beginner’s viewpoint to think that filing a GAO or CoFC protest is an exceptional act. Second, generally, it is what the protester says in the protest that potentially rankles, not where the protest is filed. Accordingly, anxiety over a vague notion of the Agency’s perception is not a sufficient reason to file an Agency-level protest.
The second reason often cited for filing an Agency-level protest is that the time and cost expenditure is ostensibly lower. This is because an Agency-level protest is supposed to be complete within 35 days, there generally is no opportunity for the protester to prepare and file comments and/or a supplemental protest, and some contractors believe that an Agency-level protest can be effectively pursued without an attorney. The reasoning only holds up if costs are considered with no regard to results. In reality, since an Agency-level protest is likely to be followed with a GAO protest (assuming that the protester actually wants to get something out of the protest process), an Agency-level protest just adds to a protester’s time and cost burden versus protesting to GAO straightaway. Further, although FAR 33.102(b) supposedly gives an Agency the ability to pay protester costs for an Agency-level protest, it is rarely, if ever, done. On the other hand, GAO regularly awards protester cost reimbursement,[30] and CoFC can do so for certain small businesses under the Equal Access to Justice Act of 1980 (“EAJA”).[31] Furthermore, for all of the reasons discussed in this note, not lawyering up before commencing an Agency-level protest is a risky proposition. So, even an Agency-level protest will typically involve attorney fees.
Final Thought
Mounting a bid protest requires an expenditure of time and money. To warrant the expenditure, there needs to be a reasonable possibility of altering the procurement result. With exceptions, an Agency-level protest does not offer a reasonable possibility. So, I reiterate, why would anyone file an Agency-level protest?
[1] FAR 33.103(d)(3)-(4).
[2] FAR 33.103(d)(4).
[3] See AFARS 5133.103 and App’x Gg, Delegation Line 33.
[4] AFFARS 5333.103; AFMC PGI 5333.103; AFICC PGI 5333.103.
[5] NFS 1833.103(d)(4).
[6] See also Navy Marine Corps Acquisition Regulation Supplement (“NMCARS”) 5233.103; Special Operations Federal Acquisition Regulation Supplement (“SOFARS”) 5633.103; Dep’t of Energy Acquisition Regulation (“DEAR”) 933.103; Homeland Security Acquisition Regulation (“HSAR”) 3303.1; Veterans Affairs Acquisition Regulations (“VAAR”) 833.103-70(a); HUD Acquisition Regulation (“HUDAR”) 2433.103(d)(2).
[8] FAR 33.103(e).
[9] See, e.g., M2 Global Tech., Ltd., B-400946, 2009 CPD ¶ 13, at 2 (Jan. 8, 2009) (“[W]here the protest is filed with our Office with respect to any protest basis which is known or should have been known either before or as a result of the requested and required debriefing, the protest cannot be filed before the debriefing date offered, but must be filed not later than 10 days after the date on which the debriefing is held. [ ] This exception to the 10–day rule, however, does not apply to a protest, such as M2’s, which is filed with the agency. As noted above, the rules for timely filing an agency-level protest are established other than alleged solicitation improprieties are required to be filed within 10 days after the by the FAR, and not GAO’s Bid Protest Regulations. Under the FAR, protests of basis of protest is known or should have been known, and the FAR does not contain a ‘required debriefing’ exception to this 10–day rule.” (internal citation omitted)); see also RTI Tech., LLC, B-401075, 2009 CPD ¶ 86, at 3 (Apr. 15, 2009).
[10] See 31 U.S.C. § 3553(a) “Under procedures prescribed under section 3555 of this title, the Comptroller General shall decide a protest submitted to the Comptroller General by an interested party.”).
[11] See FAR 33.103(f).
[12] FAR 33.103(f)(4).
[13] See Silver Investments, Inc., B-419028, 2020 CPD ¶ 332, at 5 (Oct. 26, 2020) (“Adverse agency action includes any action by the agency that prejudices the position taken in a protest filed with the agency.”).
[14] FAR 33.103(d)(4); 4 C.F.R. § 21.2(a)(3).
[15] Id.
[16] See Bobnreen Consultants, Inc., B-218214 et al., 85-1 CPD ¶ 636 (May 31, 1985).
[17] See Sunrise Assocs.—Recon., B-219356 et al., 85-1 CPD ¶ 738 (June 27, 1985).
[18] See FMB Laundry, Inc., B-261837 et al., 95-2 CPD ¶ 274, at 2 (Dec. 19, 1995).
[19] See Impact Resources, Inc., B-416093, 2018 CPD ¶ 207, at 5 (June 11, 2018).
[20] See Marmac, Indus., Inc., B-209567, 82-2 CPD ¶ 45 (Nov. 17, 1982).
[22] See Trane Air Conditioning, B-214259, 84-2 CPD ¶ 359, at 1 (Sept. 26, 1984).
[23] FAR 33.103(d)(4).
[24] https://www.amc.army.mil/Connect/Legal-Resources/.
[25] See, e.g., Logis-Tech., Inc., B-407687, 2013 CPD ¶ 41, at 4 (Jan. 24, 2013).
[26] The argument that the task order value jurisdiction limitation also applies to an Agency-level protest is that 41 U.S.C. § 4106(f) and 10 U.S.C. § 2304c(e) both use the word “protest[,]” not GAO protest or CoFC protest. However, it is a superficial argument. As Judge Solomson stated in Tolliver Grp., Inc. v. United States, “the Federal Acquisition Streamlining Act of 1994 expressly incorporated the CICA’s definition of ‘protest[,]’ ” and “[t]he term ‘protest’ in the jurisdictional bar must be read as coterminous with what that term means at the GAO. Viewed from the other end of the telescope, the word ‘protest’ cannot be read to mean one thing in the task order protest bar, but something else in the jurisdictional grant to the GAO, as both provisions are contained within 41 U.S.C. § 4106(f).” 152 Fed. Cl. 70, 98 (2020). As part of this, it is worth noting that CICA did not create the Agency-level protest system. Instead, the Agency-level protest system was created by Executive Order No. 12,979 (Agency Procurement Protests) (Oct. 25, 1995).
[27] BID PROTESTS AT GAO: A Descriptive Guide, 10th ed., GAO-18-510SP, at 41 (May 2018) (hyperlinks added).
[29] See Silver Investments, Inc., B-419028, 2020 CPD ¶ 332, at 4 (Oct. 26, 2020).
[30] See 31 U.S.C. § 3554(c).
[31] See 5 U.S.C. § 504; 28 U.S.C. § 2412.