Link: GAO Opinion
Agency: Department of the Navy
Disposition: Request granted.
Reimbursement of costs of filing and pursuing protest is recommended where a reasonable agency inquiry into protest allegations would have shown that agency had failed to reasonably evaluate awardee’s past performance and experience, and had conducted disparate, unequal discussions, but agency delayed taking corrective action until after submission of agency report responding to allegations and GAO conducted “outcome prediction” alternative dispute resolution.
General Counsel P.C. Highlight:
The GAO attorney advised, during the ADR from the prior protest by CTIC, that it appeared from the record, that the agency had acted improperly during discussions such that the past performance and experience/qualifications evaluations were affected. In this regard, discussions must be meaningful, equitable, and not misleading. Here, the record showed that the agency conducted discussions with DCK Pacific regarding the contracts it cited in its past performance and experience/qualifications proposals “[y]our proposal does not clearly demonstrate why the past performance and experience of Dick Corporation of Puerto Rico and Dick Pacific Construction Co., Ltd. Guam should be imputed to DCK Pacific, LLC” with the result that based on DCK Pacific’s discussion response, the contracts were imputed to DCK Pacific. In contrast, however, the agency failed to advise CTIC of informational deficiencies that precluded consideration as part of the evaluation of CTIC’s past performance and experience/qualifications of two of the contracts cited by CTIC, including at least one contract (for the Ironwood Estates project) for which the protester’s performance was reported as outstanding. Thus, it appeared from the record that the agency had engaged in improper, disparate treatment of the competing offerors during discussions. Since the results of the above deficiencies potentially called into question the agency’s determination that DCK Pacific’s proposal was superior to CTIC’s under the past performance and experience/qualifications factors, and thus called into question part of the basis for the determination that the advantages offered by DCK Pacific’s proposal warranted payment of the price premium associated with that proposal, the GAO attorney indicated during the ADR that it was likely that GAO would sustain the protest.
NAVFAC thereupon advised GAO that it intended to undertake corrective action. Specifically, the agency indicated that the agency would terminate the contract awarded to DCK Pacific and resolicit or in the alternative, reopen discussions with offerors and request revised proposals. CTIC thereupon requested that GAO recommend that the firm be reimbursed the costs of filing and pursuing its protest. Although the parties then entered into extended negotiations regarding CTIC’s entitlement to protest costs, NAVFAC ultimately advised GAO that a GAO decision would be necessary. GAO states that where a procuring agency takes corrective action in response to a protest, GAO may recommend reimbursement of protest costs where, based on the circumstances of the case, it determines that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. A protest is clearly meritorious where a reasonable agency inquiry into the protest allegations would have shown facts disclosing the absence of a defensible legal position. With respect to the promptness of the agency’s corrective action under the circumstances, GAO reviews the record to determine whether the agency took appropriate and timely steps to investigate and resolve the impropriety. While GAO considers corrective action to be prompt if it is taken before the due date for the agency report responding to the protest, GAO generally does not consider it to be prompt where it is taken after that date.
Here, the agency asserts that the initial protest did not include the operative facts that resulted in the ADR, and, as a result, “was not persuasive and certainly not ‘clearly meritorious.’” The agency concludes that the award of attorneys’ fees therefore should be “chiefly limited” to the period after submission of the agency report during which the protester was preparing its comments.
GAO finds NAVFAC’s position unpersuasive. As an initial matter, GAO notes that its willingness to inform the parties through outcome prediction ADR that a protest is likely to be sustained, as it did here, as a result of the deficiencies in the technical evaluation and conduct of discussions, is generally an indication that the protest is viewed as clearly meritorious, and satisfies the “clearly meritorious” requirement for purposes of recommending reimbursement of protest costs. GAO finds the agency’s corrective action, occurring only after the agency report and the ADR, to have been unduly delayed. In this regard, CTIC’s initial protest asserted that NAVFAC had improperly credited DCK Pacific, a recently formed entity, with the past performance and experience/qualifications of affiliated companies without consideration of whether there would be meaningful involvement of those companies in contract performance. Not only were the determinative facts regarding this issue apparent on the face of DCK Pacific’s proposal, but, in addition, CTIC’s concern in this regard was the same concern that NAVFAC itself raised during its discussions with DCK Pacific. In these circumstances, GAO thinks it to be beyond any reasonable dispute that a reasonable agency inquiry into CTIC’s protest allegation would have shown facts disclosing the absence of a defensible legal position.
Additionally, GAO likewise finds the agency’s corrective action to be unduly delayed with respect to CTIC’s challenge to the conduct of discussions regarding relevant contracts. In this regard, CTIC first asserted in its May 15 comments on the agency report that the agency had conducted unequal discussions, advising DCK Pacific, but not CTIC, of informational deficiencies regarding the nature of prior contracts cited in the proposals, with the result that several of CTIC’s cited contracts were found to be not relevant. Although it was apparent from the procurement record that NAVFAC had conducted disparate discussions in this manner, the agency, in its May 23 response, nevertheless disputed the assertion that discussions regarding relevant contracts were unequal or otherwise improper. It was only after the ADR, conducted by GAO more than a month later, that NAVFAC proposed corrective action. In these circumstances, since corrective action was proposed only after the agency report responding to the protest ground, GAO does not consider the corrective action to be prompt. The request is granted.