BLOG: An Agency's Corrective Action Decision Is Not Immune to Protest—What Does It Take to Win?

April 19, 2019

By Michelle E. Litteken
Practice Area: Government Contracts Law

Corrective action is a common outcome of a bid protest. Indeed, the U.S. Government Accountability Office (GAO) reported that 29% of the protests filed in FY 2018 resulted in corrective action. If you are a protester, that may be great news. In the case of a post-award protest, it likely means that you have another shot at award. However, if you are an intervenor, it means the agency chose not to defend your award, and you could lose the contract. What can an intervenor do?

Because an agency’s decision to take corrective action is an action made in connection with a procurement or a proposed procurement, it may be protested by any adversely affected party. While it is possible to protest a corrective action decision, the U.S. Court of Appeals for the Federal Circuit’s decision in Dell Federal Systems, L.P. v. United States, Fed. Cir. Nos. 2017-2516, 2017-2535 & 2017-2554 (Oct. 5, 2018), dashed the hopes of potential protesters by holding that a corrective action need not be “narrowly targeted” to correct a procurement defect. Rather, the Federal Circuit held that an agency is only required to have a rational basis for its corrective action decision—a relatively low bar to meet.

A recent decision from GAO shows hope is not lost and that it is possible to successfully challenge an agency’s decision to take corrective action. In NavQSys, LLC, B-417028.3 (Mar. 27, 2019), the agency initially selected a small business joint venture for award. The solicitation required the offeror to have a valid top secret facility clearance, and both members of the joint venture had clearances. A protester challenged the award, arguing that the joint venture itself must have a clearance. The agency responded by taking corrective action. Specifically, it would terminate the contract and make a new award to the protester. The joint venture filed a protest, challenging the corrective action.

In its protest of the corrective action, the joint venture argued that the agency’s decision was unreasonable and inadequately documented. The agency defended its decision, contending that the joint venture was ineligible to compete under the terms of the solicitation. GAO rejected the agency’s position because the only documentation supporting the corrective action decision was a single email from a division chief within the agency and the corrective action notice. Notably, when GAO asked the agency to supplement the record with any other documents relating to the agency’s conclusion, the agency advised GAO that there were no other documents. GAO sustained the protest, stating: “Here, nothing in the record reflects the agency’s apparent determination that award should no longer be made to NavQSys. The agency provided no clear interpretation of the facilities clearance provision nor explained how it applied to NavQSys’ proposal.”

For an awardee disappointed with an agency’s decision to take corrective action, NavQSys, LLC shows that it is possible to successfully challenge the decision. If you have questions about protesting a corrective action or other protests, please contact Michelle E. Litteken—Counsel in PilieroMazza’s Government Contracts Group. Michelle can be reached at mlitteken@pilieromazza.com or at 202.857.1000.
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