“Deemed Withdrawal” of Agency-Level Protest Sinks Subsequent GAO Protest

Readers of this blog will know that the GAO interprets its protest timeliness rules quite strictly. A recent GAO case provides us with an opportunity to review a nuanced piece of those timeliness rules. Specifically, how withdrawal of an agency-level protest affects the deadline to file a GAO protest, and what counts as a withdrawal of an agency-level protest versus an “initial adverse agency action.”

In this case, the protester lost its GAO protest rights by trying to pursue its agency-level protest with an inspector general’s office rather than with the contracting officer.

The GAO’s decision in Aurora Storage Products, Inc., B-415628 (Comp. Gen. Dec 1, 2017) involved a DOJ solicitation for high density file systems. The solicitation was issued as a competitive task order RFQ open to holders of a certain GSA Schedule.

Mid-Atlantic Filing Distributors submitted a quotation. The DOJ rejected it because Mid-Atlantic did not hold the underlying GSA Schedule contract.  However, according to Mid-Atlantic, it was the “authorized GSA dealer” for Aurora Storage Products, Inc.–which did hold the correct GSA Schedule. Aurora said that Mid-Atlantic had submitted the quotation on Aurora’s behalf.

Aurora was informed of the award to another company on October 10. Aurora filed a timely agency-level protest with the contracting officer on October 13.  (All the dates mentioned were in 2017). The CO acknowledged the protest on October 17. At this point, things were going alright, at least procedurally.

Then Aurora made a mistake. In response to the CO’s acknowledgment of the agency-level protest, Aurora sent an email stating “[t]hank you for your acknowledgment but I have forwarded basically the same request to the [Office of the Inspector General (OIG)].” The email responses also explained that Aurora was not withdrawing its protest, but rather that “[w]e are protesting through the Department of Justice OIG.  We do not expect a review from you personally but rather from your OIG.”

The CO wrote back to Aurora on October 24 to clarify that “OIG does not typically review and handle protests,” OIG “may decline to consider your allegations at all, and may or may not inform you of this decision,” and to “[p]lease confirm that you nevertheless still do not want a written decision from me but instead wish to pursue this through the OIG.” Aurora responded on October 25:  “we do not wish to withdraw our protest,” but also stated that “a review by the [c]ontracting [o]fficer, while advisable internally would be of little use to those protesting.  More directly, it is your actions and decisions that we are protesting.”

The GAO doesn’t mention what happened over the next few days, but apparently Aurora decided to file a formal bid protest while awaiting a potential response from the OIG. Aurora filed its GAO protest on October 30.

GAO timeliness rules mandate that

a protest based on other than alleged improprieties in a solicitation must be filed no later than 10 calendar days after the protester knew, or should have known, of the basis for protest, whichever is earlier.  4 C.F.R. § 21.2(a)(2). Where a protest first has been filed with a contracting activity, any subsequent protest to our Office, to be considered timely, must be filed within 10 calendar days of “actual or constructive knowledge of initial adverse agency action.”  4 C.F.R. § 21.2(a)(3).  The term “adverse agency action” means any action or inaction on the part of a contracting agency that is prejudicial to the position taken in a protest filed there.  4 C.F.R. § 21.0(e).

GAO wrote, as it often does, that its bid protest regulations “contain strict rules for the timely submission of protests.”  In this respect, the GAO’s rules “reflect the dual requirements of giving parties a fair opportunity to present their cases and resolving protests expeditiously without unduly disrupting or delaying the procurement process.”

GAO held that, since the protest was filed on October 30, it was untimely because this was 20 days after the protester knew of the award decision on October 10, well past the 10-day deadline.

But what of the agency-level protest Aurora filed? Normally, filing of an agency-level protest would stop the clock on the GAO protest deadlines until the “knowledge of initial adverse agency action,” as mentioned above.

Here, however, GAO held that Aurora had effectively “disavowed its protest by repeatedly stating that it was not seeking a decision from the contracting officer and instead wanted the OIG to review its allegations.  These statements clearly indicate that Aurora did not wish the agency to decide its protest in accordance with the procedures set forth in FAR § 33.103,” which indicates agency-level protests are handled by the contracting officer. “In our view,” GAO continued, “these disavowals constituted a constructive withdrawal of Aurora’s agency-level protest since the protester indicated it no longer wished for a decision under the auspices of FAR § 33.103.”

Furthermore, “the OIG’s review of, and investigation into, the allegations raised by Aurora is not a ‘protest’ as that term is understood under FAR § 33.103 and our Bid Protest Regulations. Thus, the ultimate action taken by the OIG, whether adverse to Aurora or not, will be separate and apart from the DOJ’s handling of Aurora’s agency-level protest.”

Finally, a withdrawal of an agency-level protest is not an adverse agency action because a withdrawal “is an action taken by the protester, not the agency, and therefore, even if the result is ultimately prejudicial to the protester’s position, it does not constitute an adverse agency action.”

Because there was no “adverse agency action,” Aurora never got its additional 10-day clock to file a GAO protest that would normally start running after the conclusion of the agency-level protest. Therefore, the 10-day clock started running from notice of the award, and Aurora missed this deadline.

GAO dismissed the protest as untimely.

As I mentioned earlier, my colleagues have discussed the GAO’s strict timeliness rules in a number of contexts, including when an electronic proposal is received by a government server, where an offeror failed to request a pre-award debriefing, and in determining when the 5:30 pm filing deadline actually ends. While a few of these decisions go the protester’s way, most do not. When the GAO says its timeliness rules are “strict,” it isn’t kidding.

This decision is another important twist on GAO timeliness rules, here in the context of a GAO protest filed after an agency-level protest. As Aurora Storage Products demonstrates, an agency-level protest is a protest filed with the contracting officer under the provisions of FAR 33.103, not a complaint filed with an inspector general, ombudsman, or some other official. There is no exception to the strict GAO timeliness rules based on complaints made to inspectors general and the like.

Further, when an agency-level protest is filed, if a bidder takes an action that seems like it is withdrawing the agency-level protest (even without explicitly using the word “withdraw”), the bidder can lose the additional window to file the GAO protest that normally runs after receiving an adverse agency action on the agency-level protest. Here, Aurora even explicitly stated that it didn’t wish to withdraw its protest–but contradicted itself by also stating that it didn’t want the contracting officer to issue a decision. That was enough to constitute a “deemed withdrawal.”

The GAO’s bid protest timeliness rules are complex and strict. Bidders should be aware of the interplay of the timing rules for agency-level and GAO protests and adhere to them closely.

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