In our last post, we discussed a few procedural rules that can exclude an otherwise meritorious ground from protest. There are also a number of substantive issues that the GAO's rules exclude from review. See 4 C.F.R. § 21.5. We address them below, plus a bonus ground that might as well be non-protestable.
Contract Administration Matters: Generally, once a contract has been awarded, any disputes between the contractor and the contracting agency are outside the GAO's jurisdiction because the procurement process has concluded. Any disagreements over contract performance or administration are governed by the contractual disputes process and the Contract Disputes Act of 1978, and adjudicated (if necessary) by the Boards of Contract Appeals or the Court of Federal Claims. ( See our CDA timeline for an overview of that process.) Similarly excluded from GAO review are bid protest grounds complaining about contract administration issues involving a different contractor's performance, or speculating that an awardee may not perform the contract as required. See, e.g., Ashland Sales & Serv. Co., B‑408969, Nov. 1, 2013, 2013 CPD ¶ 256.
Small Business Size Standards and Awardee Size Status: For procurements set aside for small businesses, the procuring agency must assign a North American Industry Classification System (NAICS) code for the procurement, and that code will determine the employee-count or revenue size standard that eligible offerors may not exceed. ( See our post on NAICS code appeals here.) If a firm disagrees with the chosen NAICS code and size standard, or disagrees that a prospective awardee satisfies the size standard, the GAO will not review the protest. Instead, the Small Business Administration (SBA) is the sole forum for raising challenges of this sort.
Placement of a Procurement Under the SBA's 8(a) Program: Section 8(a) of the Small Business Act allows agencies to place a contract directly with the SBA, which in turn assigns contract performance to a qualified firm that participates in the SBA's 8(a) business development program. If an agency decides to go that route rather than allowing non-8(a) firms to compete for the procurement, the GAO will entertain a protest only if the protester can show bad faith by government officials (which is almost impossible to do) or a violation of the 8(a) program's governing regulations.
Affirmative Determinations of Responsibility: Before an agency awards a contract, it must determine that the prospective contractor is "responsible." "Responsibility" essentially means that a firm has the technical, financial, ethical, and other capabilities necessary to perform the contract. See generally FAR Subpart 9.1. Ordinarily, if the contracting officer determines that a firm is responsible, that determination is entitled to great deference and the GAO will not even review protests challenging the reasonableness of that determination. The GAO's regulations provide two narrow exceptions to this rule, however: The GAO will consider a protest if (1) the solicitation established "definitive responsibility criteria" that the awardee objectively did not meet or cannot meet by the time set in the solicitation or (2) "the contracting officer unreasonably failed to consider available relevant information or otherwise violated statute or regulation." An example of the first exception is, if the solicitation required the awardee to hold a certain security clearance or possess specific experience, the GAO will review a protest alleging the awardee lacks that clearance or specified experience. See, e.g., J2A2 JV, LLC, B-401663.4, Apr. 19, 2010, 2010 CPD ¶ 102. An example of the second exception may be that the awardee is demonstrably tottering on the edge of bankruptcy or under a federal fraud investigation, but the contracting officer failed to give appropriate attention to that fact. See, e.g., FCi Fed., Inc., B-408558.4 et al., Oct. 20, 2014, 2014 CPD ¶ 308.
Untimely Reported Violations of the Procurement Integrity Act: The Procurement Integrity Act (PIA) governs improper release or receipt of certain categories of procurement-sensitive information, such as a firm's bid or proposal information, or source-selection materials. If an offeror learns of a potential PIA violation, it then has 14 days to report it to the relevant agency. If the offeror does not do so, it is barred from later raising the suspected PIA violation as a protest ground, or from challenging the agency's investigation of (or failure to investigate) the alleged violation. See, e.g., AIS Eng'g, Inc., B-406186, March 7, 2012, 2012 CPD ¶ 106 at 6. This 14-day clock is independent of the GAO's normal 10-day protest timeliness rule and debriefing exception.
Protests Lacking a Sufficiently Detailed Statement of Legal and Factual Grounds: If a protester objects to a solicitation or award but does not sufficiently explain the basis of its objection, the GAO will dismiss the protest. Unlike most of the other grounds discussed in this post, it is not always clear whether a particular protest ground runs afoul of this prohibition. The GAO recognizes that a certain amount of factual speculation is often unavoidable in a protest, but if a protest is completely disconnected from any relevant facts or allegations, or identifies no cognizable legal ground for protest, GAO will not consider it. See, e.g., Crown Worldwide Moving & Storage, B-406614, Jul. 17, 2012, 2012 CPD ¶ 208 at 3 n.2 (dismissing protest ground wholly speculating about the contents of the awardee's proposal).
Protests of Procurements by Excluded Agencies: The GAO has protest jurisdiction over solicitation and contract awards by federal agencies subject to the Competition in Contracting Act. That includes most procurements by most executive-branch agencies and wholly owned government corporations. The GAO lacks jurisdiction, however, over certain bodies, such as the U.S. Postal Service. Although the GAO's regulations also disclaim jurisdiction over "nonappropriated fund activities," the GAO has interpreted that phrase narrowly and has accepted jurisdiction over protests of procurements by the Federal Prison Industries, the Overseas Private Investment Corporation, and the Consumer Financial Protection Bureau, all of which operate with nonappropriated funds. See Inf. Experts, Inc., B-413887; B-413887.2, Dec. 30, 2016, 2017 CPD ¶ 16; MFM Lamey Grp., LLC, B-402377, March 25, 2010, 2010 CPD ¶ 81; USA Fabrics, Inc., B-295737; B-295737.2, Apr. 19, 2005, 2005 CPD ¶ 82.
Subcontract Awards: GAO protests involve solicitation challenges and objections to an agency's contract award decision. The GAO will not consider a protest challenging a contractor's decision to award or not award a subcontract. There is a narrow exception to this rule where the agency awarding the prime contract has requested in writing that the GAO decide subcontract challenges as nonstatutory protests under 4 C.F.R. § 21.13—something that almost never happens. There is another very narrow exception for subcontract awards where an agency essentially "takes over" all substantive subcontract award duties from the prime contractor, such that the subcontract award is really "by a Federal agency" rather than by the prime contractor. See, e.g., Panther Brands, LLC, B-409073, Jan. 17, 2014, 2014 CPD ¶ 54. This, too, occurs only very rarely.
Suspensions and Debarments: Federal agencies have authority under FAR Subpart 9.4 to exclude specific entities and individuals from being considered for contract award due to a lack of present responsibility. If an agency formally has suspended or debarred a contractor, the GAO will not hear a protest challenging that action. Disappointed bidders occasionally allege they have been "de facto debarred" by an agency outside of the FAR Subpart 9.4 procedures. See Bilfinger Berger AG Sede Secondaria Italiana, B-402496, May 13, 2010, 2010 CPD ¶ 125 ("A de facto debarment occurs where a firm is excluded from contracting because of a contracting agency's making repeated determinations of nonresponsibility or even a single determination of nonresponsibility as part of a long-term disqualification attempt, without following the procedures for suspension or debarment set forth in FAR Subpart 9.4."). Although the GAO will entertain protests alleging de facto debarment, the GAO appears never to have sustained a protest on this ground.
Inclusion in the Competitive Range: During a procurement, agencies may narrow the field of competition before opening discussions. This is called establishing a competitive range. Although the GAO will entertain protests objecting to a firm's exclusion from the competitive range, it will dismiss a protest that argues the agency improperly included a particular competitor in the range. This reflects the GAO's general inclination not to object to agency actions that increase competition.
Debriefing Challenges: Agencies sometimes play fast and loose with their obligation to provide a meaningful debriefing when a debriefing is required. ( See our previous discussion of debriefings here.) Agency noncompliance with the debriefing requirement can undermine a firm's ability to protest effectively, or can drive the firm to waste resources by protesting unnecessarily. There is, however, no mechanism for challenging an improper debriefing, and the GAO will dismiss a protest ground attempting to do so. A1 Procurement, JVG, B-404618, March 14, 2011, 2011 CPD ¶ 53 at 5 n.5 ("Our Office will not review a protester's contention that the debriefing it received was inadequate because the adequacy of a debriefing is a procedural matter that does not involve the validity of an award."). Similarly, agency officials sometimes misspeak during debriefings. When a debriefing statement or debriefing document suggests a procurement error occurred, but the contemporaneous evaluation and source-selection record documents that the error did not occur, the GAO will rely on the formal record rather than the debriefing communications. See Coastal Defense, Inc., B-413890, Dec. 19, 2016, 2016 CPD ¶ 371 at 5 (comments allegedly made by the agency during the debriefing provided no basis for sustaining a protest ground where they were contradicted by the official procurement record).
Special Mention – Allegations of Bad Faith: There is one substantive protest ground that, although not excluded by the GAO's regulations, is almost always doomed to fail: allegations of bad faith against agency officials. Disappointed bidders occasionally believe that agency officials have connived specifically to prevent them from being awarded contracts. In our experience, agency officials occasionally mess things up unintentionally, but very rarely set out to harm any particular offeror. And, although agency officials are accustomed to protests alleging unreasonable conduct, they are not accustomed to being accused of malice. Even on those rare occasions where there is potential evidence of bad faith, the legal standard for proving the bad faith of an agency official is so extraordinarily high that such allegations almost always fail. Before the GAO will sustain an allegation of bad faith, "the record must show 'well-nigh irrefragable proof' that the agency had a malicious and specific intent to injure the party alleging bad faith." Delta Data Sys. Corp., B‑213396, Apr. 17, 1984, 84-1 CPD ¶ 430 (quoting Kalvar Corporation, Inc. v. United States, 543 F.2d 1298, 1301 (Ct. Cl. 1976)). Ralph Waldo Emerson observed: "When you strike at a king, you must kill him." If a protester does not have incontrovertible evidence of an agency's malicious and specific intent to injure the protester in some prejudicial way, it's almost always best not to strike at the king (and a potential customer) with an allegation of bad faith.
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Having discussed the protest grounds you cannot or should not raise, our next posts in this series will explore individual grounds that may lead to a sustained protest.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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