Business and Legal Insights

Clients competing for federal contracts often ask me whether or not they should file a bid protest when they don’t have a “slam dunk” argument. I’ve said it before, and I’ll say it again—the key to winning a bid protest is to show a competitor’s proposal failed to meet specific Request For Proposal (“RFP”) criteria, or that the agency did not follow a specific provision of the RFP. However, as recently shown in Kratos Defense & Rocket Support Services, Inc., B-413143.2 (Comp. Gen. Aug. 23, 2016), in the federal arena it is not always possible to know why an award was wrongful until after a protest is filed.

Kratos was a procurement for the Navy involving systems engineering, design, and technical direction agent engineering, configuration management, and logistics support services. The RFP specifically provided that at least 90% of the work had to be performed at government facilities requiring security clearance, and that only 10% of the work could be performed at an alternative site. The RFP also specifically provided that no government work space would be provided by the government at its facilities, and did not identify any equipment that the government would provide to the selected contractor.  Offerors were required to provide their labor rates for work performed on government sites, and at their non-government or alternative sites.

The Navy selected URS for award for $51.5MM, even though its proposal stated: “For Government/Client site rates, URS assumes that the Government/Client will provide working space, computers and telephones for the proposed staff at no cost to URS in order to use the Government/Client site rates.” (emphasis added). Kratos – whose price was $62MM – initially protested on several grounds, and the GAO specifically stated that those protests had “no merit.” However, after its outside counsel* received the agency report – which included URS’s proposal – Kratos supplemented its protest by asserting that URS took exceptions to the RFP’s requirement that offerors provide their own workspace and equipment at government sites and should have been rejected as technically unacceptable. The GAO agreed and, on the basis of a single sentence in URS’s proposal, overturned the $51.5MM award to URS, and recommended that the Navy reimburse Kratos its reasonable attorneys’ fees and costs incurred in filing and pursuing its protest.

The point is that you never know what you will find when you receive an agency report. No one should ever file a frivolous protest, but firms that do not initially have the strongest cases can and do prevail based on information that can only be obtained after protesting. Furthermore, if the agency report shows that the award was proper, the protest can be withdrawn without penalty. This is why, in general, I advise clients with non-frivolous claims they should protest if the contract is valuable enough.

*Who was admitted under the GAO’s protective order.

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