Bid Protests: Can You File a Protest and Maintain a Good Relationship with Your Government Customer?
by Rocky Galloway
Bid protests provide a remedy under federal government contracting procedures for aggrieved contractors to challenge the award or prospective award of a contract for goods and services, or to challenge the terms of a solicitation. When deciding on whether to file a bid protest, contractors often have to consider two factors:
- Are there sufficient grounds to sustain the protest and receive the remedy sought, and
- What effect does filing the protest have on the present and future business relationship with the government customer.
The first consideration is more fact-based, and therefore the appropriate path is easier to discern. Even after establishing the facts, contractors must still evaluate the chance of success versus the cost of filing and pursuing a bid protest. The second consideration is much less tangible but could be equally if not more important depending on the business objectives and the relationship of the parties involved. Most government representatives understand that bid protests are part of the contracting process. That said, the very nature of filing a protest calls into question the competency and professionalism of the government’s representatives (e.g., Contracting Officer, Source Selection Officials). The end result is that these individuals often perceive the protest as a personal attack on the quality of their work and become overly vested in protec ting their reputations.
There are several ways to file a protest without directly challenging the judgment of your government customer who made an award to a competitor. In procurements set aside for small businesses, 8(a) contractors, HUBZone contractors, or Service-Disabled, Veteran Owned contractors, contractors can protest a prospective awardee’s eligibility or qualifying status without involving the Contracting Officer, except to the extent that the Contracting Officer is the designated recipient of the protest. In these cases, the Contracting Officer does not decide the protest and does not have to defend the award or the awardee. Upon receipt of a size/status protest, the Contracting Officer forwards the protest to the SBA Regional Office with jurisdiction over the awardee. At that point, the awardee has to defend itself before the designated SBA Regional Office without the assistance or involvement of the Contracting Officer or other government representatives.
Another way that contractors can challenge an unfavorable award decision without potentially ruining the business relationship with the government customer is by filing an agency-level protest. Each federal agency has its own internal procedures for handling agency level protests. Most are very informal and may involve only the Contracting Officer and the agency’s legal counsel. Some agencies have an objective, independent, and formal review procedure. Agency-level protests have the advantage of offering a face-saving way for a Contracting Officer to correct an obvious error without the broad exposure, document production requirements, and strict oversight that comes with a protest filed at the Government Accountability Office (GAO). It is important to note that filing an agency-level protest does not foreclose the possibility of filing a GAO protest. However, agency-level protests do not grant an automatic stay of performance of the awarded contract until the protest is resolved, which many consider to be a key advantage to filing protests with GAO.
Perhaps the least favorite protest venue of government customers is the GAO. Depending on the issue in dispute, GAO protests can require extensive levels of discovery, document production and legal responses, all of which are very time sensitive. Once a GAO protest is filed, notice is immediately given to the agency, which then has the option of granting the remedy requested by the protester or if it deems the allegations to be without merit, the agency will file a report with GAO. The agency report is a complete factual response to the allegations provided to all parties, including interested parties (e.g., other affected bidders) that become part of the protest as intervenors. Preparation of the agency report involves multiple organizations within the agency (including the Contracting Officer, Source Selection Officials, and Legal Counsel) and can be time consuming and costly for all parties involved. In addition to the agency report, there may be additional requests for information by either party, including the GAO.
The final venue for protesting an award decision is the U.S. Court of Federal Claims (CoFC). The CoFC will consider, de novo, a bid protest that has previously been denied at the agency-level or by GAO. One of the primary reasons contractors file protests at the CoFC is that there is no timeliness requirement for a post-award bid protest (GAO has a strict 10-day deadline for filing after grounds for the protest are known). At the CoFC, the government is represented solely by lawyers from the U.S. Department of Justice. This requires the government customer and its agency counsel to work with lawyers who are not familiar with the agency’s procedures or its procurement actions. Understandably, filing a protest with the CoFC is considered an escalation of the dispute with the government customer and requires a tremendous use of resources by all parties. Therefore, if a contractor is concerned about maintaining a relationship with its government customer, that will be difficult to do so if CoFC is the protest venue.
It must be emphasized that at each protest venue, the decision to file a protest should be carefully considered. If the merits of the case are strong and maintaining a good working relationship with the customer has value, the best approach is to present it in a forum that is least burdensome on all parties involved.