Government Contracts Monitor

COFC Enjoins Corrective Action Based on GAO Attorney’s Pre-Decisional E-Mail that COFC Determines Was Wrong and Without a Rational Basis

September 29, 2011

In a recent case at the U.S. Court of Federal Claims (“COFC”) a protestor successfully challenged the procuring agency’s proposed corrective action terminating the protestor’s contract and re-opening the competition. 

 

 The proposed corrective action was premised on a pre-decisional e-mail by a GAO attorney, falling short of actual “outcome prediction,” stating that it was likely that the GAO would sustain a protest by a disappointed bidder.  The Court, per Judge Sweeney, rejected various jurisdictional challenges to the bid protest complaint by the Government and intervenor, including the argument that the Complaint was premature since the protestor might win the reprocurement, and ruled that the Court’s broad jurisdiction in bid protest cases extends to reviewing the subject GAO attorney’s e-mail to the extent such formed the basis for the procuring agency’s proposed corrective action. 

The Court determined that the GAO attorney’s analysis was wrong and without a rational basis, both as to timeliness of the protest and alleged deficiencies in the source selection process.  The Court further examined the procuring agency’s corrective action notice to the GAO.  Determining that such notice lacked an explicit rationale, the Court looked at the specific proposed corrective action and determined that such was in response to all of the grounds raised in the initial and supplemental GAO protests.  The Court therefore analyzed all of such grounds, and determined that none constituted a valid ground for the proposed corrective action.  Having sustained the protestor’s claims on the merits, the Court determined that reopening the procurement in the absence of any established violation would prejudice and irreparably injure the protestor, and further that such would impose unnecessary burdens and costs on the Government when it already had a valid award, and that the public interest in fair and open competition favored honoring the properly made award.  The Court therefore sustained the protest and entered a permanent injunction barring the procuring agency from implementing the proposed corrective action, thereby leaving the originally challenged contract in place.  Systems Application & Technologies, Inc. v. U.S., COFC Case No. 11-280C, decided August 25, 2011 (Sweeney, J.).

The lessons of this case include: (1) a procuring agency should not jump too quickly to take corrective action where the merits do not clearly mandate such, and needs to clearly explain the bases for its action and not just rely on the decisions or recommendations of others; (2) reopening a completed procurement where award has been made prejudices the awardee; (3) the awardee in such circumstances has standing to sue and the Court of Federal Claims will hear a challenge to the propriety of the corrective action, whether proposed or already implemented; and (4) the Court will review (i) even a GAO attorney’s informal e-mail advice to the parties, and/or (ii) the procuring agency’s corrective action notice letter to the GAO, where such provide the bases for the challenged procuring agency corrective action.

Hopwell Darneille III is the attorney responsible for the content of this post.