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"The lady doth protest too much, methinks." Shakespeare, Hamlet, Act III, Scene II

Dustin Hecker, Richard Bickelman October 24, 2012

Queen Gertrude, mother of Hamlet, Prince of Denmark, famously observed that one can, in fact, be too quick to protest.  Businesses seeking government contracts, however, should think twice about not protesting a contract award to a competitor.  Both the Federal and Massachusetts governments provide procedures for the review of procurements and to require agency action to reverse contract awards, when appropriate.  And if the agencies charged with such reviews fail to properly exercise their authority, then there is recourse to the courts.

For example, our lawyers recently convinced the United States Government Accountability Office (GAO) that the Department of Veteran's Affairs must reconsider its award of a contract to our client's competitor because the VA had failed to follow federal law by ignoring our client's substantial cost advantage compared to the bid submitted by its competitor.  On a more local level, our lawyers successfully challenged a contract award by the Commonwealth’s Operational Services Division (“OSD”) resulting in OSD rebidding the contract, which was subsequently awarded to our client.  More recently our lawyers convinced a court in Massachusetts to reverse the award of a contract made by a Massachusetts agency to a client’s competitor because the agency failed to properly apply the evaluation criteria set forth in its own Request for Proposals (“RFP”).

Background

With rare exceptions, significant government contracts are awarded after a public bid process.  The process requires the agency seeking vendors to identify the goods to be provided or the services performed under contract as well as the criteria the agency will use to evaluate bid responses.  Once the proposals or bids are submitted, the agency must evaluate them according to its published guidelines for that procurement.  Defects in the original RFP as well as in the application of the evaluation criteria provide a basis for challenging a contract award.

It is those occasions, when an agency fails to follow its own RFP or the evaluation guidelines it has mandated be used, that provide fertile ground to challenge agency procurement.  Moreover, an agency might not fully or fairly appreciate important parts of a bidder's package.  As in the case of our recent successful protests on behalf of clients, a federal or state agency might even have failed to factor into its analysis that the unsuccessful bidder proposed to provide the goods or services for a clearly better price.  All of those, and other defects both in the process and the result, can support a protest of a contract award.

Also, many contracts, both state and federal, are bid on the basis of obtaining the "best value" for the government.  Here, price is just one of many factors considered in the procurement and a low price may be outweighed by technical merit or other non-price considerations.  But generally, as in our recent federal matter, the "source selection authority" must "perform a price/technical trade-off; that is, to determine whether one quotation's technical superiority is worth its higher price."  An agency’s failure to perform that trade-off can provide grounds to invalidate the award of a contract.

Recent Client Success

We were retained to review the award of a federal bid shortly after the client was told it had “come in second” and after receiving the agency "debriefing" allowed under the federal regulations.  Through our analysis, it became apparent that the federal agency had focused on irrelevant differences in the technical proposals.  Most importantly, the agency had not conducted any meaningful analysis of the competing price proposals to warrant selecting the bid that supposedly was superior from a technical perspective.  Given the substantial deference afforded to an agency’s determination of the technical aspects of proposals submitted to it, we focused on the lack of analysis of the relative benefit of our client's better price proposal.

We successfully convinced the GAO that the agency had not considered whether the substantial cost benefit our client offered the government was outweighed by what the agency considered, incorrectly we argued, to be a somewhat better technical proposal.  The GAO agreed that the criticisms of our client's price proposal were unwarranted and, most importantly, that the agency had failed to conduct the required trade off analysis.  The GAO then recommended that the agency re-evaluate our client’s bid, focusing on the substantial cost savings, and reimburse our client for its costs.

In a state proceeding we brought before the Massachusetts Operational Services Division, we challenged on behalf of our client OSD’s application of its own evaluation criteria including the use of a “basket of goods” approach for developing pricing comparisons.  We argued that this evaluation criteria neither fairly nor accurately predicted the total costs to the Commonwealth from the procurement and thus was not indicative of “best value.”  OSD agreed and rebid the contract, resulting in an award to our client.

In another Massachusetts case, we represented a human services provider that had been scored highest by the contract evaluation team appointed by the awarding agency.  However, the agency’s Area Director rejected the team’s recommendation and awarded the contract to the second place bidder.  We appealed to OSD, arguing that in rejecting the award to our client, the Area Director failed to properly apply the evaluation criteria in the agency’s own RFP as it was required to do pursuant to OSD regulations.  Although the Operational Services Division affirmed the Area Director’s award to the second place bidder, we appealed to the Superior Court which agreed with our analysis and the award was set aside.

Don't delay in making the decision to protest -- the time available is short

Bid protests must be filed quite quickly.  Indeed, a federal bid protest, complete with detailed statements of the legal and factual grounds for the protest, must be filed with the GAO within 10 days "after the basis of protest is known or should have been known (whichever is earlier)."  A protest submitted after that date may be dismissed as untimely.  Clients can extend that time, generally, by promptly requesting a debriefing with the agency.  The protest then must be filed within 10 days after the date the debriefing is held.  There are similar time limits concerning appeals of state contracts to either the awarding authority or the Operational Services Division.

In that window, the client and its lawyers must analyze whatever information they receive from the debriefing about why the proposal was deficient and, if available, why the competing proposal was deemed more compelling.  Ideally, the debriefing provides enough clues about the decision-making process and the successful bidder's proposal that a compelling protest can be drafted immediately.  Because of the short time frames available for review, anyone considering appealing a government contract award should consider time to be of the essence.

If you have any questions or need additional information regarding this, please contact Dustin F. Hecker or Richard D. Bickelman.

This Alert is provided for information purposes only, and does not constitute legal advice.  According to Mass. SJC Rule 3:07, this material may be considered advertising. ©2012 Posternak Blankstein & Lund LLP.  All rights reserved.

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