Inadvertent Release of Incumbent Pricing Data Leads to Sustained Protest

Protecting sensitive business information, especially pricing, is essential even in the GAO bid protest realm. As an agency found out, even an inadvertent release of such information could lead to a sustained protest.

This slip up resulted in the cancellation of a nearly $1 billion contract. Needless to say, this was a big deal. How did this happen, and what should parties be looking for to protect their confidential data?

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It’s Tough to Challenge a Corrective Action

For a protester, a corrective action from the agency is a win. It gives the protester another bite at the apple to possibly win a contract award. But for the initial awardee, a corrective action has some unfortunate consequences, the dreaded double whammy.

Besides the obvious–losing the award–the former awardee’s price is usually revealed to the other competitors. Could this give the competitors a leg up when proposals are resubmitted as part of the corrective action? Yes. Does this amount to a flaw in the corrective action such that GAO will sustain a protest over it? Not likely.

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GAO: If You Weren’t Prejudiced, We Won’t Sustain Your Protest

Much like schoolyard basketball, bid protests feature a “no harm, no foul” rule: unless an offeror can credibly allege that it was prejudiced by a flawed evaluation, GAO won’t sustain a protest.

Establishing prejudice can be tricky, depending on the type of evaluation at issue. Under a lowest-price technically acceptable award, a protester generally must show that it was next-in-line for the award (that is, it was technically acceptable and had the next-lowest price, after the awardee). Best value awards, on the other hand, are a bit more flexible: usually, the protester must establish that the evaluation flaw adversely affected its competitive standing.

A recent GAO decision, however, highlights that these two means of establishing prejudice aren’t always distinct.

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GAO Dismisses Protest Where Proposal was Unacceptable

In a protest before GAO, prejudice is an essential element. Even if GAO might agree that an agency’s action was improper, it will not sustain a protest where the protester would not have received the award anyway.

That’s what happened in the protest of Benaka Inc., B-416836 et al. (Dec. 16, 2018).

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GAO: Failure To Explain Prejudice Doomed Otherwise Successful Protest

Imagine that you’re a manufacturer of appliances, and respond to a solicitation seeking one of your appliances (on a brand name basis). You, of course, propose to provide your appliance. But you lose out on an award to an offeror that submits an offer for a different appliance that admittedly does not comply with the solicitation’s minimum requirements.

In this situation, you’d probably be fairly upset. And as a recent GAO decision acknowledged, you’d likely have a successful basis of protest—that is, if you could establish that you were prejudiced by the government’s award decision, and if you understood what exactly the GAO means by “prejudice.”

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