Sunday, August 26, 2012


What does a contractor do if it wins the award, a competitor protests to the Government Accountability Office (GAO), the GAO lawyer says to the agency the protest has merit, the agency "determines" to take "corrective action" and GAO dismisses the protest as "academic"?  The corrective action includes termination of the successful awardee's contract.  This has happened many times and the successful awardee often has just taken its lumps and lost the award after the corrective action is taken.  How does a contractor protest?  Go to the Court of Federal Claims (COFC).

The Court of Appeals for the Federal Circuit (CAFC) recently has reaffirmed that the COFC has jurisdiction to hear complains about "corrective action" taken by an agency.  In the case, the successful awardee faced the very same situation where, because of some statements made by the GAO lawyer, the Army decided to terminate the protester's contract.  So, the company went to the COFC and obtained an injunction against the termination.  The government appealed.

The CAFC said the Tucker Act provides broad jurisdiction to hear bid protests, including objections to the solicitation, any alleged violation of statute or regulation and practically any complaint "in connection with a procurement or a proposed procurement" (before or after award).  "This court has made clear that bid protest jurisdiction arises when an agency decides to take corrective action even when such action is not fully implemented."

Many of us have complained that GAO washes its hands of the protest case once the agency announces corrective action.  It would seem prudent, as an administrative matter, for GAO to scrutinize what the agency intends to do before dismissing the case as academic.  As the grand protector of the integrity of the procurement system, GAO should oversee the agency's plan to make amends.  The present system allows room for mischief if the agency wants to get rid of a protest. All the agency has to do is announce corrective action and the protest goes away.

So the lesson is that judicial relief is available in the COFC if an awardee objects to the corrective action determination.  The problem is it can get expensive.

Postscript:  It is possible to go back to GAO with a new protest if the agency's corrective action is flawed and to go to the COFC if the "corrective action" recommended by GAO in a decision is objectionable.

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