GAO: Where RFP Requirements Clearly Not Met, Protest Costs Reimbursable

As Koprince Law attorneys have discussed in depth, GAO will in some instances award costs for a clearly meritorious protest where an agency does not take corrective action before the due date for the agency report. But what are the standards for a “clearly meritorious” protest?

It’s instructive to look at a recent GAO decision that reviewed protest grounds dealing with past performance evaluation and a requirement that the Army be able to set up the proposed product within 60 seconds.

In HESCO Bastion Ltd., B-415526.3, (April 3, 2018), GAO reviewed a request by HESCO Bastion Ltd. for reasonable costs after it protested an award to JSF Systems, LLC.

Under the RFP, the Army sought HESCO brand name or equal earth-filled barriers conducted under FAR part 12 and part 13. The RFP sought the Lowest Price Technically Acceptable proposal.

Proposals would be rated acceptable or unacceptable based on factors including prior experience and past performance. The prior experience factor required a demonstration of 2 years of experience, within the last 5 years, manufacturing earth-filled barriers for the government. For past performance, offerors had to show details about “recent and relevant contracts for the same or similar items.”

The requested items had to be HESCO brand name or equal earth-filled barriers–CART and RAID configurations, as marketed by HESCO. To be an equal product, both products must be deployed in a maximum of 60 seconds, and the RAID product had to contain “[b]uilt rails inside for easy deployment.”

The Army made award to JSF, finding its proposed products met all requirements. HESCO protested award to JSF.  After initially defending the protest by filing an agency report, the Army took corrective action. HESCO then requested reimbursement of its protest costs.

The basic rule is that GAO can recommend that an agency reimburse protest costs where GAO decides “that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing a protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief.” A clearly meritorious protest is one where, reasonably, the agency had no “defensible legal position.” Normally, corrective action is prompt if taken before the agency report’s due date.

In this case, with respect to whether the protest was clearly meritorious, GAO looked at each of the three protest grounds in turn to see if the agency really had a leg to stand on.

First, HESCO argued JSF did not have the necessary experience where the RFP required at least 2 years of experience within the last 5 years manufacturing earth-filled barriers for the government. The agency report argued that, because JSF had experience with “delivery of earth-filled barriers” and its subcontractor had manufacturing experience, JSF met the requirement. GAO was not persuaded, holding that delivery is not the same as manufacture and the subcontractor certification was expired on its face.

Second, JSF’s past performance did not meet the requirement to provide “detailed information on the contracts” of subcontractors because the proposal didn’t include all required information and the subcontractor’s required certification was expired. Plus, the Army did not evaluate whether past performance for the offeror showed recent and relevant contracts.

Third, with respect to JSF’s proposed products, the Army determined that both the CART and RAID or equal products, which similarly required a maximum 60 second deployment, were evaluated as “[r]apid deployment.” The Army also determined the RAID or equal product had built rails for easy deployment, because the proposal specification sheet described the offered product as “easy to deploy by pulling open, positioning and filling.” GAO held, in a less than shocking result, that “rapid” is not the same as 60 seconds, and “pulling open, positioning, and filling” is not the same as “built rails.”

In sum, then, GAO held that the documents in the Army’s position “did not provide a legally defensible basis for the agency’s position.” GAO recommended the Army reimburse costs to HESCO.

As the HESCO Bastion case demonstrates, “clearly meritorious” is a high (but not impossible) standard to meet. For the protester to recover costs, the agency’s position must be legally indefensible, that is, blatantly wrong.