A look into the world of federal contracting protests

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As detailed as solicitations and procurement rules might be, protests are a regular part of the federal contracting scene. Protesters can file with the Government Accountability Office, or with the U.S. Court of Federal Claims — and get wildly different results. Federal Drive with Tom Temin got analysis of one such case with Smith Pachter McWhorter attorney Joseph Petrillo.

Interview transcript:

Tom Temin: I guess people don’t normally think that depending on where you file your protest, you’ll get a different outcome. But that’s what happened. Tell us first of all, what this acquisition was all about and who was doing it?

Joseph Petrillo: Sure. This is an acquisition by the United States Department of Agriculture for property and asset management services in connection with taking care of mortgages — servicing mortgages — on single family rural housing is a program they have and they use a contractor to manage their property and assets. The RFP was on a best value trade-off basis — fairly classic situation where the non price factors were significantly more important than price. Non price factors were technical capability, including relevant experience, past performance, and the price factor was evaluated for realism as well as reasonableness. Now, those are terms of art. Reasonableness means is the price too high, realism is is it too low — where the contractor is not going to have adequate funds to perform properly. And after the Department of Agriculture awarded a contract to ISN, I disappointed offeror Mortgage Contracting Services, protested to GAO, the Government Accountability Office, they denied the protest. But Mortgage Contracting Services then protested instead to the court of federal claims. And as you mentioned, there was a different result there.

Tom Temin: Let’s go back to the reasons they were protesting, what were their grounds for the protest?

Joseph Petrillo: Sure. I should also add, by the way, that I’m indebted to Professor Emeritus Ralph Nash of the George Washington University Law School, who wrote up these protests in his newsletter. The two main issues were past performance and the realism of price — was the price too low? With regard to the past performance factor, the solicitation asked for three references, three contracts, and the had to be completed during the past three years or currently in process. They had to be similar to the USDA contracting size, scope, and complexity. And they had to be specifically related to property preservation and inspection services. So they’re asking, in a fairly ordinary way, are they recent, are they relevant references? And on the past performance factor, the awarded achieve the highest available score. Protester argued that two of the three references didn’t meet that standard of recency, or relevance in terms of size and scope. GAO felt that this RFP language wasn’t a strict definition. And if you didn’t exactly meet those categories, the agency had discretion to determine that nevertheless, they were references that were available for review and for evaluation. The court, however, looked much more searchingly at the facts. One reference, of the three, was less than a 10th of the size of the USDA project. And there was no CPARS data for that reference, and the agency hadn’t provided a questionnaire. The other, second of the three references, was not for property preservation and inspection services. There was no record showing that what the contractor did in performing that contract amounted to property preservation and inspection services, which the RFP specifically asked for. So, with those limitations, the court was wondering how ISN, the awardee, got the highest possible score. Even if it did a good job on the contracts, were they really the kinds of contracts that USDA was looking for?

Tom Temin: We’re speaking with Joseph Petrillo, he’s a procurement attorney with Smith Pachter McWhorter. And the question really is, why does GAO look at it in one way, and the courts look at it in another way? And what does this say about the whole protest process?

Joseph Petrillo: Well, the court looked at, as I’ve said, at the record, and didn’t find an adequate explanation in the evaluation record. So I think there are two things different here. First of all, GAO is looking at the solicitation and trying to see whether it’s specifically and explicitly in GAO’s view, keeps the agency from doing what it did. It looks really at what could have happened as well as what apparently did happen. The courts looking at evaluation record, what did the agency say it did? And it’s taking the facts in much more detail, I think, then GAO did. And when it drills down into the facts and defines discrepancies, it wants to find an explanation of the record for what’s happened. And that didn’t happen here.

Tom Temin: Well, is this that GAO and the courts are consistent in the way they look at things, or could it have just been that particular judge, and that particular GAO attorney, that is to say, do you know what you’re going to get consistently, depending on where you file?

Joseph Petrillo: That’s a very good point. At the court, each individual judge looks at things in their own particular way. So the judge is going to differ, because they do differ from person to person. At GAO, there is perhaps more unity in terms of the result, because they have an organizational structure in which the attorney who’s interfaces with the parties during the protest has a reviewer, and that goes up through a review chain before the protest is issued. So there’s probably more uniformity in the GAO approach. But still, the person who’s on the ground looking at the actual protest issues, there’s some variation there as well. So I have to say that as much as you’d like to think that you get consistent results, that’s probably not the case.

Tom Temin: And how often in your experience do protestors lose, say a GAO, and then go on to go to the courts? And is that a common occurrence? And is overturning what GAO says by the court, is that common?

Joseph Petrillo: I think it is not a common experience. These can be very expensive, and doing two protests is obviously going to be a lot more expensive than one. In addition, if the GAO decision seems very well based and there’s not too much to attack in the decision, one is discouraged from going to court. And it does put you in a worse position, going to court having lost the GAO protest. But there are instances where the protesters convinced the GAO has done it wrong. And they can get a different result in court, as this protest shows.

Tom Temin: And just review for us. Do people have to go to GAO first and then court, or can they go directly to court with a protest?

Joseph Petrillo: There’s no requirement that you go first to GAO or even to the agency with a protest. The protester or has the choice of which forum it selects. As we’ve mentioned, if you go to GAO, you’re going to be able to go to the court as well, if you don’t like the results.

Tom Temin: But with GAO, it’s probably where people default, because it’s a lot faster too, isn’t it? And I think the fees are less.

Joseph Petrillo: It tends to be a more streamlined, less expensive process. It is often faster. The GAO will give you a decision in a protest in 100 days, and it always does that. The courts are expeditious, but they can be slower.

Tom Temin: All right, well, good lessons for contractors thinking about this. Joseph Petrillo is a procurement attorney with Smith Pacter McWhorter, as always, thanks so much.

Joseph Petrillo: Thank you, Tom.

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