Link: GAO Opinion
Agency: Department of Veterans Affairs
Disposition: Request denied.
Where agency took corrective action following several supplemental protests, request that Government Accountability Office recommend reimbursement of costs is denied where the initial protest grounds were not clearly meritorious, and corrective action was not unduly delayed in response to supplemental issues raised by the protester after receipt of the agency report.
General Counsel P.C. Highlight:
AGFA asserts in its request that it should be reimbursed the costs of filing and pursuing its protest because, by October 30, the VA was on notice of significant issues related to the pricing in Philips’ proposal and its compliance with the RFP scope of work (SOW), but failed to take corrective action until January 5. Specifically, AGFA alleges that, from its protests, the VA should have known that Philips’ proposal failed to comply with certain Integrating Healthcare Enterprise (IHE) standards in the SOW, shifted certain costs to the agency in its price proposal, and failed to commit to specific staffing requirements. GAO states that the Bid Protest Regulations provide that where an agency takes corrective action in response to a protest, GAO may recommend that the agency pay the protester its costs of filing and pursuing the protest. However, the GAO Regulations do not contemplate a recommendation for the reimbursement of protest costs in every case where an agency takes corrective action, but rather only where an agency unduly delays taking corrective action in the face of a clearly meritorious protest. Thus, as a prerequisite to GAO’s recommending the reimbursement of costs where a protest has been resolved by corrective action, not only must the protest have been meritorious, but it also must have been clearly meritorious. A protest is “clearly meritorious” where a reasonable agency inquiry into the protester’s allegations would reveal facts showing the absence of a defensible legal position.
AGFA first asserts that it should be reimbursed its costs based on the allegation in its initial protest that Philips’ proposal was technically unacceptable due to its failure to “comply with multiple mandatory technical requirements set forth in the RFP” related to IHE standards. AGFA contends that this issue was clearly meritorious, and that the agency unduly delayed taking corrective action. While GAO agrees that Philips’ proposal’s alleged failure to address certain IHE standards was a serious issue, GAO does not agree that the issue was so clearly meritorious as to reveal the absence of any defensible legal position. The “mandatory [IHE] technical requirements” referenced in AGFA’s initial protest were elements within the technical requirements section of the SOW. Of the four “IHE requirements” referenced, two were SOW provisions stating only that the proposed PACS “should” offer certain features; the remaining two provisions, while utilizing the word “shall,” did not use the word directly in reference to IHE standards. Given the imprecise language used in the SOW provisions referenced by AGFA, GAO concludes that the issue raised by AGFA was not clearly meritorious and does not provide a basis for reimbursement of AGFA’s protest costs.
AGFA next argues that it should be reimbursed for its costs based on the allegation in its first supplemental protest that Philips improperly offered zero prices for certain line items or that its price proposal was otherwise incomplete. These allegations were dismissed by GAO on November 12, for failure to state a sufficient factual basis. The allegations themselves demonstrated that AGFA had no knowledge of Philips’ price proposal at the time the protest was filed, and were grounded entirely in speculation based on the prices of various elements of AGFA’s own price proposal. As they were dismissed by GAO, these issues were not clearly meritorious and do not provide a basis for reimbursement.
Finally, AGFA argues that it should be reimbursed for its costs on the basis of its allegations that Philips’ proposal did not commit to certain staffing requirements, failed to propose a fixed price, and was materially unbalanced. GAO disagrees. These allegations were contained in AGFA’s second supplemental protest, which was filed on December 15, after the agency report. According to GAO’s scheduling order for the two supplemental protests filed by AGFA after receipt of the agency report, these issues were to be addressed by the agency by January 5. As the agency advised that it had decided to take corrective action on January 5, the agency did not unduly delay corrective action with respect to AGFA’s second supplemental protest. As a general rule, so long as an agency takes corrective action by the due date of its protest report, as was the case here, GAO regards the action as prompt, and will not consider a request to recommend reimbursement of protest costs. Accordingly, these issues do not provide a basis for recommending reimbursement of AGFA’s protest costs. The request is denied.