Hiccup in GAO's New Electronic Docketing System Resulted in Untimely Bid Protest

The Department of Housing and Urban Development (HUD) entered into a one year contract with P.K Management Group (PKMG) for field service management services and HUD managed properties in the Pacific Northwest. The contract was awarded on a sole source basis citing unusual and compelling urgency that had arising from HUD's decision not to exercise an option to extend the incumbent contractor. HUD need to provide continuous services so that approximately 500 HUD-owned properties in the Pacific Northwest could be marketed, preserved and protected, and so that the risk of adverse occupants, vandals, and thieves could be managed.

One company, CWIS LLC did not think that the sole source justification was adequate and that HUD lacked a valid legal and factual basis to award a contract to PKMG. CWIS argued that 12 months was too long and exceeded the time necessary to conduct a competition for the requirement and moreover, the unusual and compelling urgency cited by HUD is negated by its own failure of reasonable planning.

CWIS then filed a bid protest. At least it thought it filed a bid protest. One minute before the closing time for submitting protests, counsel for CWIS attempted to file a protest using EPDS (Electronic Protest Docketing System). The attempt was unsuccessful. One minute after the closing time, CWIS counsel notified the GAO by email that its attempt to file using EPDS had been unsuccessful and 15 minutes after closing time, CWIS counsel submitted the protest by email to the GAO protest inbox.

GAO showed no sympathy for CWIS stating that CWIS had, by regulation, 10 days to file its bid protest and 10 days should have been more than sufficient. Since the protest was untimely (by 15 minutes), GAO dismissed it.

Read the full decision here.

Final Rule on GAO Bid Protest Changes

The GAO (Government Accountability Office) published its final rule establishing a new mandatory electronic filing and document dissemination system for filing bid protests. The rule becomes effective on May 1st (one month from now). Oh, and by the way, it comes with a filing fee - it will now cost your $350 each time you file a bid protest.

There were 19 comments pertaining to the proposed fee when the GAO published its proposed rule. Five of the 19 were in favor of the fee. Fourteen commentators opposed the fee on the basis that it creates a barrier to filing protests for small businesses, some of which stated that they lack the resources to pay the fee. In particular, one commentator argued that a $350 fee would make a protest economically infeasible for small businesses seeking the award of very small contracts.

GAO responded:

GAO does not intend for the fee to discourage or reduce the number of protests. Rather, the proposed fee will cover the costs of establishing and operating EPDS (Electronic Protest Docketing System). GAO does not agree with the proposals to charge a fee that is higher than necessary to address the costs of EPDS or for the purpose of discouraging protests. With regard to a lower fee or fee waiver for small businesses, GAO has concluded that the anticipated fee of $350 is appropriate given the costs of the system. Additionally, GAO has concluded that the interest of administrative efficiency supports imposition of a uniform fee for all protests.

GAO doesn't want to discourage protests, but at $350 per filing, it would have cost Latvian Connection $157,000 to file its 450 bid protests over a five year period. Perhaps we should refer to the $350 fee as the "Latvian Fee".

There are a few other significant revisions to the bid protest regulations including (i)due dates, (ii) requests for documents (iii) the ability to request relevant documents not in the Government agency's possession, and (iv) handling protected documents. Read the full final rule here.

GAO Guide for Preparing and Submitting and Adjudicating Bid Protests

GAO (Government Accountability Office) recently published its 10th Edition of its guide for preparing, submitting, and resolving bid protests. See Bid Protests at GAO: A Descriptive Guide. When filing bid protests with the GAO, this is a great resource, whether you fly solo or retain professional help.

The laws and regulations that apply to Federal Government contracting are designed to ensure that procurement is conducted fairly. On occasion, bidders or other interested in Government procurement may have reason to believe that a contract has been, or is about to be, awarded improperly or illegally, or that they have been unfairly denied a contract or an opportunity to compete for a contract.

One avenue of relief for those concerned about the propriety of a contract award has been the GAO. The GAO provides an objective, independent, and impartial forum for the resolution of disputes concerning the awards of Government contracts.

The new edition of GAO's bid protest Guide incorporates administrative changes required by recent legislation - namely the requirement to establish an electronic filing system and charge protest filers a fee to cover the cost of that system. Click here for more information on the Electronic Protest Docketing System (EPDS).

GAO To Begin Charging a Filing Fee for Bid Protests

Beginning sometime next year (2018), the GAO (Government Accountability Office) will begin charging $350 to anyone filing bid protests. Currently, there is no charge for filing. For some contractors, the cost may be even higher. There is a provision in the Senate version of the 2018 National Defense Authorization Act (NDAA) that would require unsuccessful bidders to pay the cost for unsuccessful protests filed against the Defense Department (this applies to companies with revenues in excess of $100 million).

The ostensible reason for levying this new fee is to help offset the cost of development, operations, and maintenance of a new electronic protest docket system (EPDS). $350 per filing will bring in about $1 million a year based on historical filing totals - not nearly enough to cover the costs but every little bit helps. Besides, Congress mandated that GAO begin charging fees.

Some cynics suggest that the real purpose behind the new filing fee is to discourage frivolous protests. You will recall that last August, the GAO took the unprecedented step of suspending a firm from filing protests for one year because it had filed 300 bid protests over a four-year period and 150 protests in fiscal year 2016 alone (see GAO Suspends Firm From Filing Bid Protests For a Year). None of these protests were sustained and most were dismissed without merit. Since that suspension was lifted, the formerly suspended firm has already filed five new bid protests. For a protestor filing hundreds of protests per year, a $350 filing fee may be a deterrent.

For most companies filing bid protests, a $350 filing fee will not be a deterrent to filing. When tallying up the costs of a bid protest, especially if outside counsel is engaged, $350 will be represent a very immaterial portion of the total costs.

Bid Protest Costs must be Adequately Supported to be Reimbursable

When companies are successful in winning a bid protest before the GAO (Government Accountability Office), the GAO often also recommends that the successful protester be reimbursed reasonable costs of filing and pursuing its protest. Such a recommendation to reimburse successful protesters however, is not a blank check. A protester seeking to recover the costs of pursuing its protest must submit sufficient documentation to support its monetary claim.

Although the GAO has recognized from time to time that the requirement for such documentation may entail certain practical difficulties, it does not consider it unreasonable to require a protester to document in some detail the amount and purposes of activities associated with the claimed effort and establish that the claimed hourly rates reflect the concerned individuals' actual rates or compensation. Ultimately, the burden is on the protester to submit sufficient evidence to support its claim. That burden is not met by general, inadequately-supported statements that particular costs have been incurred.

A company name AeroSage LLC learned about the need to adequately support its claim the hard way. AeroSage won its bid protest and was invited by GAO to submit a proposal for its cost in pursuing the protest. AeroSage submitted a claim totalling $26 thousand. Ultimately, all it got was the $350 EPDS (Electronic Protest Docketing System) fee. AeroSage's claim consisted primarily the hours incurred by its President in pursuing the bid protest (110 hours) at $250 per hour. The problem for AeroSage however was that there was no data to back up the number of hours or the hourly rate other than general statements that the amounts represented accurate data or data that was inconclusive as to its relevance to the claim.

The full GAO decision can be found here.