Protester Missed Its Chance to Protest Corrective Action Scope, Says GAO

As we’ve previously discussed at SmallGovCon, a substantial number of GAO bid protests are resolved through voluntary corrective action. While corrective action is typically a desirable outcome for a bid protest, it by no means affords a protester the opportunity to relax. Indeed, as one offeror recently discovered, the failure to diligently protest the scope of a corrective action barred raising certain challenges later on.

GAO’s decision in CPS Professional Services, LLC d/b/a CATHEXIS, B-417928.2 (Comp. Gen. Feb. 5, 2020), involved a procurement by the VA for project management services to support its logistics program office. CATHEXIS timely submitted a proposal in response to the solicitation.

Following the deadline for proposal submission, the VA amended the solicitation to increase staffing estimates. Offerors were instructed that they could provide revised proposals, but revisions were not required for any volumes that would remain unchanged.

The same day the amendment was issued, the VA also followed up with competitors to assess whether proposal revisions were anticipated. Contractors were advised that proposal revisions would likely have adverse impacts on the evaluation schedule.

In response, CATHEXIS worked with the VA to come up with a strategy for modifying its proposal following the amendment without providing a complete proposal revision. Instead of submitting a revised proposal, CATHEXIS would provide a basis of estimate that would highlight any changes to its proposed approach. CATHEXIS understood the VA to prefer this approach to minimize delay to the evaluation schedule.

CATHEXIS timely provided a basis of estimate to the VA summarizing the changes to its proposal resulting from the revised staffing estimates. Interestingly, all of CATHEXIS’s competitors elected to submit revised proposals, instead.

Roughly three weeks after submitting its basis of estimate, the VA notified CATHEXIS that it had not been selected for award. During its debriefing, CATHEXIS learned that the VA had not evaluated its basis of estimate because the submission exceeded the solicitation’s page limit.

CATHEXIS protested this decision with GAO. In response the VA elected to take corrective action, and requested GAO dismiss the protest. Under the corrective action, the VA would reevaluate proposals—including the basis of estimate supplied by CATHEXIS—then make a new best value determination based on the revised evaluation results.

Based on the VA’s representation that it would be taking corrective action, GAO dismissed CATHEXIS’s protest. It does not appear CATHEXIS objected to the nature of the corrective action or its scope before GAO dismissed the protest.

Following its reevaluation, CATHEXIS was again notified that it was an unsuccessful offeror.

CATHEXIS protested the VA’s award for a second time. This time, CATHEXIS alleged the VA’s corrective action failed to address the material flaws in the prior evaluation. Specifically, CATHEXIS argued it had been discouraged by the VA from submitting proposal revisions. Thus, CATHEXIS argued, the VA’s corrective action should have allowed CATHEXIS to submit a revised proposal.

In response, the VA argued that CATHEXIS’s protest was really a challenge to the scope of the corrective action. Given that it had been more than 10 days since the VA had proposed taking corrective action, the VA argued CATHEXIS’s second protest was untimely.

The VA’s untimeliness argument relies on GAO’s bid protest regulations, which provide specific requirements for protests to be raised. For those interested, these regulations can be found at 4 C.F.R. § 21.2. As relevant here, GAO’s bid protest regulations require that any challenges to the terms of a solicitation be filed prior to the due date set for proposals. In circumstances where new proposals are not requested, however, “any alleged solicitation improprieties must be protested within 10 days of when the alleged impropriety was known or should have been known.” 4 C.F.R. § 21.2(a)(1).

According to the VA, challenging the scope of a corrective action is tantamount to challenging the revised terms of a solicitation. Thus, the VA argued, CATHEXIS had been aware that the corrective action did not anticipate allowing offerors to submit revised proposal submissions when the VA proposed corrective action in the first protest. As the 10-day timeliness window had long since expired, CATHEXIS’s current protest of the corrective action scope was untimely.

GAO agreed with the VA. First, GAO confirmed that, generally, “[a] protest allegation that challenges the ground rules that the agency has announced for performing corrective action and recompetition is analogous to a challenge to the terms of a solicitation and also must be filed prior to the deadline for submitting revised proposals.” CATHEXIS was challenging the scope of the corrective action. But, while CATHEXIS argued the VA’s corrective action had been incomplete, “the protester knew that the agency did not intend to request revised proposals” from the corrective action notice submitted by the VA under the earlier protest.

From this conclusion, the principal question for GAO to resolve was whether CATHEXIS’s protest was timely. Since no revised proposal submissions were anticipated by the VA as part of the proposed corrective action, CATHEXIS would have needed to protest within 10 days of the VA’s proposed corrective action. Since CATHEXIS waited until the VA issued the results of its corrective action—nearly a month after the corrective action was proposed—its protest was untimely. CATHEXIS’s protest was subsequently dismissed by GAO.

CATHEXIS’s protest serves as a stark reminder of how strict GAO’s bid protest deadlines can be. Despite protesting the original evaluation and obtaining corrective action, CATHEXIS’s decision not to challenge the scope of the corrective action within 10 days precluded it from raising the challenge later. GAO’s decision is a sobering reminder of the fact that corrective action does not guarantee an award.