Imagine you’ve submitted a bid for a procurement that you believe your company is a shoo-in for. Nobody comes close to the experience and skills your company brings to the table. A while later, you learn that the new company down the street was awarded the contract. There clearly must be a mistake. The awardee doesn’t have half the experience your company has in this industry. Feeling wronged, you decide to file a bid protest questioning the award at the Government Accountability Office (GAO).
Your lawyer informs you that a bid protest may be dismissed if the protester doesn’t qualify as an interested party. But you were an actual bidder who should have been awarded the contract. Of course you’re an interested party—right?
It’s common to assume an unsuccessful offeror automatically qualifies as an interested party. However, not just any unsuccessful offeror is an interested party in the eyes of GAO.
An “interested party” is “an actual or prospective offeror whose direct economic interests would be affected by the award of a contract or the failure to award a contract.” 4 C.F.R. § 21.0(a)(1).
For a protest challenging the terms of a solicitation, GAO has stated, “an interested party is generally a potential bidder for the contract.” This is a pretty easy standard to meet. Alternatively, when challenging a contract award, “an interested party is generally an actual bidder that did not win the contract.”
Other important factors could include the bidder’s standing in the competition, or the nature of the issues being raised. For the basics, we’ll focus on an interested party in a solicitation-terms protest versus a post-award protest.
Protest of Solicitation Terms
A solicitation-terms protest is also called a pre-award protest. To challenge solicitation terms, a prospective bidder is an interested party if the bidder has expressed interest in competing and has a direct economic interest. Typically, the prospective or actual bidder must be eligible for award. The most common reason for filing a pre-award protest is to challenge the solicitation’s terms. (learn more here Why File: A GAO Pre-Award Protest).
When filing a GAO bid protest, “a protester is not an interested party to challenge the terms of a solicitation, even if the protest is sustained, if it is clear that the protester will be ineligible for award under the remaining terms of the solicitation.” DGCI Corp., B-418494 (Comp. Gen. Apr. 27, 2020).
The protester must be eligible to compete for the award. This doesn’t mean the protester must be eligible on the terms they are protesting. Rather, the protester must be eligible under the remaining solicitation terms.
Scenario One: ABC Company is bidding on a procurement. The solicitation calls for a specific license that is not normally required under this type of contract. ABC Company does not have the specific license required in the solicitation but is eligible under all the other requirements. Believing the licensing terms are overly restrictive and outside of industry norms, ABC Company files a pre-award protest.
Here, the terms being protested are the reason ABC Company is not eligible for award. If ABC Company is successful and the licensing is no longer required, then ABC Company is eligible for award under the remaining terms.
Scenario Two: Alternatively, the same ABC Company files a pre-award protest on different grounds, failing to include in its argument that the licensing terms are restrictive. GAO will likely find that ABC Company is not an interested party because even if the protest is sustained, ABC Company does not have the required license to be eligible for award.
A Post-Award Protest
There’s the saying that “If you’re not first, you’re last.” But when filing a post-award protest, your place in line matters. For a post-award protest, an interested party is an actual bidder or offeror with a direct economic interest. This is typically a bidder that was not awarded the contract or was eliminated from the competition.
GAO has “generally found that a protester is an interested party to challenge an agency’s evaluation of proposals only where there is a reasonable possibility that the protester would be next in line for award if its protest were sustained.”
Even if the protester was an unsuccessful offeror under a specific procurement, GAO will not view the unsuccessful offeror as an interested party unless there is a reasonable chance the protester will be the awardee if the protest is sustained. When there are higher-ranked intervening offerors, the protester will have to attempt to demonstrate to GAO that they qualify as an interested party.
Scenario: ABC Company was the unsuccessful offeror of a procurement and believes the agency deviated from the stated evaluation criteria when making the award.
If ABC Company was the “next-in-line” for award, then ABC Company is likely an interested party. ABC Company has a direct economic interest if the protest is sustained because there is a reasonably chance that ABC Company will receive the award.
If ABC Company was a high-priced bidder that was not next-in-line for award, ABC Company must demonstrate that all the lower-priced bidders are ineligible for award for ABC Company to qualify as an interested party. Or it must demonstrate that the overall evaluation criteria, if applied correctly, could have resulted in award. For instance, if it was a lowest-price technically acceptable procurement, then a protester likely has to show that its price evaluation was incorrect, and correcting the price evaluation would have vaulted the protester to the first place in line in terms of pricing.
Another factor GAO will consider is the remedy the protester is seeking. For example, if an actual bidder files a protest on the grounds that the agency improperly removed the bidder from competition, GAO may find the bidder is an interested party if the bidder would have the opportunity to compete again were the protest sustained.
Note that interested party status is often determined at the front end of a protest. So, the initial protest must contain information or allegations sufficient to demonstrate that the protester is an interested party.
Knowing who qualifies as an interested party in a GAO bid protest is an important consideration to keep in mind when deciding whether filing a bid protest is for you.
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