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Intervening in a Bid Protest: A Must in the Current Procurement Atmosphere

Client Alert

Authors: Michael A. Hordell and Kristopher Berr

5/30/2017
Intervening in a Bid Protest: A Must in the Current Procurement Atmosphere

Intervening ensures that your company’s interests are represented in the bid protest.

Your company has been awarded a contract based on the work of your team to identify a federal business opportunity and create a winning proposal. But before you can start performing your contract, a protest is filed. What are your options?

Often, companies do nothing and rely on the procuring agency to defend the award. Most of the time, this is a mistake because the impacts of a protest are not the same for the agency and your company. It is important for a company to have eyes, ears and a voice during a bid protest, but that can only happen if the company exercises its right to intervene and participates in the bid protest. This article discusses the strategic reasons to intervene and addresses the basics of intervention.

Why Intervene in a Bid Protest?

Intervening ensures that your company’s interests are represented in the bid protest. It is tempting to remain silent and let the agency defend its decision to award your company the contract. But you should not assume, even if you had a conversation with the contracting officer and/or agency counsel, that the agency plans to defend its award. This is because agency headquarters can, for reasons it deems appropriate, decide to take corrective action.

Corrective action allows the agency to redo part or all of the procurement, including its decision to award the contract to your company. Recently, there has been an increase in agencies taking corrective action after reviewing the protest and the evaluation record. In fact, in the Government Accountability Office’s (GAO’s) Bid Protest Annual Report to Congress for Fiscal Year 2015, GAO reported that agencies took corrective action in 42 percent of bid protests closed that year.

In our experience, the agency’s decision to take corrective action is not always the right one. But, by intervening in the protest, we have had the opportunity to advocate our position as to why corrective action is not necessary. In many instances, this has led the agency to continue to defend its award decision, rather than taking corrective action. Even if the agency ultimately decides to take corrective action, the intervenor is well-positioned to fight to preserve its contract award and/or limit and narrow the agency’s corrective action.

Your company can also intervene to assist the agency in defending its award. There are many reasons why an agency would appreciate an awardee’s assistance. For example, agency counsel (or the Department of Justice attorney who represents the government at the Court of Federal Claims) may not have time to search for a particular precedent or may want to discuss a specific issue. In these circumstances, agency counsel has sought support from the awardee’s counsel. A company may lose the invaluable opportunity to assist in the agency’s defense of its award decision if it does not intervene. Also, agency counsel may have specific questions, and intervening provides an intervenor’s counsel the opportunity to answer those questions, obtain that information and potentially discuss legal strategies, and provide case support.

Further, almost every bid protest contains protected material, which needs to be redacted before public versions of filings are released. These redactions are done by agreement of the parties with the bid protest arbiter, either the GAO or the Court of Federal Claims (COFC), settling any disputes. Without an intervenor’s participation, decisions affecting the intervenor’s proprietary information will left to the agency and the protester. Obviously, intervenor’s counsel would be more focused on protecting the intervenor’s proprietary information, and keeping information from its competitors, than the agency and the protester.

A company’s decision to intervene should not be made after receiving a bid protest. Rather, it should be part of the company’s bidding strategy, and should be raised, discussed and decided well in advance of submitting a proposal. Unfortunately, bid protests are an indelible facet of contracting with the federal government today. Companies must marshal resources and make sure they have a say, through counsel, in defending their awards. By accepting that the decision to intervene will most likely arise from a hard-fought procurement, experienced contractors should ensure that procurement counsel is kept current on the various contracts the company is pursuing and familiar with the agency’s correspondence concerning those matters. This will allow counsel to be better prepared to effectively protect the company’s interest in protesting or defending an award.

The Basics of Intervention

Both the COFC and the GAO permit intervention.1 The COFC procedures in protest cases are set forth in Appendix C of the Rules of the U.S. Court of Federal Claims. Those rules require the plaintiff’s counsel, before filing a protest, to provide at least 24 hours’ advance notice to various parties, including the successful awardee, in cases where there has been an award and the plaintiff has received notice of the awardee’s identity. This gives the awardee time to prepare its request to intervene. While the COFC does not require prefiling notice to interested parties that are not the successful awardee, and therefore a protester may lack knowledge of them, these interested parties must be identified at the initial status conference.

Most bid protests, however, never make it to court and are decided at the GAO. If the protest was filed at the GAO, a potential intervenor should receive notice of the filing from the contracting agency. The GAO’s bid protest rules require the GAO to notify the contracting agency by telephone within one day after the filing of a protest. The contracting agency then provides notice of the protest to the contractor if an award has been made.

After receiving notice, the next step is to file a request to intervene. At the COFC, the intervenor should file a motion to intervene, explaining why it should be permitted to intervene and providing a proposed order. All parties must be served with the motion. We usually contact the protester and other parties in advance, so that we can include in our motion that those parties have received the motion and have no objection to it. This expedites admission and participation in the case.

If we receive notice of the intent to file a bid protest at the COFC, we usually ask the protester’s counsel when the protest will be filed. This allows us to file our motion to intervene as soon as possible and ensures that we will be included if there is an expeditious conference call or an in-chambers meeting.

At the GAO, intervening is easier and quicker. The prospective intervenor only needs to send a letter to the GAO, the agency, the protester and any other participant demonstrating why it is an interested party and asking that it be permitted to intervene. We attempt to intervene as soon as possible after we receive notice of the protest, typically on the same day.

If the request to intervene at either the COFC or the GAO is granted, the intervenor can participate fully in the bid protest. The one caveat is that, if a protective order is issued by either the COFC or the GAO, source selection and evaluation data, including proprietary business information, will not be released to individuals involved in decision-making for a company.

We have years of experience counseling large and small businesses on bid protest issues, including intervening. If you have any questions or need additional guidance, please contact the authors.

Endnote

1 In addition to bid protests at the COFC and the GAO, there are also agency-level bid protests. Although the rules provide for notice to offerors when the award is withheld pending agency resolution of the protest, the rules for these protests do not provide a procedure to intervene. Intervention in an agency-level protest is at the discretion of the agency, and some agencies only permit intervention in rare circumstances, if at all. In addition, the issue of how protected material must be treated is complicated by the fact that often agency-level protests are pursued by companies without using outside counsel. Under these circumstances, it may be difficult or impossible to create a protective order mechanism to allow intervenors access to source selection data or sensitive or business-proprietary materials.

The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship.