Saturday, October 13, 2012


In two recent decisions, the Government Accountability Office (GAO) clearly has restated the rule that for GAO to sustain a protest, the protester must show it was prejudiced by the agency error, even if that error is admitted by the agency.
"Our Office will not sustain a protest unless the protester demonstrates a reasonable possibility that it was prejudiced by the agency's actions, that is, unless the protester demonstrates that but for the agency's actions, it would have had a substantial chance of receiving the award."  (Emphasis added.)
In one case, the protester argued that the agency improperly based its final evaluation on the protesters initial proposal which were changed in its final proposal revision.  The agency acknowledged that it erred but argued the protester was not prejudiced because the heart of the significant weakness the agency found in the protester's proposal was its failure to meet certain small business goals, overall small business participation and women-owned business participation.  This weakness persisted in the final proposal revision. Thus, GAO found no prejudice and denied the protest.

In another case, the agency admitted that it waived a requirement for the firm that was awarded the contract.  GAO said that in cases where an agency waives a requirement, it will sustain a protest only if the protester is prejudiced.  "In such circumstances, prejudice does not mean that, had the agency failed to waive the requirement, the awardee would have been unsuccessful."  GAO went on to explain:
Rather, the pertinent question is whether the protester would have submitted a different offer that would have had a reasonable possibility of being selected for award had it known that the requirement would be waived.
The protester failed to argue that the waiver affected the submission of its offer, so GAO found no basis to sustain that aspect of the protest (although it was sustained on other grounds).

The lesson is clear for both sides.  Protesters must show they were prejudiced by the improper agency action.  Agencies need to be aware that they need to examine the prejudice issue in a protest proceeding to make sure they argue lack of prejudice even if the alleged error is found by GAO to exist.      

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