Court Grants Challenge to Agency’s Corrective Action in Response to Protest

December 6, 2016

By Julia Di Vito

A recent court decision may provide other disappointed offerors a pathway for challenging agencies’ corrective action that unreasonably favors the original contract awardee. In Professional Service Industries, Inc. v. U.S., --- Fed. Cl. ---, No. 16-1038C (2016), the U.S. Court of Federal Claims recently granted a bid protest of the Federal Highway Administration’s (“FHWA”) corrective action taken in response to a disappointed offeror’s protests at the Government Accountability Office (“GAO”). In granting this protest, the Court found the FHWA’s decision to amend the solicitation as part of its corrective action was not reasonable, even under the deferential standard afforded to agencies. 

The offeror originally filed two protests at GAO challenging FHWA’s award of a contract to the awardee because the awardee’s proposed Program Manager (“PM”) failed to satisfy the minimum experience requirements listed in the solicitation. In response to the initial protest, FHWA stated it was taking corrective action by re-evaluating the qualifications of the proposed PMs. FHWA again awarded the contract to the awardee, even though its proposed PM remained the same, and the offeror again protested at GAO. GAO sustained the second protest, and recommended that FHWA either re-evaluate proposals in accordance with the solicitation or amend the solicitation requirements if they did not reflect its needs.

FHWA chose the second option, and amended the solicitation to decrease the experience required for the PM position and allowed an offeror that could not meet the minimum qualifications to provide training or support to reduce any performance risks. It also eliminated some of the duties of the PM position. The offeror filed a pre-award bid protest with the court, alleging that this amendment was arbitrary and capricious because it had the effect of conforming the amended solicitation to the awardee’s original proposal.

The court granted the offeror’s protest, finding that FHWA did nothing to justify why its needs were different than those set out in the original solicitation, or at least did not document any such assessment. The court found that the documents in the record showed only that FHWA made a decision to amend the technical requirements in the solicitation, but not why it amended the requirements. The court held that while agencies that change their requirements do not need to demonstrate that the new requirements are better than the original requirements, they must at least demonstrate some basis for changing the requirements. Notably, the court was concerned that the corrective action gave the appearance that FHWA changed the solicitation requirements to conform to the awardee’s proposal, without any documentation to combat this appearance.

While the court still evaluated whether FHWA’s actions were reasonable and afforded it deference and a presumption of regularity, it ultimately required a documented and well-reasoned justification for the amendment to the solicitation. Thus, it appears that an agency’s corrective action is subject to scrutiny, at least by the Court. This outcome may give comfort to protesters at GAO facing corrective action that seems designed to result in another award to the original awardee.

About the Author: Julia Di Vito practices in the areas of government contracts, litigation, employment, and labor. She may be reached at jdivito@pilieromazza.com.

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