Link: GAO Decision
Protestor: URS Federal Services, Inc.
Agency: Internal Revenue Service
Disposition: Request Granted in Part, Denied in Part.
GAO will recommend that agency reimburse protester for the costs of filing and pursuing its protest, where the agency did not take corrective action in response to the protest until after the submission of the agency report and the protester’s comments, and the protest was clearly meritorious.
General Counsel PC Highlight:
URS Federal Services, Inc. requested that the GAO recommend that it be reimbursed the costs of filing and pursuing its protest challenging the award to VSE Corporation of a contract for seized and forfeited personal property management and disposition services. In its supplemental protest, URS had alleged that the agency had unreasonably failed to recognize that VSE was technically unacceptable and/or a not responsible offeror because of its proposed use of the Flynn Jensen Company (FJC), an allegedly debarred subcontractor due to its ties to Manheim Auctions Government Services, LLC (MAGS). The agency denied that FJC was debarred in its supplemental agency report, in response to which URS pointed out that VSE’s proposal repeatedly characterized FJC as nothing more than the new name for MAGS, in fact a debarred subcontractor, and attributed MAGS’ past performance to FJC. On the eve of a hearing regarding specific protest issues, the agency agreed to take corrective action by terminating award to VSE.
While the GAO generally does not regard a protest as clearly meritorious where resolution of the protest requires further development, such as through a hearing, the GAO found URS’s argument regarding the agency’s evaluation of VSE’s proposal with regard to its use of FJC as a subcontractor to be clearly meritorious. The GAO then determined, however, that the remaining protest issues argued by URS were clearly severable from the subcontractor challenges. The GAO therefore only recommended that URS be reimbursed the costs of filing and pursuing its protest with respect to its subcontractor challenge.
Corrective action by the agency will not always lead to a valid claim for reimbursement for the costs of pursuing a protest. The GAO will only recommend reimbursement if the agency unduly delays taking corrective action in the face of a clearly meritorious protest. If the agency takes corrective action based on a single issue, and the other issues argued by the protestor are clearly severable, the protestor may only be reimbursed for the costs relating to that single issue. No matter what the outcome, however, protestors should always maintain detailed records of the costs of the protest, broken down by individual issues pursued, to be prepared if the protestor does seek reimbursement.