Link: GAO Opinion
Agency: Department of Labor
Disposition: Request denied
Keywords: Reimbursement of Protest Costs; Corrective Action
General Counsel P.C. Highlight: When an agency takes corrective action following the filing of a GAO protest, protester should be reimbursed its protest costs only if an agency unduly delayed its decision to take corrective action in the face of a clearly meritorious protest.
Distributed Solutions, Inc. (DS) requests that GAO recommend that the firm be reimbursed the costs of filing and pursuing its protest of the terms of a solicitation, issued by the Department of Labor (DOL), for an acquisition management system.
DOL issued a request for information (RFI) seeking market feedback from potential sources to determine whether there were vendors capable of offering a product to satisfy DOL’s general need for a new electronic procurement system. DOL then modified its requirements and issued the solicitation to vendors holding a current Federal Supply Schedule (FSS) contract with the General Services Administration (GSA). In all, DOL issued four amendments to the solicitation. DS raised numerous challenges to the terms of the RFQ. Because the record was unclear, GAO advised the parties that a hearing was likely necessary and requested that the agency further explain its position in response to interrogatories sent by GAO to the parties. The agency advised that it was taking corrective action and GAO dismissed the protest. In this filing, DS requests that GAO recommend that it be reimbursed the reasonable costs of filing and pursuing its protest, including reasonable attorneys’ fees since its protest was clearly meritorious and the corrective action was taken after the agency filed its report.
GAO states that under the Competition in Contracting Act of 1984, GAO may recommend that protest costs be reimbursed only where it finds that an agency’s action violated a procurement statute or regulation. GAO’s Bid Protest Regulations provide that where the contracting agency decides to take corrective action in response to a protest, GAO may recommend that the protester be reimbursed the costs of filing and pursuing its protest, including reasonable attorneys’ fees. This does not mean that costs should be reimbursed in every case in which an agency decides to take corrective action; rather, a protester should be reimbursed its costs where an agency unduly delayed its decision to take corrective action in the face of a clearly meritorious protest. Thus, as a prerequisite to GAO recommending that costs be reimbursed where a protest has been settled by corrective action, not only must the protest have been meritorious, but it also must have been clearly meritorious, i.e., not a close question. A protest is “clearly meritorious” when a reasonable agency inquiry into the protester’s allegations would show facts disclosing the absence of a defensible legal position. The mere fact that an agency decides to take corrective action does not establish that a statute or regulation clearly has been violated.
Here, GAO states that it is not appropriate to recommend that DS recover its protest costs because, even if the corrective action was in response to the protester’s original protest, as it alleges, that protest was not clearly meritorious. Whether the protest was meritorious was not apparent from the record, which is why GAO requested comments from GSA and informed the parties that a hearing was likely needed to complete and clarify the record. The request is denied.