Government Contracts Monitor

Show You Are an Interested Party -- Don’t Expect the GAO to Do Your Job for You

June 30, 2014

The recent Government Accountability Office (GAO) decision, Tyonek Worldwide Services, Inc. – Reconsideration, B-409326.6, (Comp. Gen. May 15, 2014), illustrates the importance of affirmatively demonstrating interested party status rather than arguing after the fact that the GAO should confer it.

The protestor, Tyonek Worldwide Services, Inc., (Tyonek) submitted a proposal in response to a Department of the Army solicitation for aviation maintenance and logistics services. The solicitation provided for the award of the contract on a best value basis, considering three factors: (1) management/technical; (2) cost/price; and (3) past performance, with the management/technical factor weighed significantly more important than the cost/price and past performance factors. Tyonek’s proposal was found unacceptable under the management/technical factor and therefore ineligible for award. Indeed, all but two offers were found unacceptable. One of these, Y-Tech, received the award and Tyonek and another firm protested, arguing that (1) the Army improperly found their proposals to be unacceptable and (2) the Army’s evaluation of Y-Tech’s winning proposal was flawed. On the first protest ground, GAO found that the Army’s evaluation of the protesters’ proposals was reasonable. And, because GAO found the Army’s evaluation was reasonable, it “concluded that Tyonek and the other firm were not interested parties to challenge the evaluation and award to Y-Tech” since they were not in line for award. GAO therefore, did not address the second protest ground.

Tyonek filed for reconsideration.

In its request, Tyonek argued that if its challenge to the evaluation of the winning proposal had been sustained, the Army would not have made an award to the sole remaining offeror but instead would have held discussions with at least Y-Tech, Tyonek, and the other qualified offeror. Tyonek argues that GAO “should have inferred that the Army would have held discussions rather than making an award to the third offeror, and thus Tyonek concludes that it was an interested party notwithstanding the third offeror’s existence.”

GAO rejected this argument, stating that “under the bid protest provisions of the Competition in Contracting Act of 1984 (CICA), only an “interested party” may protest a federal procurement. That is, a protester must be an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of a contract or the failure to award a contract.” To determine if a party is an interested party, the GAO considers “the nature of issues raised, the benefit or relief sought by the protester, and the party’s status in relation to the procurement.” If the party protesting would not be eligible for award of the contract were its protest sustained, then it is not an interested party.

The GAO reasoned that since the Army evaluated a proposal other than Y-Tech’s as acceptable, and evaluation of that proposal was not the subject of or affected by Tyonek’s protest allegations, such proposal “remained in line for award ahead of Tyonek.” As a result, Tyonek was not an interested party with the requisite standing to challenge the evaluation of Y-Tech’s proposal. Once GAO concluded that Tyonek’s proposal was properly evaluated as unacceptable, only the single offeror who remained in the competition had a direct economic interest in challenging the evaluation of Y-Tech.

Tyonek also complained that neither the Agency nor the Intervenor raised the issue of standing during the course of the protest. However, GAO noted that CICA specifically requires that a protester be an interested party, thus the question is before GAO in every protest regardless of whether it was raised by the parties.

The takeaway? Make sure that your protest grounds, if upheld, would render you next in line for award and, therefore, an interested party. You won’t be able to rely on the GAO to infer circumstances that relieve you from the need to make such a showing. Additionally, just because the Agency may not raise the issue, doesn’t mean you are off the hook.

Heather Joyce is the attorney responsible for the content of this article.