An Agency’s Broken Promise is Not GAO’s Problem

GAO recently dismissed a challenge to the terms of a solicitation—even though those terms directly contradicted the procuring agency’s promise made during a prior protest of the solicitation. Is that right? Let’s take a look.

Air Resources Helicopters, Inc., B-418317 (Feb. 5, 2020), was a protest to the terms of a Department of Agriculture, U.S. Forest Service, solicitation for helicopter services.

Roughly a year before the subject solicitation, the agency released a similar solicitation that included 10 contract line item numbers (CLINs) for separate host bases and availability periods. Under that solicitation, the agency awarded ten fixed-price indefinite-delivery, indefinite-quantity contracts (one for each CLIN) to several offerors, including Air Resources.

Based on three GAO bid protests to those prior awards, the agency took corrective action and made new awards under the prior solicitation. Five of the new awards were protested, including two that were awarded to Air Resources. In response, the agency took corrective action a second time, agreed to terminate the five protested awards, re-issue the solicitation, and make a new source selection decision.

Though it decided not to reissue the solicitation, the agency terminated both contracts awarded to Air Resources under the prior solicitation. Air Resources protested the termination of its contracts at GAO, arguing that all ten awards should have been terminated (include the five that were not challenged) or none at all.

After Air Resources filed that protest, it received an email from the contracting officer, which said the agency:

(1) would not terminate awards of the five non‑challenged CLINs, but would also not exercise the option periods on those five awarded CLINs; (2) would not rescind the termination of any of the five challenged CLINs awarded (including the two CLINs awarded to Air Resources); and (3) would resolicit for 10 CLINs, as well as certain additional CLINs not previously solicited.

Based on these representations, the agency requested that Air Resources withdrawal its protest. Air Resources agreed and withdrew that protest.

Five months later, the agency issued the new solicitation. This solicitation provided for nine CLINs: four brand new CLINs and the five previously challenged CLINs (but not the five unchallenged CLINs awarded under the prior solicitation). The agency also informed Air Resources that it was in fact planning to exercise the first option periods for the five unchallenged CLINs contracts.

Air Resources subsequently filed the instant protest, challenging the new solicitation’s terms and the agency’s decision to to exercise the option periods on the unchallenged CLINs.

In reaching its decision, GAO said:

Although this protest is ostensibly a challenge to the terms of the [new solicitation], the protester essentially alleges that the agency made representations to induce [it] to withdraw its earlier protest . . . and that the new solicitation . . . breaches those representations by failing to include the five CLINs that were awarded under the earlier solicitation, but were not challenged.

According to GAO, the protester did “not otherwise argue that the terms of the solicitation violate procurement laws or regulations.”

GAO said, “[o]ur role in resolving bid protests is to ensure that the statutory requirements for full and open competition are met.” GAO also cited its regulatory requirements: protests must include a detailed statement of legally and factually sufficient grounds for protest, which must include “either allegations or evidence sufficient, if uncontradicted, to establish the likelihood that the protester will prevail in its claim of improper agency action.”

GAO relied on these regulations and its jurisdictional limits to dismiss the protest for failing to provide a valid basis for challenging the agency’s actions. To the extent the contracting officer’s and protester’s communications established an enforceable agreement, it was “a matter about which [GAO] express[es] no opinion,” and “the agency’s alleged violation of the agreement is not a valid basis of protest.” Per GAO:

Our bid protest jurisdiction is limited to deciding protests concerning an alleged violation of a procurement statute or regulation. Thus, in cases such as this, we will not consider an argument concerning compliance with an agreement except to the extent the protest asserts that an alleged breach resulted in a prejudicial violation of procurement laws or regulations. The protester here has not shown that the agency’s alleged breach of the agreement resulted in a violation of procurement laws or regulations.

Even though the protester challenged the agency’s decision to exercise option periods on the five awarded (previously unchallenged) CLINs, GAO said that the protester failed to “challenge the reasonableness of the agency’s decision to exercise the options.” As such, GAO concluded:

Air Resources’ challenge to the terms of the solicitation is based solely on the fact that the solicitation’s terms are inconsistent with the agency’s prior representations about its prior corrective action. Air Resources’ protest, as filed with our Office, does not include sufficient information to establish the likelihood that the terms of the solicitation violated applicable procurement law or regulations. Accordingly, this protest is dismissed.

So, what can we learn from this decision? Don’t forfeit your right to protest on the basis of a promise, even a promise from the procuring agency. GAO has strict timeliness rules–if you withdraw your protest, you’ll most often lose the ability to try again on the same grounds. As this decision demonstrates, no matter how unfairly a company thinks it was treated, in a situation involving an agency representation like the one described above, GAO is unlikely to sustain a protest.

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