GAO: Conversion of Sealed Bid to Negotiated Procurement Doesn’t Cure Untimely Protest

As seasoned government contractors know, an impropriety in a solicitation’s terms must be protested before the deadline to submit an offer. If the protest is submitted after the solicitation’s response deadline, the protest will be dismissed as untimely.

GAO recently held that this rule holds true when an agency converts a sealed bid (under FAR part 14) to a negotiated procurement (under FAR part 15).

In Cashman Dredging & Marine Contracting Company, LLC, B-417213.3 et al. (July 19, 2019), Cashman filed a pre-award protest challenging the adequacy of information provided under the solicitation. The Army Corps of Engineers sought a contractor to dredge approximately 11 million cubic yards of material from the Charleston Lower Harbor Channel and the Wando River, in South Carolina.

As originally issued in September 2018, the solicitation sought the submission of sealed bids under FAR part 14. The Corps included in the solicitation certain geotechnical information relating to the material to be dredged. But during the course of bidding, one offeror asked the Corps for permission to conduct its own dredging samples to help inform its bid; the Corps assented to this request, provided that all appropriate permissions and permit were received.

Five offerors, including Cashman, submitted bids prior to the solicitation’s November 1, 2018 bid opening. Each bid, however, exceeded the government’s independent estimate. After further discussions with offerors and revisions to the government’s estimate, however, the contracting officer determined that all bids remained unreasonably high. So on December 11, the contracting officer converted the solicitation from an invitation for bids (under FAR part 14) to a negotiated procurement (under FAR part 15).

After a brief lull in the acquisition due to a separate GAO protest, the Corps set April 17, 2019 as the deadline for the submission of proposals. It then responded to a request from Cashman—made a couple of weeks prior—to provide additional information about how to receive permission from the local Charleston office to perform test digs. On April 10, the Charleston office informed Cashman that permits could take months to approve, so Cashman asked for additional time to submit its bid. When this request was denied, Cashman filed a pre-award protest, on April 12, challenging the solicitation’s terms.

Specifically, Cashman alleged that the solicitation did not provide sufficient geotechnical data, and that the Corps did not accommodate Cashman’s request to perform a test dig.

In response, the Corps moved to dismiss Cashman’s argument as untimely. According to the Corps, the supposed lack of geotechnical data was apparent under the original solicitation (issued under FAR part 14, in 2018); thus, Cashman should have protested this flaw in the solicitation prior to the November 1, 2018 bid opening.

GAO agreed with the Corps. Doing so, GAO restated a familiar requirement: protests challenging the terms of a solicitation must be filed prior to the solicitation’s response deadline. Moreover, GAO noted that “where a subsequent amendment to a solicitation does not alter the basis of protest, a protester is required to challenge that solicitation impropriety prior to the time set for receipt of initial proposals.” In other words, a solicitation amendment doesn’t change the proposal deadline unless the amendment affects the protest arguments.

Under this framework, GAO rejected Cashman’s assertion that the conversion of the solicitation from an invitation for bid to a negotiated procurement altered the nature of the protest. The supposed flaw in the solicitation—the lack of sufficient geotechnical data—existed prior to the initial response deadline (the November 1, 2018 bid opening). Cashman did not protest the solicitation prior to that date, and nothing that occurred after it materially changed the nature or type of work in any way. The conversion of the solicitation from FAR part 14 to FAR part 15 did not change the deadline to protest the supposed flaw.

GAO dismissed Cashman’s April 12, 2019 protest as untimely. Instead, Cashman should have filed its protest no later than November 1, 2018.

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Protests challenging the terms of a solicitation can be an effective acquisition tool, as they might clarify requirements or even result in solicitation changes that are favorable to bidders. But these protests have unique filing deadlines. And as Cashman demonstrates, a late protest will be dismissed as untimely—and might prevent a company from being competitive.

If you have questions about pre-award bid protests, please give me a call.