We’ve previously written about bid protests being an effective tool for disappointed contractors. In fact, GAO’s most recent bid protest report confirms that a majority of protests are resolved favorably, either through corrective action or sustained decisions.
But what a corrective action might look like depends on the protest issues at hand. GAO recently affirmed that agencies have broad discretion to fashion a corrective action in response to a protest.
By way of background, let’s first discuss what a “corrective action” is. In response to a bid protest, an agency might determine that its evaluation was lacking in a certain respect. If so, it can notify the parties that it intends to take a corrective action that addresses the protest arguments. Though a corrective action usually involves reevaluating proposals and making a new award decision, the scope of the corrective action is usually up to the agency. And, so long as the corrective action addresses the protest issues, GAO generally won’t be concerned with its scope.
A recent GAO decision reaffirms this broad discretion, and shows that offerors may have difficulty challenging the scope of a corrective action through a subsequent protest.
This issue was litigated in Digital Forensic Services, LLC, B-419305.3 (Feb. 25, 2021). That dispute came about after FEMA issued an RFQ through GSA’s e-Buy website, seeking to procure IT security support services under FAR Subpart 8.4. Digital Forensics was performing the services under an 8(a) sole source basis, and the follow-on RFQ was going to be awarded to 8(a) or SDVOSB firms.
After FEMA made an award to a different company, Digital Forensics protested. FEMA then notified GAO that it would take a corrective action by canceling the award and issuing a new solicitation. GAO then dismissed the protest as academic.
Unhappy with FEMA’s decision to resolicit the work, Digital Forensics filed a new GAO protest challenging the corrective action. It argued that the cancellation of the award was “a pretext” to avoid deciding the issue of the original awardee’s acceptability.
FEMA, for its part, argued that the corrective action was entirely appropriate. According to the agency, it had failed to abide by the SBA’s requirements relating to the offer and acceptance of work into the 8(a) Program. Because FEMA did not initially get the SBA’s approval to issue this work as an 8(a) competitive set-aside, the contracting officer decided to cure the issue by canceling the solicitation and proceeding through the appropriate regulatory steps. Moreover, FEMA decided it needed to update the solicitation’s technical requirements.
GAO denied Digital Forensics’ challenge to the corrective action. Doing so, it noted that “[c]ontracting officers have broad discretion to take corrective action where the agency has determined that such action is necessary to ensure fair and impartial competition,” and that the scope of a corrective action is “within the sound discretion and judgment of the contracting agency.”
If a protester alleges that a corrective action is pretextual—as Digital Forensics did—GAO will review the reasonableness of the agency’s decision to cancel a solicitation. “A reasonable basis to cancel exists when, for example, an agency determines that there was a flaw in the procurement, or when the agency determines that a solicitation does not accurately reflect its needs.”
Reviewing the facts of the procurement, GAO found no basis to sustain Digital Forensics’ objections. It considered the opinion of the SBA, which affirmed that FEMA was required (under the regulations then in effect) to get SBA’s approval before issuing the award as an 8(a) acquisition. Thus, FEMA’s decision to cancel and reissue the solicitation to address this flaw was appropriate.
Digital Forensics affirms that GAO will often side with an agency when considering a challenge to corrective action. But this isn’t a hard and fast rule: an agency’s discretion is not unlimited, and the circumstances will determine whether a corrective action is reasonable. Still, offerors have another potential path to challenge a corrective action, through a protest at the Court of Federal Claims.
If you have any questions about bid protests—including a corrective action—please reach out.
GAO Reaffirms Broad Corrective Action Discretion was last modified: March 11th, 2021 by