The U.S. Court of Federal Claims Just Changed the Calculus for Deciding Whether to Intervene in a Bid Protest
By Oles Morrison on October 24, 2017 | Posted in Bid Protests
Last week, the U.S. Court of Federal Claims (COFC) published an opinion in Sonoran Tech. and Professional Services, LLC, v. United States, dismissing all of Sonoran’s bid protest claims as untimely. There are a number of timeliness issues discussed in the Sonoran opinion. One of the holdings from Sonoran that contractors (especially awardees with contracts under protest) need to be particularly aware of is that, according to the COFC, a protester is charged with knowledge it would have gained if it had intervened in an earlier bid protest concerning the same procurement. Awardees (and any other interested parties) need to take this holding into consideration when deciding whether to intervene. While before there may have been reasons why an awardee (or other interested party) might not intervene in a bid protest, the Sonoran opinion makes the decision on whether to intervene an obvious one.
In the procurement in Sonoran, the awardee was required to have a facility security clearance (FCL) at the time of the award. When Spectre Pursuit Group, LLC (SPG) submitted its proposal, it did not have the required FCL, and as a result the contracting officer determined that SPG was not eligible for award, and promptly awarded the contract to Sonoran. SPG filed a bid protest challenging this decision, first at the Government Accountability Office (GAO) and then at the COFC, arguing that the decision to eliminate its proposal was a de facto negative responsibility determination and therefore the Air Force was required to refer the matter to SBA for a Certificate of Competency (COC). The Air Force took corrective action in response to the COFC protest, and referred the matter of SPG’s responsibility (through the COC process), to the SBA.
However, the SBA notified the Air Force and SPG that it could not make a responsibility determination because the contract had already been awarded to Sonoran. As a result, SPG filed a new bid protest at the COFC challenging the SBA’s failure to make a responsibility determination.
Following SPG’s second COFC bid protest, the SBA decided that SPG’s case presented “unique circumstances” warranting reconsideration — including the fact that SPG had filed a protest, the Air Force had informed the COFC that a COC would be processed, and the Air Force committed in writing to terminate the award to Sonoran once SBA issued a COC to SPG — and withdrew its earlier decision. On Jan. 24, 2017, after SPG had secured an FCL, the SBA determined that SPG was responsible and issued a COC despite Sonoran’s contract still being in effect. On Feb. 2, 2017, the Air Force terminated Sonoran’s contract and made an award to SPG.
Sonoran did not intervene in any of the SPG’s bid protests, despite being the awardee and being eligible to intervene.
After Sonoran’s contract was terminated and contract award was made to SPG, Sonoran filed its own bid protest at the COFC. Sonoran’s protest concerned challenges to the solicitation, the evaluation, and the corrective action itself.
The COFC Concludes that Sonoran is Charged with Knowledge of Information Disclosed in a Bid Protest in which it Did Not Intervene
As to the challenges to the corrective action, the Air Force argued that these challenges should be dismissed because “Sonoran did not challenge the Air Force’s corrective action prior to the Air Force making its final award.” Sonoran countered that, since it did not intervene in the prior protests, it did not have sufficient notice of the Air Force’s intent to take corrective action and therefore cannot be penalized for waiting to mount its challenge. The COFC sided with the Air Force, holding as follows:
Sonoran argues that it did not have sufficient notice of the Air Force’s intent to take corrective action and therefore cannot be penalized for waiting to mount its challenge. …. However, Sonoran’s arguments are completely without merit; in fact, Sonoran had both ample notice of the proposed corrective action and ample time to challenge it. For example, Sonoran surely would have learned that corrective action was on the horizon if it had intervened in SPG’s initial bid protest before this Court on November 28, 2016, after the Air Force declined to refer SPG to the SBA for a responsibility determination. …. It chose not to intervene. …. Sonoran also could have intervened in SPG’s second bid protest before this Court on January 6, 2017, after the SBA notified the Air Force and SPG that it could not make a responsibility determination because the contract had already been awarded to Sonoran. …. Once again, it chose not to intervene. …. Why Sonoran chose not to intervene in either of these protests is beyond the Court’s comprehension, as Sonoran should have known that its award was at risk of being rescinded and granted to SPG instead as a result of potential corrective action.
Even putting Sonoran’s failures to intervene aside, it still had ample notice that the Air Force was taking corrective action from other sources, including the Air Force’s notice of intent to take corrective action filed on December 7, 2016 … and this Court’s subsequent dismissal of SPG’s first protest on December 8, 2016. …. These documents were not filed under seal and were publically available for a nominal fee on PACER. Sonoran’s argument that it should not be responsible for monitoring a public docket involving its own contract award because “access to PACER requires registration and payment for documents” is unpersuasive, especially given its status as the initial recipient of a $37,307,142 contract award.
In sum, Sonoran had approximately two months to challenge the Air Force’s proposed corrective action from the time it reasonably should have learned of the potential corrective action by way of SPG’s first protest in this Court on November 28, 2016, to the time the SBA issued SPG a COC on January 24, 2017. …. Sonoran was not permitted to wait for the Air Force to complete the corrective action to see if its award was upheld. See Blue & Gold Fleet, 492 F.3d at 1313. Accordingly, the Court finds that Sonoran waived Counts IV and V of its complaint, thus rendering Sonoran’s entire complaint untimely.
What Does this Part of Sonoran Mean for Contractors
This part of the Sonoran opinion — effectively charging Sonoran with knowledge it would have gained if it had intervened in the earlier protest — has potential implications for protesters and awardees not just at the COFC (as is evident from the Sonoran decision itself), but also at GAO.
The issue of when a protester “should have known” of its protest basis does not often come into play in protests at the COFC. However, at the GAO (which has different timeliness rules) when the protester “should have known” of the basis for its protest is usually the critical element for measuring whether a GAO bid protest is timely. Specifically, per 4 C.F.R. 21.2 , except for protests concerning “alleged improprieties in a solicitation which are apparent prior to bid opening or the time set for receipt of initial proposals” and protests following a timely agency-level protest, all other protests must be filed “not later than 10 days after the basis of protest is known or should have been known (whichever is earlier),” subject to a time extension for a requested/required debriefing. If GAO were to adopt the logic in Sonoran (which GAO is not compelled to follow), a protester would be charged with constructive knowledge of any information disclosed in a prior bid protest that it had the right to intervene, even if failed to intervene in that prior protest. In other words, per Sonoran, if you are eligible to intervene in a bid protest (generally those eligible to intervene are “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”), you are deemed to have constructive knowledge of any information revealed during the course of that protest, even if you fail to intervene in the protest.
While it is not certain that GAO would adopt this position from Sonoran, it is not that much unlike GAO’s prior holdings in relation to when a protester is considered to have knowledge of information disclosed in a debriefing where that debriefing was delayed at the protester’s own election. In these cases GAO has held that: “A protester’s failure to utilize the most expeditious approach to obtain the information that ultimately forms its basis for protest constitutes a failure to diligently pursue that information; to consider such a protest would be inconsistent with our goal of resolving protests expeditiously without unduly disrupting or delaying the agency’s procurement process.” If GAO considers intervention in a prior protest to be “the most expeditious approach” to obtain the information that ultimately forms the basis for subsequent protest, then GAO would likely adopt the COFC’s position in Sonoran.
Before Sonoran, we generally recommended to clients that they intervene in any bid protest that they were eligible to intervene in, especially if the protest was challenging a contract they had been awarded. However, there were rare occasions where intervention did not make sense pre-Sonoran. However, the Sonoran decision challenges this calculus completely. Given the COFC’s holding in Sonoran, and the possibility that GAO could adopt that same position in a future protest, it would be difficult to fathom a scenario where a contractor eligible to intervene in a protest (especially an awardee) would be better off not intervening.
For what its worth, this may not even be the biggest bombshell in the Sonoran opinion. Another holding in the Sonoran opinion — that “allegations that an agency’s evaluation of a proposal runs afoul of applicable statutes and regulations are challenges to the terms of the solicitation that must be brought before the close of the bidding process” — on its face would seem to require a protester to file speculative protests concerning an evaluation, prior to that evaluation even occurring, or risk being dismissed as untimely if filed after award. As another blogger (Stan Hinton) recently noted regarding this holding: “Let’s try to imagine what a “timely” protest by Sonoran would have looked like under the court’s reasoning. Sometime before bids were submitted, Sonoran would have had to allege that, because it knew who would submit bids and knew that one of them was only recently formed, it was certain the agency would evaluate that competitor’s past performance improperly because the agency would not properly take into account the SBA’s 50% rule when it got around to evaluating proposals. How long do you figure that protest would have lasted before it would have been dismissed as premature and speculative (and just plain lunatic, to boot)? Milliseconds would be my guess.”
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