As a government contractor, at one point or another you’ve probably encountered a bid protest. Maybe you missed out on an award and felt that the Government didn’t properly apply the terms of the solicitation. Maybe someone protested your socioeconomic status (such as if the contract was an SDVOSB set-aside). Or maybe you protested someone you suspected was ineligible.
Overall, protests are not fun. No one wants to be involved in one. They are, however, sometimes necessary, which is unfortunate given the time and money it would save if the government always properly evaluated proposals and only awarded contracts to eligible contractors.
One question I get a lot as a procurement law attorney is whether someone who brings a bid protest at the Government Accountability Office (“GAO”) can recover filing costs if they prevail. After all, if the government errs in evaluating a proposal, resulting in the time, stress, and money required to hire an attorney to pursue a contract, why should the contractor be penalized?
Long story short, the answer is a protestor is usually out the costs of protesting to the GAO. The bar is high, because the protestor has to show two things: one, that the protest was “clearly meritorious;” and two, that the agency unduly delayed in taking corrective action to remedy its mistake.
In other words, it’s not enough that source selection officials make a gross error in evaluating proposals; the contracting agency also has to drag its heels once the contractor files a protest to complain about the error.
A recent GAO decision illustrates this principle: in Cape Environmental Management, Inc., a protestor unsuccessfully attempted to recover its costs after an agency took corrective action. (B-412046.3, September 30, 2016). The GAO noted that a “clearly meritorious” protest is one where the issue is “not a close question” and the government has “no defensible legal position.” Because the GAO found that the protestor had not established this element, it didn’t reach the second element of undue delay. (As a note, there is generally no entitlement to fees if the agency takes corrective action prior to the due date of its agency report).
Basically, if you are considering protesting a lost contract to the GAO, know that it will involve a monetary investment. Absent fairly extraordinary circumstances, you won’t recover your filing fees.
As such, consider whether “going after the prize” is worth it to your business.
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