How two letters of the alphabet blew an award protest into a court case

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Can the simple misspelling of your own company’s name turn a simple contract award protest into a full blown court case? Well,  it’s federal contracting so of course it can. Here with the strange case of the added two letters, Smith Pachter McWhorter procurement attorney Joseph Petrillo talked to  the Federal Drive with Tom Temin .

Interview transcript: 

Tom Temin: Joe this case almost seems absurd, and yet it tied up several agency, several company and several judiciary branch officials for months.

Joseph Petrillo: Well, that’s right. I mean, we’re used to in government contracting, small errors like that being fatal. I mean, if you file your documents in court, or in a bid protest a little bit late, you’re out of the running, you can protest. And that’s even true, of course, in the proposal submission process, if your proposal is due late, with a few very narrow exceptions, it’s not going to be considered. So there’s something like that is what happened here. But it had a different result. This case arose from an acquisition by FEMA of architect engineering services to support its insurance program. It was a small business set-aside. And since it was a procurement of architect engineering services, it by law was conducted with a kind of unique process, two phase process, and the first phase offerors submit unpriced technical proposals. And then in phase two, the most highly rated offeror submits a price proposal, if its price is fair and reasonable, after negotiation, it gets the award.

Tom Temin: Yeah, so FEMA was asking first for the technical proposals without prices, and then the ones they liked the best, then they would go to those contractors and say, Alright, well, how much for this?

Joseph Petrillo: Well, it’s even more restrictive than that. It’s just the one most highly rated offeror is invited to submit a price proposal. If that price isn’t fair and reasonable, then they go to the next in line, etc. So that’s the mechanism used in those procurements and the company involved here, Focus Revision Partners, called FRP, submitted a proposal, but it wasn’t selected for phase two. Later on after FEMA had made its award decision, Focus Revision Partners, FRP learned that the award went to a company called NWI&T ATKINS, JV, they decided that they were going to file a size protest, they thought this company didn’t qualify as small under SBA’s rules for mentor-protege program.

Tom Temin: So FRP protested the winning company on size grounds.

Joe Petrillo: Exactly. When it submitted its protest, however, FRP made a mistake, they call themselves Focus Revision Partners, JV, LLC, so they added this JV, LLC at the end. And that was a mistake. There is no such entity.

Tom Temin: Junior Varsity LLC.

Joseph Petrillo: Yeah, with this case,  the CEO forwarded the protest to the SBA regional office, not withstanding that mistake and the SBA Regional Office looked at the merits and ruled against FRP. So FRP, then appealed to the Office of Hearings and Appeals at SBA. Those who lose in the regional office level can go up to OHA. So during the appeal, the awardee noticed the error in FRP’s. name.

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Tom Temin: The winning company noticed that.

Joseph Petrillo: Exactly, and they filed a motion to dismiss saying, Look, this company doesn’t exist, they can’t submit a protest.

Tom Temin: So they were saying in effect that the protest came not from FRP, the original one that did not win, but from a non-entity called FRP. JV LLC.

Joseph Petrillo: Exactly. Now FRP opposed the motion and moved to amend its protest to correct the error in its name.

Tom Temin: Little white out over the JV LLC, basically.

Joseph Petrillo: Apparently, yeah. And the rules of the Office of Hearings and Appeals allow a party to amend its pleadings, so long as no other party is prejudiced and it doesn’t unreasonably delay the hearing of the appeal. SBA’s OHA wasn’t having any of that though. They dismissed the appeal. They ruled first of all, that this FRP JV, LLC doesn’t exist. So it doesn’t have standing to file either a size protests or an appeal of a size protest.

Tom Temin: Yeah, this is really getting it to Catch-22 territory.

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 Joe Petrillo: Exactly, because the second part of it is because it lacks standing, it can’t amend the appeal to correct the error. So you can’t file the protest and you can’t fix your mistake, a Catch 22. So FRP was still not satisfied. It wants its day in court, as it were, so it filed suit in the Court of Federal Claims, and the case was heard and decided by Judge Solomson who wasn’t impressed with the SBA’s ruling. His reasoning rather, he found it circular. First of all, he said look, no one was actually confused by the error. The CEO forwarded the size protest to SBA, SBA decided it. Everyone knew who was the party who had submitted the offer and who was protesting the award, which we lawyers call the real party in interest, right? The judge noted that the question should be well, could FRP amend its filing to correct the error and the OHA rules even permit that? He then reviewed – this is a very long and well researched opinion. He reviewed an extensive body of case law about this type of mistake, which has a unique name in the law. It’s called a misnomer. And he deduced from that, that harmless clerical errors should not doom an otherwise proper filing, exalting form over substance. So at the end of the day, he ruled in favor of FRP in a 44-page opinion, and remanded the matter to OHA, which must now permit FRP to correct this erroneous filing, then OHA has to go ahead and rule on the merits of the appeal.

Tom Temin: Right. And at this point, it’s too soon to say whether the merits that is the winning bidder doesn’t qualify for a set aside under small business rules that we don’t even know yet.

Joseph Petrillo: Exactly. All this does is set up the ability of FRP to get another ruling on its size protest.

Tom Temin: And how long did this all take between the 44-page ruling back to the original filing of the protest with the extra letters added on?

Joseph Petrillo: All right, I think from the time offers were submitted, it’s been a year since offers were submitted. This has gone on for a while now, unfortunately,

Tom Temin: And all this time, FEMA is kind of just not able to get the services that it hoped to acquire?

Joseph Petrillo: Well, I’m assuming that there’s an incumbent contractor and their contract has been extended. That’s usually what happens in these instances. It’s not laid out in this decision, but that would be what I would expect to have happened. I also want to note that irony, as pointed out by the judge in his decision, the Office of Hearings and Appeals when it ruled on the appeal, left the comma out of Focus Revision Partners JD, LLC, so they made a typo, too.

Tom Temin: Wow, yes, well, just standards are dropping everywhere you look, I guess these days. Joe Petrillo is a procurement attorney with Smith Pachter McWhorter.

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