Government contractors sometimes have to make a decision to engage in protesting federal government contract awards. This level of litigation can be brought before the contracting agency, the Government Accountability Office, or the U.S. Court of Federal Claims.
To help to make the process easier, companies should start the decision process at the time when they initially decide to propose on government contracts for bid.
The first thing that your company must find out when filing a government contract protest is whether a court has jurisdiction to hear the case. Your competitors usually take all of the below information into consideration before filing a bid protest.
Government contract protests at All Levels Have a 70% Failure Rate! WHY..
Contractors fail to convince the court. They fail to adopt the proper legal standards. They fail to focus on the government great latitude and instead simply rely on their own conclusions.
Failure to consider the important legal standards that set the tone of the case. Only 60% of companies have some idea of the legal requirements to win a protest. 30% of those can effective configure the legal and factual basis in the court documents. 40% of those end up with the agency taking serious consideration of taking corrective action.
At the Court of Federal Claims, the Administrative Dispute Resolution Act of 1996 (ADRA) gives the Court of Federal Claims exclusive jurisdiction over procurement protests of government contract awards. There is a lot of litigation and pushback from contracting agencies on the issue of jurisdiction. As a result, government contractors end up spending a lot of legal fees litigating the issue. Your government contract protests lawyer should make sure this issue is resolved up front.
At the GAO level, when protesting government contract awards, contractors must be familiar with GAO protest guidelines. There certain disputes that GAO cannot hear. An example would be issues related to contract administration or small business size protests.
You must have standing to file government contract protests
Although you may seem to have a legitimate concern to file a government contract protest against your competition, you must first have standing to file the protest for any federal contracts awarded. At the Court of Federal Claims, having standing to bring a bid protest is governed by 28 U.S.C. § 1491(b)(1), which … imposes more stringent standing requirements than Article III.” Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1359 (Fed. Cir. 2009).
To bring the protest, government contractors must show that they are an “interested party,” 28 USC 1491(b)(1). To show that you are an interested party, you have to overcome certain legal hurdles. They include:
- You are n actual or prospective bidder and
- That you possess the requisite direct economic interest and was prejudiced. Rex Serv. Corp. v. United States, 448 F.3d 1305, 1307 (Fed. Cir. 1996). You must show that you had a substantial chance of winning the contract but for the problem you are asking the court to address. See Tech. & Applications Corp. v. United States, 316 F.3d 1312, 1319 (Fed. Cir. 2003).
What is the Legal Standard of Review When Protesting Federal Government Contract Awards?
Federal contractors often make the mistake of just focus on the dispute at hand. However, you must also understand the legal standard of review that the court must abide by. In addition to highlighting the alleged agency error, you also have to convince the Court of Federal Claims that the agency action was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law and was prejudicial to your company. 28 USC 1491(b)(4); 5 U.S.C. § 706(2)(A); Glenn Defense Marine (Asia) PTE, Ltd. v. United States, 720 F.3d 901, 907 (Fed. Cir. 2013). Without this additional factor, your bid protest will fail.
The basis for attacking the agency: When protesting federal government contract awards, you have to show that the contracting officer “entirely failed to consider an important aspect of the problem, somehow have an explanation for its decision that runs against the evidence before the agency during the evaluation or solicitation stage, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.” Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
Why do contractors fail? The courts place a heavy burden of showing that an agency’s decision lacked a rational basis. Under COFC or GAO bid protest regulations, you cannot simply make conclusory allegations or rely on the court documents alone. To win a bid protest, your lawyer must dig into the facts of the record and show that either the agency did not follow the solicitation requirements, violated procurement law, or simply acted unreasonably. Companies that proceed without legal counsel often falls into this landmine.
Avoid thinking that filing a bid protest means that the court substitutes the agency’s business judgment. At the Court of Federal Claims level, and similarly at GAO, reviewing the agency action is limited to what the record shows. It’s all about the record before the court.
Agencies often lose government contract protests because what they argue is not shown in the record. Alternatively, you have to support your legal and factual position by pointing to the agency record and also supporting with case law and other legal authority.
Where should you file? When your company decides to protest US government contract awards, you also have to make a strategic decision about where to file. The choices are the agency; Government Accountability Office (GAO) or the US Court of Federal Claims.
Agency level bid protest: Most contracts avoid this choice. You are essentially asking the agency to reverse its own award decision or to change its original position. Although this is the least expensive route, the chances of prevailing are very slim.
GAO protests: A substantial amount of federal contractors protest government contract awards at the GAO level. GAO attorneys are assigned to oversee the case and make a final decision. The timeline to decide the case is 100 days after filing of the protest. There is also an Automatic Stay of the procurement until the decision is made.
However, the chances of prevailing are very low. Many decisions are based on a lack of showing that the agency acted unreasonably. This aspect is critical to increase your chances of winning.
Court of Federal Claims bid protests: Companies challenge federal government contract awards at this level sometimes because this court is assigned federal judges, similar to a local district court. Sometimes companies believe that they are getting a fair shot at the litigation process.
Filing a bid protest at the Court of Federal Claims means that procedural rules are very formal. Having legal counsel is essential at this level. Challenging the agency’s decision at this level is more expensive than all of the other choices. However, some companies believe that the stakes are oo high to decide on one of the other protest choices. Look at the pros and cons before proceeding.
Note: If you protest at the GAO level and get an adverse decision, you can still file a totally new protest at the Court of Federal Claims. The COFC bid protest is not a direct appeal from GAO. However, if you prevail at this court, the decision is binding on the GAO.
Note: Also, be aware that there is no automatic stay at this court. Lawyers must file and argue for a Temporary Restraining Order (TRO).
Type of relief at the Court of Federal Claims for Government Contract Protests
The statutory language of 28 USC 1491(b)(2) provides that “the courts may award any relief that the court considers proper, including declaratory and injunctive relief except that any monetary relief shall be limited to bid preparation and proposal costs.”
- A successful bid protest plaintiff may receive its bid and proposal preparation costs or injunctive relief, but not both.
Permanent / Temporary Restraining Order or TRO
The Supreme Court has held that an “injunction is a drastic and extraordinary remedy, which should not be granted as a matter of course.” Monsanto Co. v. Geertson Seed Farms, 130 S.Ct. 2743, 2761 (2010) (citation omitted).
Court must consider certain things when making a decision about a request for a Temporary Restraining Order. Even if a government contractor were to succeed upon the merits of its case, the court must also consider three additional criteria before ordering a permanent injunction:
- “whether the plaintiff will suffer irreparable harm if the court withholds injunctive relief”;
- “whether the balance of hardships to the respective parties favors the grant of injunctive relief”; and
- “whether it is in the public interest to grant injunctive relief.” PGBA, LLC v. United States, 389 F.3d 1219, 1228-29 (2004) (citations omitted).
At the Court of Federal Claims, government contractors must establish an entitlement to injunctive relief by clear and convincing evidence. Baird Corp. v. United States, 1 Cl. Ct. 662, 664 (1983) (“Where injunctive relief is sought, which relief is deemed drastic in nature, the court must exercise great caution and even then, the aggrieved bidder should be made to establish its right to such drastic relief by means of clear and convincing evidence.”) (citation omitted).
If you do not show irreparable harm, then the court must deny its request for a permanent injunction. See eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006); cf.Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001) (“a movant cannot be granted a preliminary injunction unless it establishes both of the first two factors, i.e., likelihood of success on the merits and irreparable harm.”) (emphasis in original).
The court may award attorney’s fees and protest costs pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412(d)(1)(A). Crux Computer Corp. v. United States, 24 Cl. Ct. 223 (1991); Bailey v. United States, 1 Cl. Ct. 69 (1983).
Government Contract Protest Appeals
At the agency level, when the contracting officer makes a decision, you still can file a GAO protest within ten days of the agency protest decision.
At the GAO level, there are no direct appeal rights. You can ask GAO to reconsider its decision. However, they are seldom granted. Instead, contractors can file a new protest at the Court of Federal Claims. This should be done as soon as possible after the GAO decision.
If you file a protest at the U.S. Court of Federal Claims and receive an adverse decision, you can then appeal the COFC government contract protest decision to the US Federal Circuit Court of Appeals.
Improve Your Chances of Protesting Government Contract Awards