Fiscal Year 2016 marked the seventh straight year that the budget set aside for federal government contracts has decreased. With fewer bidding opportunities, contractors of all sizes are utilizing aggressive tactics to maximize their chances of winning a federal government contract. Such was the case in a recent Government Accountability Office (GAO) bid protest decision, Aegis Defense Services, LLC, B-412755, March 25, 2016.
In Aegis, the Department of State issued a Request for Proposals (RFP) that contemplated the award of multiple indefinite-delivery/indefinite-quantity (IDIQ) contracts for security guard and patrol services. The Department of State awarded seven separate IDIQ contracts, including one to Aegis, and one to its competitor, Chenega-Patriot Group (CPG).
Aegis filed a bid protest at the GAO, contending that the CPG improperly misappropriated Aegis’s confidential, proprietary, and/or trade secret information to secure award of an IDIQ contract. Specifically, Aegis alleged that one of its former employees misappropriated Aegis’s information and used that information to aid CPG in the development of its proposal. Accordingly, Aegis argued that the Department of State’s award of an IDIQ contract to CPG was improper because the agency failed to conduct an adequate investigation concerning a potential violation of the Procurement Integrity Act (41 U.S.C. 2101). GAO dismissed Aegis’s protest, however, concluding that Aegis failed to demonstrate it was an “interested party.”
In accordance with GAO’s Bid Protest Regulations, GAO requires a protester to satisfy two elements in order to be considered an “interested party”:
- The protester is an actual or prospective bidder or offeror whose direct economic interest would be affected by the award or failure to award the contract; and
- the protester must demonstrate that is possesses a direct economic interest in the contract award.
After an examination of relevant case law, GAO determined that Aegis failed to satisfy both “interested party” elements. First, GAO concluded that once Aegis became an awardee of a contract, it could no longer qualify as an interested party. Put more specifically, as an awardee, Aegis was no longer an “actual or prospective bidder or offeror.” Second, GAO rejected Aegis’s argument that it “possesses a direct economic interest in that it will be forced to compete against [CPG] for task orders.” Instead, GAO reasoned that such an economic interest is too speculative and generally amounts to a premature challenge to any future task order awards.
Although GAO’s decision is likely uncontroversial, this case illustrates a creative bid protest argument aimed at increasing one company’s odds of winning more federal government contracts. As the saying goes, contractors better “gird their loins.”