Government Contracts Monitor

Due Process is Alive and Well

March 20, 2013

By: Lindsay Simmons

Last month, we reported on the successful pre-award bid protest, Miles Construction, LLC v. United States, No. 12-597C (Fed. Cl. Feb. 14, 2013).  While the majority of the decision and analysis concerned the standards for determining service-disabled veteran-owned small business (“SDVOSB”) status, this case is also noteworthy on due process grounds.   

Miles Construction, LLC (“Miles”) filed a pre-award protest in the United States Court of Federal Claims after it was found ineligible for award based upon a successful agency-level protest by the second lowest bidder in which it was found that Miles did not qualify as a SDVOSB.  Miles successfully challenged the decision and was reinstated into the SDVOSB program.

What is unusual about this case is that while the agency-level protest challenged Miles’ eligibility as an SDVOSB, the decision maker – the Office of Small Disadvantaged Business Utilization (“OSDBU”) – considered grounds not raised by either the Contracting Officer (“CO”) or the Protester. The OSDBU expanded its inquiry into items beyond those raised by the CO and the Protester based on an interpretation of its mandate to “decide all protests on service-disabled veteran-owned . . . business status.”  48 C.F.R. § 819.307(c).  The Court gave deference to the OSDBU’s position that it could “reach beyond a protester’s allegations or a contracting officer’s refusal to raise additional issues.”  But the inquiry did not end there.

What is important about this case – and very helpful to putative awardees – is the Court’s finding that an agency cannot act “without affording an entity whose award or projected award is protested with notice of an alleged defect and an opportunity to respond.”  In other words, if the OSDBU intended to raise and examine issues relating to Miles’ SDVOSB status that were not raised by the CO or the protester, the OSDBU had to notify Miles and provide Miles with an opportunity to respond to these new grounds – to provide basic procedural due process.  Without such an opportunity, the OSDBU’s decision is “plainly erroneous and cannot be upheld.”

 

Lindsay Simmons is the attorney responsible for the content of this article.