Why Failing To Intervene In A Bid Protest Could Have Dire Consequences

December 6, 2017

By Samuel S. Finnerty

Imagine that your company has just been awarded a contract after spending significant time and resources identifying a federal business opportunity and developing a winning proposal. Now imagine that just as you are preparing to perform that contract a bid protest is filed by an interested party (e.g., a disappointed competitor). Depending on the facts of the case, you may be inclined to sit back and let the protest play out. No doubt, such a tactic would save the company money in the short-term. However, if the protest has been filed at the Government Accountability Office (“GAO”) or the Court of Federal Claims (“COFC”), your company should not only consider the benefits of intervening, but also the risks associated with failing to do so.  
 
By intervening in a bid protest an awardee can better protect its interests. For example, an intervenor can: (1) track the protest and related filings; (2) participate in decisions affecting the release of its proprietary information (i.e., redactions); and (3) assist the agency in defending its award decision. These benefits alone make intervention an appealing option. There is, however, a more subtle and significant reason why an awardee should consider intervention.  
 
As any experienced government contractor knows, there is always a chance that instead of defending its award decision in a protest, a procuring agency will take corrective action, which could result in the contract being awarded to a different company. Such an outcome might prompt the original awardee to file a protest of its own, challenging the agency’s new award decision. However, as the COFC recently announced in Sonoran Tech. & Prof'l Servs., LLC v. United States, the original awardee’s ability to do so may hinge on whether it intervened or at least kept tabs on the preceding protest that resulted in corrective action.
 
In that case, the Air Force originally awarded a courseware development and training contract to Sonoran. Thereafter, Spectre Pursuit Group LLC (“Spectre”), a disappointed offeror, protested the award at the GAO, which was dismissed, and then at the COFC, challenging the Air Force’s determination that Spectre was ineligible for award. The Air Force took corrective action in response to Spectre’s COFC protest and referred the issue of Spectre’s responsibility to the Small Business Administration (“SBA”).  Due to corrective action being taken, the COFC dismissed Spectre’s protest.  
 
Subsequently, the SBA notified the Air Force that it would not make a responsibility determination for Spectre because Sonoran was already performing the contract. As a result, Spectre filed another protest at the COFC, this time challenging SBA’s failure to make a responsibility determination. Citing “unique circumstances,” SBA ultimately rendered a responsibility determination for Spectre, which, after the Air Force took corrective action, resulted in Spectre being awarded the contract. Notably, Sonoran did not intervene in any of Spectre’s protests.  
 
After its contract was terminated and award was made to Spectre, Sonoran filed a protest at the COFC challenging the terms of the solicitation and the Air Force’s corrective action. The Air Force argued that Sonoran’s protest should be dismissed as untimely. The COFC agreed. 
 
More specifically, the Court held that Sonoran had missed its opportunity to fairly challenge the terms of the solicitation or the agency’s corrective action. Generally speaking, the COFC will dismiss a protest as untimely if the protestor had an opportunity to raise its claims before the award of the contract but failed to do so. The Court explained that Sonoran had both ample notice of the corrective action and time (roughly two months) to challenge it before the agency awarded the contract to Spectre. As it relates here, the Court was particularly critical of Sonoran’s failure to intervene in Spectre’s protests, noting that, had it intervened, Sonoran surely would have learned of the proposed corrective action and could have protested such action before a new award decision was rendered. Its failure to do was “beyond the Court’s comprehension[.]”  
 
In addition, the Court held that Sonoran had notice of the corrective action because the Air Force’s notice of intent to take corrective action and the COFC’s subsequent dismissal of Spectre’s first protest were publicly available on PACER, an online court record depository. This information was accessible to Sonoran approximately two months before Spectre was awarded the contract. Accordingly, the Court held that Sonoran had ample opportunity to file a protest from the time it should have learned of the proposed corrective action and “was not permitted to wait for the Air Force to complete the corrective action to see if its award was upheld.”
 
This case is significant because it allows the Court to impose a broad constructive knowledge standard when determining whether a protestor’s claims are timely, which may include imputing a protestor with knowledge it could have learned through intervention. It is, however, important to note that although Sonoran may have significant consequences in the protest arena, it only applies to protests filed at the COFC—not the GAO. That being said, since both protest forums utilize a constructive knowledge standard when deciding whether a protest is timely, the GAO may be similarly critical of a protestor’s failure to intervene. Indeed, much like the COFC, timeliness for a GAO protest hinges on when the protestor knew or should have known the basis of protest.  
 
In short, if your company’s award is protested, you should strongly consider intervening in the protest. Intervention will allow you to keep an eye on your investment (in this case a hard earned government contract) and will help you identify and raise potential protest grounds as they arise—which is particularly important after Sonoran.  
 
Whether you are filing a protest or considering intervention, the attorneys at PilieroMazza are prepared to help you with all your protest needs.

About the Author: Sam Finnerty is an associate with PilieroMazza in the Government Contracts Group. He may be reached at sfinnerty@pilieromazza.com.
 
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