Practitioner’s Road Map to GAO Bid Protests

Written by James F. Nagle, Smith Currie Oles

With an increase in federal government procurements–thanks in part to the American Recovery and Reinvestment Act–and a struggling private construction market, many contractors have decided to take their first stab at bidding federal projects. This dual increase in federal contracts and first-time federal bidders will inevitably lead to an increase in federal bid protests. In the context of federal bid protests, choosing the proper forum for bringing the protest and following the correct procedures are absolutely essential if a contractor expects to stand any chance of succeeding on a protest.

Currently, an eligible bidder/proposer may choose to file a protest challenging a federal contract award, and the procedure by which the contract offers were solicited, in one of three forums: (1) the agency whose procurement procedures are being challenged, (2) the U.S. Government Accountability Office (GAO),¹Â or (3) the Court of Federal Claims (COFC). This article provides a procedural guide for bringing a federal bid protest at the GAO.²

“An interested party wishing to protest [a federal government procurement] is encouraged to seek resolution within the agency (see [FAR] 33.103) before filing a protest with the GAO, but may protest to the GAO in accordance with GAO regulations (4 CFR part 21).”³Â The procedures for GAO protests are outlined at 4 C.F.R. part 21⁴ and require strict compliance or the GAO will not consider the protest.⁵

In many ways, the GAO represents a happy medium between an agency-level protest and a COFC protest. Although agency-level protests are generally the cheapest and quickest forum for obtaining relief in a procurement protest, such protests have inherent disadvantages. Agency-level protests lack the element, or at least the appearance, of totally independent review. After all, in an agency-level protest, the official reviewing the protest is an officer of the very same agency whose conduct and decision is being protested. The GAO provides protestors a venue that retains many of the advantages of an agency-level protest. In addition, it is adjudicated by an official who is not associated with the procurement agency. Although the GAO may not be as fast, cheap, or informal as an agency-level protest, it remains competitive with agency-level protests in all of these factors, and is almost always cheaper and faster than a COFC protest. Also, similar to agency-level protests, the GAO provides timely protestors with an automatic stay of the award or performance of the contract at issue. Unlike at the GAO, there is no automatic stay procedure for protests filed at the COFC. This is a critical difference because if the procurement process is allowed to continue while the protest is pending, a successful protestor will likely be limited to recovering its bid preparation and protest costs. However, if the protestor can stay the procurement process while the protest is pending, then a successful protestor may be entitled to more valuable relief, such as the termination of the contract or resolicitation of the procurement at issue. Another advantage to filing a protest at the GAO is that the person adjudicating the protest is likely to have more experience handling the procedural and substantive intricacies of bid protests. GAO hearing officers are usually highly experienced attorneys who specialize in bid protests, whereas COFC judges handle many other types of cases besides bid protests. However, there are more checks and balances on the quality of COFC judges, who are vetted through the Senate confirmation process, compared to GAO hearing officers, who are simply appointed by the GAO’s Office of General Counsel. The biggest disadvantage of GAO protests may be that the GAO’s decision serves as a non-binding recommendation to the agency. However, this disadvantage is more one of perception than reality, as nearly all GAO protest decisions are fully implemented by the applicable agency.⁶

History of the GAO

Created by the Budget and Accounting Act of 1921,⁷ the GAO became the first external forum for federal bid protests.⁸ The GAO was established as an independent governmental agency under the control and direction of the Comptroller General for the United States.⁹ Even though the statutes giving GAO jurisdiction to hear bid protests were not enacted until the mid-1980s, the GAO has been hearing bid protests since the 1920s.¹⁰

Standing to Protest at the GAO

To have standing to bring a bid protest at the GAO, the protestor must be an “interested party.”¹¹Â Bid protest regulations define an “interested party” as any “actual or prospective bidder or offeror whose direct economic interest would be affected by the award of a contract or by the failure to award a contract.”¹²Â This includes any party that is a disappointed bidder on the federal procurement contract that is the subject of the protest.¹³Â However, a disappointed bidder is not an interested party if there is no reasonable possibility it would be eligible for the award if the protest were sustained:

A protestor is an interested party to challenge the agency’s evaluation of proposals where there is a reasonable possibility that the protestor’s proposal would be in line for award if its protest were sustained. By contrast, a firm is not an interested party where it would be ineligible to receive award under the protested solicitation if its protest were sustained.¹⁴

For example, if the disappointed bidder were ineligible for award based on grounds not disputed in the protest, then the disappointed bidder cannot be an “interested party.”¹⁵ Likewise, where, even accepting the protesting bidder’s argument, the protesting bidder would not be “next in line” for the award, the protestor is not an “interested party.”¹⁶

The protestor has the burden of setting forth all information establishing that it is an interested party for the purpose of filing a protest.¹⁷

An interested party may protest any of the following to the GAO:

a solicitation or other request by a Federal agency for offers for a contract for the procurement of property or services; the cancellation of such a solicitation or other request; an award or proposed award of such a contract; and a termination of such a contract, if the protest alleges that the termination was based on improprieties in the award of the contract.¹⁸

Procedures for Initiating a GAO Bid Protest

Protests must be in writing¹⁹ and delivered to the GAO by hand, mail, commercial carrier, facsimile, or email.²⁰ A protest must:

(1) Include the name, street address, electronic mail address, and telephone and facsimile numbers of the protestor,

(2) Be signed by the protestor or its representative,

(3) Identify the agency and the solicitation and/or contract number,

(4) Set forth a detailed statement of the legal and factual grounds of protest including copies of relevant documents,

(5) Set forth all information establishing that the protestor is an interested party for the purpose of filing a protest,

(6) Set forth all information establishing the timeliness of the protest,

(7) Specifically request a ruling by the Comptroller General of the United States, and

(8) State the form of relief requested.²¹

Failure to comply with any of the above requirements may be grounds for dismissal of the protest.²²

The protestor must furnish the contracting agency whose decision is being challenged with a copy of the GAO protest, including all attachments, within one day of filing the protest with the GAO.²³

A protest also may include requests for a protective order, specific documents relevant to the protest, and a hearing.²⁴

Timeliness of Protest to the GAO

Protests based upon alleged improprieties in a solicitation must be filed before bid opening or the time set for receipt of the proposals, unless the alleged impropriety is not apparent before that time.²⁵ With the exception of negotiated procurement protests, all other bid protests must be filed no later than 10 calendar days after the basis of the protest is known or should have been known, whichever is earlier.²⁶ However, this 10-day requirement is not applicable if the protest is brought before the closing date for receipt of proposals.²⁷ The GAO has taken a variety of views on what constitutes constructive notice such that the 10 days begins to count, such as in the case of website postings of the contract award.²⁸

Where the protest is initially filed with the contracting agency, special timeliness rules apply. In those cases, any subsequent protest to the GAO must be filed not later than 10 days after the protestor learns of the “initial adverse agency action.”²⁹ Additionally, if the agency-level protest is untimely filed, any subsequent protest to the GAO is also untimely.³⁰

“A document is filed on a particular day when it is received by the GAO by 5:30 p.m., Eastern Time, on that day.”³¹Â The burden is on the protestor to include all information establishing timeliness at the time the protest is filed.³²Â â€œProtests untimely on their face may be dismissed.”³³Â â€œBecause bid protests may delay the procurement of needed goods and services, GAO, except under limited circumstances, strictly enforces the timeliness requirements.”³⁴ But “GAO, for good cause shown, or where it determines that a protest raises issues significant to the procurement system, may consider an untimely protest.”³⁵ “The ‘good cause’ exception is limited to circumstances where some compelling reason beyond the protestor’s control prevents the protestor from filing a timely protest.”³⁶ “The significant issue exception is limited to untimely protests that raise issues of widespread interest to the procurement community, and which have not been considered on the merits in a prior decision.”³⁷ These exceptions apply only to save a protest that is untimely, and cannot be used as a basis for considering a protest that is legally or factually insufficient.³⁸

What Can Be Protested at the GAO

Not only does the GAO restrict who can protest and when they can protest, but it also restricts what can be protested to the GAO. Generally, the GAO lacks jurisdiction to consider protests that are based on any of the following grounds: the administration of existing contracts, Small Business Administration issues, an affirmative determination of responsibility by the contracting officer, challenges to the suspension or debarment of contractors, protests asserting that the protestor’s proposal should not have been included or kept in the competitive range, or the decision by an agency tender official of whether or not to file a protest.³⁹ Except under a few discrete exceptions, a protest brought on any of these grounds will be summarily dismissed.⁴⁰ Furthermore, unless the procurement agency gives written consent, the GAO will not consider protests concerning (1) awards of subcontracts by or for a federal agency, (2) sales by a federal agency, and (3) procurement actions by government entities that do not fall within the strict definition of federal agencies in 4 C.F.R. § 21.0(c).⁴¹

GAO Actions Upon Receiving Protest

Notice to Parties

Upon receiving a protest, unless the protest is summarily dismissed,⁴²Â the GAO must give notice of the impending protest to the contracting agency by telephone within one day after the protest is filed, and must promptly send the protestor and the agency a written acknowledgment that the protest has been received.⁴³Â Upon receiving this notice, the agency must give all potential “intervenors” notice of the protest and provide them copies of the protest submissions.⁴⁴

Intervention

Other interested parties may be permitted by the GAO to participate in the protest as “intervenors.”⁴⁵ The GAO regulations define an “intervenor” as “an awardee if the award has been made or, if no award has been made, all bidders or offerors who appear to have a substantial prospect of receiving an award if the protest is denied.”⁴⁶

If an award has already been made, then generally the GAO only permits the “awardee” to intervene.⁴⁷ If the contract in question has not yet been awarded, then any interested party wishing to intervene (that is qualified to intervene under the circumstances⁴⁸) should give notice to the GAO and the other parties of its intent to intervene,⁴⁹ and then contact the GAO to learn whether it will be permitted to intervene.⁵⁰ The potential intervenor, or its representative, also should enter a notice of appearance to the GAO to ensure it promptly receives all communications in relation to the protest.⁵¹

Summary Dismissal

If the agency or any intervenor discovers a reason why summary dismissal would be appropriate, it should file a request for dismissal as soon as practicable.⁵²Â When a request is filed, the GAO will generally permit the protestor to file a brief in opposition to dismissal, and the GAO will promptly address the dismissal request.⁵³

Summary dismissal may be appropriate at any time that the GAO has information to determine the protest is deficient on procedural or jurisdictional grounds.⁵⁴ If the GAO grants the request for summary dismissal, either in whole or in part, the agency is not required to prepare a report in response to the protest or in response to those grounds of protest that were dismissed.⁵⁵

Automatic Stay

After the agency has received telephonic notice of the protest from the GAO, the agency may not award the contract. If the contract has already been awarded, the agency must suspend performance of the contract if the procuring agency receives notice of a protest from the GAO within 10 days after contract award, or within 5 days after a debriefing date, whichever is later.⁵⁶ However, due to subtleties in the GAO regulations, to ensure that the automatic stay provision in postaward protests is triggered, it is extremely important that the protest is filed at least one full day in advance of the deadline.⁵⁷

An exception to the automatic stay provision exists when the head of the agency authorizes the award “upon a written finding that urgent and compelling circumstances which significantly affect interests of the United States will not permit waiting for the decision of the Comptroller General [on the protest,]”⁵⁸ and the Comptroller General is given notice of this finding.⁵⁹

Although the GAO will not review an agency’s decision to override the automatic stay provision, some federal courts will review the agency’s decision to determine if it is arbitrary, capricious, an abuse of discretion, or otherwise clearly and prejudicially in violation of law or regulation.⁶⁰

Dynamics of Discovery in GAO Bid Protests

Agency Report

Once the agency receives telephone notice of the protest, it has 30 days to provide the GAO a complete written report responding to the protest.⁶¹Â The report is to include the contracting officer’s statement of the relevant facts including a best estimate of the contract value, a memorandum of law, copies of all relevant documents or portions of documents not previously produced, and a list of those documents.⁶²Â Though the report is to be simultaneously provided to the protestor and any intervenors, “[t]he agency may omit documents, or portions of documents, from the copy of the report provided to the parties if the omitted information is protected and a party receiving the report is not represented by counsel admitted under a protective order.”⁶³Â â€œProtected” material includes “proprietary, confidential, or source-selection-sensitive material, as well as other information the release of which could result in a competitive advantage” to one of the parties bidding on the contract.⁶⁴

“Occasionally, the agency may be aware of the existence of relevant documents that only the protestor possesses. In appropriate cases, the agency may request that the protestor produce those documents.”⁶⁵

Requests for Documents

In the protest filing, the protestor may request the agency to produce specific documents that the protestor shows are relevant to the protest.⁶⁶ After the agency report is filed, the protestor may file a request for any additional relevant documents, but such a request is permitted only if made within two days of the protestor having actual or constructive notice of the document’s existence or relevance, whichever is earlier.⁶⁷ If the protestor objects to the agency’s withholding of any requested documents, the GAO must decide whether the agency is required to produce the withheld documents, or portions of documents, and whether this should be done under a protective order.⁶⁸

Protective Orders

The purpose of a “protective order” is to help the protestor, through its counsel, learn the relevant facts when parts of the record are deemed protected.⁶⁹ The GAO views it as the responsibility of the protestor’s counsel in the first instance to request a protective order and to submit timely applications for admission to access protected material under the order.⁷⁰ A protective order may be justified if a relevant document contains “protected” material.⁷¹Â If no protective order is issued, the agency may withhold from the parties those portions of the agency report that would ordinarily be subject to a protective order.⁷²

After a protective order has been issued, only parties’ counsels or consultants may apply for admission to access material under the protective order.⁷³Â For this reason, it is very important that the protestor be represented by counsel in the bid protest process. If the protestor is not represented by counsel, issuing a protective order serves no useful purpose because the protestor cannot apply for access to the protected material without counsel.⁷⁴ Accordingly, any portions of the record that the GAO determines cannot be released without a protective order will not be released at all if the protestor refuses to obtain counsel.⁷⁵

“In considering the propriety of granting or denying an applicant admission to a protective order, [GAO will] review each application in order to determine whether the applicant is involved in competitive decision-making and whether there is otherwise an unacceptable risk of inadvertent disclosure of protected information should the applicant be granted access to protected material.”⁷⁶ With respect to the applications of consultants to a protective order, the GAO considers and balances a variety of factors, including the GAO’s “desire for assistance in resolving the specific issues of the protest, the protestor’s need for consultants to pursue its protest adequately, the nature and sensitivity of the material sought to be protected, and whether there is opposition to an applicant expressing legitimate concerns that the admission of the applicant would pose an unacceptable risk of inadvertent disclosure.”⁷⁷

Generally, other parties have two days to object to an application for admission under a protective order.⁷⁸ If there is no objection, the GAO will generally admit the applicant under the protective order.⁷⁹ If the applicant is granted access to protected material, he or she may not disclose any protected information to others.⁸⁰ This creates the unusual circumstance where the protestor’s attorney, who is granted access to protected information, cannot disclose relevant information to his client.⁸¹Â If the terms of the protective order are violated, both counsel and client are subject to a variety of sanctions, including dismissal of the protest.⁸²

Absent express prior written authorization from the GAO, material to which parties gain access under a GAO protective order may only be used in the protest proceedings for which the protest was issued.⁸³Â â€œGAO has generally permitted the use of protected material in the filing of federal lawsuits and before other administrative tribunals where the party seeking to use such material establishes that the material will be safeguarded.”⁸⁴

Protestor Comments on Agency Report

After receipt of the agency report, the protestor has 10 days to submit its comments on the report to the GAO. If the protestor does not submit comments within the 10-day period, the GAO will dismiss the protest.⁸⁵ Generally, comments that consist solely of general statements requesting that the GAO review the protest on the existing record are not sufficient to rebut the agency report.⁸⁶

In its comments, a protestor may not introduce new grounds for protest that could have been raised in its initial protest submission.⁸⁷ However, the protestor can raise new grounds of protest if the new grounds were first discovered upon receipt of the agency report and the protestor raises these supplemental issues within 10 working days of its receipt of the agency report.⁸⁸ Following the comment period, neither the agency nor any other party may submit additional statements for the record without GAO permission.⁸⁹

Hearings at the GAO

At the request of a party or on its own initiative, the GAO may conduct a hearing in connection with a protest.⁹⁰ A protestor requesting a hearing should do so in its initial protest filing, setting forth the reasons why a hearing is needed to resolve the protest.⁹¹Â Due to the increased cost and burden associated with a hearing, the GAO holds a hearing only when necessary.⁹²Â If the GAO grants a hearing, it usually holds a prehearing conference to resolve procedural issues.⁹³

The hearing is presided over by the GAO attorney assigned to the protest. Parties must submit a list of expected attendees to the GAO at least one day before the hearing, and the presiding GAO attorney may restrict access to the hearing to prevent the improper disclosure of protected information.⁹⁴ If a witness whose attendance has been requested by the GAO fails to attend the hearing or fails to answer a relevant question, the GAO may infer that the witness’s testimony would have been unfavorable to the party for whom the witness would have testified.⁹⁵

Within five days after the hearing, parties should submit comments to the GAO.⁹⁶ If the protestor fails to submit any comments, the protest is dismissed.⁹⁷

GAO Decision on the Bid Protest

Unless the GAO finds the protest appropriate for fast-tracking under the “express option,” it shall issue a decision on the protest within 100 days after the protest is filed.⁹⁸ If the GAO chooses the express option, a decision will be issued within 65 days after the protest is filed.⁹⁹ The GAO also has the option of using, where appropriate, “flexible alternative procedures to promptly and fairly resolve a protest.”¹⁰⁰ Once signed by the presiding GAO attorney, a copy of the decision is generally available on the GAO’s website within 24 hours and is distributed to the parties.¹⁰¹Â If the decision contains protected information, it will only be distributed to the agency and individuals admitted under the protective order, and, if possible, a redacted version will be made available to the public.¹⁰²

If the GAO determines that the agency’s procurement activities did not comply with statute or regulation, and such noncompliance prejudiced the protestor, the GAO will sustain the protest.¹⁰³Â In reviewing an agency’s evaluation, the GAO will “examine the agency’s evaluation to ensure that it was reasonable and consistent with the solicitation’s stated evaluation criteria and applicable procurement statutes and regulations.”¹⁰⁴ “A protestor’s mere disagreement with the agency’s judgment in its determination of the relative merit of competing proposals does not establish that the evaluation was unreasonable.”¹⁰⁵ If the GAO sustains the protest, it will recommend remedial action it “determines to be necessary to promote compliance with procurement statutes and regulations.”¹⁰⁶

GAO decisions are recommendations, and are not binding upon the procurement agency or any of the other parties to the protest.¹⁰⁷ However, the statutory language giving GAO jurisdiction to review procurement decisions indicates “that Congress contemplated and intended that procurement agencies normally would follow the Comptroller General’s recommendation.”¹⁰⁸ In fact, according to the GAO, in fiscal years 2000 through 2008, agencies have only declined to fully adopt the GAO’s recommendations on four occasions.¹⁰⁹ And, in one of these four cases, under threats from Congress to withhold project funding, the agency eventually implemented the GAO’s recommendation.¹¹⁰

Recoverable Costs in a GAO Bid Protest

Generally, if a protest is sustained, the GAO will recommend that the agency reimburse the protestor’s costs incurred filing and pursuing the protest,¹¹¹Â including attorney, consultant, and expert witness fees.¹¹²Â If the protest is sustained, but the protestor is deprived of an opportunity to compete for the contract at issue, then the GAO will likely award the protestor its bid and proposal preparation costs.¹¹³Â But “even where an offeror has been wrongfully denied award of a contract, there is no legal basis for allowing recovery of lost profits.”¹¹⁴

If the protest is denied, or closed after the agency takes corrective action prior to the GAO’s final ruling, the protestor may still be awarded its protest costs if the GAO determines that, in the face of a “clearly meritorious” protest, the agency “unduly delayed in taking corrective action.”¹¹⁵ Thus, even if the protest is “clearly meritorious,”¹¹⁶ the GAO will not recommend the award of costs if the agency takes responsibly prompt corrective action.¹¹⁷

As a general rule, the GAO considers a successful protestor entitled to reimbursement for costs incurred with respect to all issues pursued, not merely those upon which it prevails.¹¹⁸ The GAO will only sever the costs associated with unsuccessful protest issues if the “unsuccessful protest issue … is so clearly severable from the successful issues as to essentially constitute a separate protest.”¹¹⁹

If the GAO recommends the protestor be awarded costs, the protestor must file with the GAO a detailed claim for costs, certifying the time expended and costs incurred in pursuing the protest, within 60 days of the GAO’s decision to award costs.¹²⁰ The claim must be supported with adequate documentation.¹²¹Â Absent a “compelling reason beyond the control of the protestor [that] prevented the protestor from timely filing the claim,” failure to file an adequately substantiated cost claim within the 60-day window will result in the forfeiture of the protestor’s right to recover costs.¹²²

Review of GAO Decisions

Request for Reconsideration

Any party involved in the bid protest may request reconsideration of the GAO decision.¹²³Â The GAO must receive the request “not later than 10 days after the basis for reconsideration is known or should have been known, whichever is earlier,” and the request must “contain a detailed statement of the factual and legal grounds upon which reversal or modification is deemed warranted, specifying any errors of law made or information not previously considered.”¹²⁴ Unlike the initial protest, a request for reconsideration will not result in an automatic stay of contract award or performance.¹²⁵ Generally, the GAO will assign a different attorney to decide the request for reconsideration.¹²⁶

Appeal to the Court of Federal Claims

Where the protestor fails to obtain its desired relief from the GAO, or where the GAO’s decision to sustain the protest and grant relief to the protestor is not implemented by the procuring agency, the protestor can seek relief in the COFC. Generally, the subject of the COFC’s review is the agency decision, not the GAO recommendation.¹²⁷ Despite the fact that GAO decisions are not binding on the COFC, “the [COFC] recognizes GAO’s longstanding expertise in the bid protest area and accords its decisions due regard.”¹²⁸

Advice for Counsel

When seeking to protest a federal procurement, an interested party should carefully consider which forum’s protest procedures are most favorable under the circumstances. In some cases, the protestor will find the GAO’s procedures to be most advantageous. The GAO is a quick and inexpensive vehicle for a disappointed bidder to obtain relief from alleged improprieties in the procurement process. However, the GAO’s timelines are strict and normally inflexible. The procedural intricacies at the GAO require the practitioner to be knowledgeable and diligent when bringing a protest at the GAO. The best advice is for counsel to always check and double-check the GAO’s bid protest regulations because even if the protest is strong on its merits, counsel’s failure to follow GAO protest regulations can easily cost the protestor any chance at relief.