Protest of Proposed Corrective Action Premature, Says GAO

When an agency takes corrective action in response to a bid protest, the agency voluntarily agrees to do something (such as re-evaluate proposals, re-open discussions, or even cancel a solicitation) to address the alleged problems identified in the protest. Corrective actions are quite common: in FY 2016, more than 23% of GAO bid protests resulted in corrective actions.

But what happens when a protester doesn’t like the scope of the agency’s proposed corrective action? As a recent GAO decision demonstrates, corrective actions can themselves be protested–but challenging an agency’s corrective action can be an uphill battle.

Booz Allen Hamilton, Inc., B-414822.5 (Oct. 13, 2017) involved a protest over a GSA procurement for support services requested by the Army Research, Development and Engineering Command, Software Engineering Directorate. Raytheon was named the apparent successful offeror for a task order award, which Booz Allen Hamilton, Inc. protested, alleging that Raytheon had an unmitigated organizational conflict of interest, and that there were issues with the evaluation of price and technical proposals.

The parties subsequently engaged in outcome prediction alternative dispute resolution, where GAO indicated it was likely to sustain the protest. GSA then took corrective action.  GSA filed a notice of corrective action with GAO, which explained its proposed actions as follows:

GSA intends to review the scope of its analysis of Organizational Conflicts of Interest (OCI) and correct and/or supplement that analysis and/or take other action as it deems necessary to ensure the OCI analysis sufficiently addresses the impaired objectivity OCI concerns or otherwise satisfies the Federal Acquisition Regulation subpart 9.5.

GSA also indicated that it would review the evaluation record to ensure Raytheon and BAH were evaluated equally. In the event of discrepancies, GSA would re-evaluate proposals and make a new best value determination.

BAH objected to the proposed corrective action, arguing that it “did not provide adequate details and does not commit the agency to resolve the issues raised by the protester.” GAO nevertheless dismissed the protest as academic. GAO did advise BAH that if it was dissatisfied with the results of the corrective action, it could file another protest.

Three days after GAO’s dismissal, BAH filed a protest with GAO, challenging the terms of the corrective action. Specifically, BAH took issue with GSA’s repeated use of “and/or” within its proposed corrective action and the fact that GSA stated it would “take other action as it deems necessary [.]”According to BAH, these broad statements did not commit GSA to any specific corrective action.

GAO did not agree. As GAO explained, the legal standard for protesting a corrective action is high:

As a general rule, agencies have broad discretion to take corrective action where the agency has determined that such action is necessary to ensure fair and impartial competition. An agency’s corrective action need not address every protest issue, but must render the protest academic by granting the requested relief. The details of implementing the corrective action are within the sound discretion and judgment of the contracting agency, and we will not object to any particular corrective action, so long as it is appropriate to remedy the concern that caused the agency to take corrective action.

In the context of BAH’s protest, GAO was satisfied by GSA’s proposed corrective action. As GAO explained, “we do not interpret GSA’s statement that it may take ‘other action as it deems necessary’ to mean that the agency could elect to utterly ignore the OCI and technical evaluation issues identified in the agency’s notice.” Moreover, GAO concluded BAH’s arguments “merely anticipate adverse actions by the agency,” which were speculative. Accordingly, GAO dismissed BAH’s protest as premature.

Interestingly, the Court of Federal Claims has occasionally applied greater scrutiny to proposed corrective actions than is typically the case at GAO. For example, in Dell Federal Systems, L.P. v. United States, 133 Fed. Cl. 92 (2017), the Court enjoined a proposed corrective action, writing that the agency’s proposed actions amounted to a “blunderbuss approach to corrective action that neither the record nor the law supports.” While the Court, too, is largely deferential to agencies in this area, the Court may nonetheless be the better bet for an offeror challenging a corrective action.

So what is the takeaway for protesters? In short, GAO affords agencies wide discretion to craft and implement corrective actions as they see fit, and challenges to corrective action before GAO are likely to be dismissed as premature. Accordingly, protesters may win the protest battle only to lose the protest war during corrective action. Moreover, protesters concerned with a proposed corrective action may wish to consider taking the challenge to the (potentially) more receptive ears of the Court of Federal Claims.