How does GAO review bid protests?

A company official asked the following questions: Now that the General Services Administration's Board of Contract Appeals has lost its bid protest jurisdiction companies are taking a new look at the General Accounting Office as one of the few forums in which they can obtain an independent review of an agency's procurement decisions. How does GAO handle bid protests? How does GAO compare with GSBCA? What standard of review does GAO apply in bid protests?

GAO has been hearing complaints by disappointed offerors on government contracts since about 1925. Until 1984 GAO found the authority to consider bid protests in its general statutory authority to settle the books and accounts of the U.S. government.

However with the passage of the Competition in Contracting Act of 1984 (CICA) GAO was given explicit statutory authority to hear bid protests. The recent legislative amendments have altered some of the timing considerations but have not changed GAO's procedures substantively. The updated version of GAO's bid protest procedures was published in the July 26 1996 Federal Register. See 61 Fed. Reg. 39 039.

In general protests that are based on information available to a party before the initial or a revised due date for proposals must be filed before that date. Otherwise most protests must be filed within 10 calendar days of the date on which the basis of the protest is known or should have been known to the protester.

However there may be special rules that will apply to particular factual situations. Furthermore the timeliness rules for obtaining a suspension of the procurement pending the outcome of the protest are similar but vary slightly from the basic rules for filing a timely protest.

Assuming that the protest is filed within the requisite period for obtaining a suspension of the procurement a suspension will be automatic. This is different from GSBCA where an order from the board was required in order to suspend a procurement. On the other hand GAO itself may decide to override the automatic suspension under certain conditions.

At GSBCA agencies could not override a suspension. If a government agency decides to override a suspension it must notify GAO and the protester. GAO will not review the agency's decision to override. However the protester may obtain independent review of the override decision in federal court.In the early days most GAO protests were analogous to an audit. The outside parties had very limited access to the government's documents and very little insight into GAO's review.

Over the years however the GAO bid protest process has evolved considerably. Today a protester may obtain copies of the competitor's proposals and the government's internal documents pursuant to a protective order governing their disclosure and use just like with GSBCA bid protests.

In addition protesters may obtain discovery from the government by requesting specific documents that are relevant to the issues in dispute. However protesters are not entitled to ask interrogatories or take depositions of other parties' witnesses.

On the other hand the absence of interrogatories and depositions does not mean that an agency may withhold documents or stonewall. If the record is incomplete or contradictory GAO may draw negative inferences against the agency as a result.

GAO Hearings a Rarity

GAO in its sole discretion may decide to hold a hearing on a bid protest in which live testimony may be taken from witnesses. However hearings at GAO are relatively rare.

As GAO stated in Jack Faucett Associates B-254421.3 Aug. 11 1994 94-2 CPD 72:

"Generally we conduct hearings where there is a factual dispute between the parties which cannot be resolved without oral examination of witnesses and which requires us to assess witness credibility or where a protest issue is so complex that proceeding with supplemental written pleadings clearly constitutes a less efficient and burdensome approach than developing the protest record through a hearing."

Before it will sustain a protest GAO must find that the government agency has violated statute or regulation or the terms of the solicitation itself or has otherwise acted unreasonably.

Additionally GAO must find that the violation has "prejudiced" the protester in an appreciable way.

According to GAO in Logitek Inc. B-238773.2 Nov. 19 1990 90-2 CPD 401:

"Generally if our office determines that a solicitation proposed award or award does not comply with statute or regulation (that is where there is a violation of applicable regulations by the agency) our office will presume prejudice and sustain the protest unless we find based on the record that the protester clearly would not have been the successful offeror absent the violation. . . . Stated differently where the agency clearly has violated applicable regulations the reasonable possibility of prejudice is a sufficient basis to sustain the protest."

Whether or not GAO conducts a hearing it is obligated to render its decision within 100 calendar days after the protest is filed.

It is important to note that GAO's decisions are always rendered in the form of "recommendations" to the agency. An agency may choose to disregard GAO's recommendation after appropriate consideration. If an agency decides to disregard a GAO recommendation it must notify GAO and the protester. GAO in turn will inform Congress.

Agency decisions to disregard GAO recommendations are extremely rare. Moreover if an agency does so decide the protester may seek injunctive relief in the federal courts.

No Discovery Process at GAO

The most significant difference between bid protests at GAO and those handled by GSBCA under its expired protest jurisdiction is the inability to obtain discovery from third parties.

At GSBCA a protester who believed that another company had misrepresented its offered products to the government could require that company to produce relevant documents answer interrogatories and provide witnesses to testify in depositions.

Such third-party discovery is essentially unavailable at GAO.

Accordingly any company trying to decide whether to protest GAO must consider carefully how it might prove its case through government documents and its own evidence without the aid of information from third parties.

Peckinpaugh is a member of the government contracts section of the law firm of Winston & Strawn Washington D.C. Contact him at carl@carl.com or by voice mail at (703) 876-5151 extension 2965. This column can also be found on Federal Computer Week's World Wide Web page at www.fcw.com.

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