Protecting sensitive business information, especially pricing, is essential even in the GAO bid protest realm. As an agency found out, even an inadvertent release of such information could lead to a sustained protest.
This slip up resulted in the cancellation of a nearly $1 billion contract. Needless to say, this was a big deal. How did this happen, and what should parties be looking for to protect their confidential data?
For a protester, a corrective action from the agency is a win. It gives the protester another bite at the apple to possibly win a contract award. But for the initial awardee, a corrective action has some unfortunate consequences, the dreaded double whammy.
Besides the obvious–losing the award–the former awardee’s price is usually revealed to the other competitors. Could this give the competitors a leg up when proposals are resubmitted as part of the corrective action? Yes. Does this amount to a flaw in the corrective action such that GAO will sustain a protest over it? Not likely.
Much like schoolyard basketball, bid protests feature a “no
harm, no foul” rule: unless an offeror can credibly allege that it was
prejudiced by a flawed evaluation, GAO won’t sustain a protest.
Establishing prejudice can be tricky, depending on the type
of evaluation at issue. Under a lowest-price technically acceptable award, a
protester generally must show that it was next-in-line for the award (that is, it
was technically acceptable and had the next-lowest price, after the awardee).
Best value awards, on the other hand, are a bit more flexible: usually, the
protester must establish that the evaluation flaw adversely affected its
A recent GAO decision, however, highlights that these two means of establishing prejudice aren’t always distinct.
In a protest before GAO, prejudice is an essential element. Even if GAO might agree that an agency’s action was improper, it will not sustain a protest where the protester would not have received the award anyway.
That’s what happened in the protest of Benaka Inc., B-416836 et al. (Dec. 16, 2018).
Imagine that you’re a manufacturer of appliances, and respond to a solicitation seeking one of your appliances (on a brand name basis). You, of course, propose to provide your appliance. But you lose out on an award to an offeror that submits an offer for a different appliance that admittedly does not comply with the solicitation’s minimum requirements.
In this situation, you’d probably be fairly upset. And as a recent GAO decision acknowledged, you’d likely have a successful basis of protest—that is, if you could establish that you were prejudiced by the government’s award decision, and if you understood what exactly the GAO means by “prejudice.”