United States: June 2023 Bid Protest Sustain Of The Month

The following is an installment in Crowell & Moring's 2023 Bid Protest Sustain of the Month Series. All through 2023, Crowell's Government Contracts Practice will keep you up to date with a summary of the most notable bid protest sustain decision each month. Below, Crowell Partner Cherie Owen discusses Kupono Gov't Servs., LLC; Akima Sys. Eng'g, LLC, in which GAO sustained a challenge to an agency's corrective action.

June 2023 may go down in history as the month with the highest sustain rate in GAO's history - if GAO published monthly sustain rate data, that is. Although GAO issued a handful of sustained decisions, one of those decisions is likely to drive GAO's "sustain rate" statistic through the roof this year: Systems Plus, Inc. et al., which sustained 98 protests and supplemental protests related to the Chief Information Officer-Solutions and Partners (CIO-SP4) procurement. (In July, GAO issued another decision sustaining 28 additional protests and supplemental protests relating to the same procurement.) While GAO's CIO-SP4 decisions were interesting, they may have allowed an even more impactful sustain decision to slip under the radar.

In Kupono Gov't Servs., LLC; Akima Sys. Eng'g, LLC, GAO issued a rare decision sustaining a challenge to agency corrective action taken in response to a protest. The case began with protests of an award for the management and operation of the Department of Energy's national training center. These initial protests raised a variety of challenges to the agency's evaluation of cost and non-cost proposals; the adequacy of discussions; and the reasonableness of the source selection decision. In response to the protest, DOE notified GAO that it planned to take corrective action by soliciting and evaluating revised cost proposals; reviewing other areas of the evaluation and addressing issues as appropriate; and making a new source selection decision. GAO dismissed the initial protests as academic.

Shortly after these protests were dismissed Kupono filed a new protest challenging the agency's planned corrective action. A few weeks later, the agency issued letters to the offerors that more specifically described the planned corrective action and set a date for submitting revised cost proposals. Another offeror, Akima, then filed a protest challenging the propriety of the agency's proposed corrective action. Both protesters argued that their cost and technical proposals were inextricably intertwined and therefore, the agency's decision to limit the scope of corrective action to the submission of revised cost proposals was improper. GAO agreed.

First, GAO noted that, while agencies may sometimes limit the revisions offerors may make to their proposals during corrective action, an agency cannot prohibit the revision of aspects of a proposal that are materially impacted by the agency's corrective action. Second, GAO found that the agency had failed to explain what procurement flaws it was attempting to remedy during corrective action. As GAO explained:

[W]e cannot tell from the record what concern or concerns prompted the agency to take corrective action. It necessarily follows that, if we cannot tell what the concerns were that gave rise to the agency's decision to take corrective action, we also cannot tell whether the proposed corrective action is appropriate to remedy the unidentified concerns . . ."

Third, GAO noted that the protesters had demonstrated that changes to their cost proposals would necessarily impact their technical approaches. Indeed, GAO observed that the agency's own discussions with offerors demonstrated the intertwined nature of the firms' cost and technical proposals - the agency had asked both firms cost-related questions based entirely on their proposed technical approaches to staffing the contract.

Based on all of these considerations, GAO concluded that the agency's decision to limit corrective action proposal revisions was unsupported. In sustaining the protest, GAO recommended that the agency allow offerors to revise any aspect of their proposals. In the alternative, if the agency chooses to limit revisions to costs proposals, it must also permit offerors to revise any aspect of their proposals impacted by changes to the cost proposals.

Successful corrective action challenges at GAO are fairly rare because GAO affords significant deference to agency discretion in the context of corrective action. However, GAO does, on occasion, conclude that the scope of corrective action is too limited, as it did in Kupono Gov't Servs., LLC. However, companies thinking of challenging the scope of corrective action as too limited - and particularly those thinking of challenging the scope as too broad - should consult with protest counsel to analyze which protest forum - GAO or the Court of Federal Claims - is the best forum in which to bring their particular arguments.

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