An Agency’s Ultimate Trump Card in a Protest: Suspension of the Protester
January 6, 2014
By: Eric Whytsell
A recent case serves as a reminder that the Government Accountability Office (GAO) does not review agency suspension decisions – even where they impact ongoing protest litigation.
In Inchcape Shipping Services Holding, Ltd., B-402687.10; B-402687.11 (Comp. Gen. Dec. 9, 2013), protester, Inchcape Shipping Services Holding, Ltd. (ISS) of Dubai, challenged awards for maritime husbanding support services by the Department of the Navy, United States (U.S.) Fleet and Industrial Supply Center. ISS argued that the Navy had not followed the appropriate procedures when awarding the contracts in a reprocurement necessitated by default termination of contract for three geographic regions. After the default terminations, the agency conducted a reprocurement evaluation and awarded contracts to the second-lowest priced offeror from the competitive range established for each region. ISS challenged all three awards, essentially arguing that too much time had passed since the original contract awards for the Navy to properly use the reprocurement authority set forth at FAR Part 49.3.
In response, the Navy sought summary dismissal, arguing that ISS was not an interested party to challenge the awards because its original proposal had been excluded from the competitive range, in part, because its security plan had been found unacceptable. GAO denied the request, advising the parties that it would consider the protest on its merits and that it considered the then-current record to be adequate to resolve the protest, so that no additional development of the record was required. The Navy subsequently informed GAO that ISS has been suspended from contracting and again requested summary dismissal of the protest.
ISS argued that this second request for summary dismissal should be denied for two primary reasons: (i) because GAO had advised that the record was “closed,” the agency was prohibited from submitting further information, including information about ISS’s suspension from contracting; and (ii) its suspension by the Navy was “commenced or accelerated to prevent GAO’s decision” concerning the merits of the protester’s challenge to the reprocurement awards.
GAO rejected both arguments.
With respect to the contention that the Navy was barred from telling GAO about its suspension of ISS, GAO held that, regardless of whether or not the record was closed, “we do not think that the agency was prohibited from advising our Office of the significant new development concerning ISS’s suspension.” Of course, news of the suspension was significant because an agency cannot award a contract to a debarred or suspended contractor – and a protester is not an interested party if it would not be in line for award. For this reason, GAO concluded that ISS was not an interested party to pursue its protest.
In response to ISS’s other attempt to avoid the impact of its suspension – essentially blaming the timing on the Navy, GAO simply reiterated its established position: “suspension and debarment of a contractor is a matter of agency contract administration that we do not review.” According to GAO, the contracting agency is the appropriate forum for resolving disputes because the FAR sets forth specific procedures for both imposing and challenging a suspension or debarment action. See FAR §§ 9.406-3(b), 9.407-3(b). Here, GAO declined to consider ISS’s allegations concerning the propriety of the suspension but went on to hold that such considerations would not allow GAO to consider the merits of ISS’s protest notwithstanding its suspension from contracting.
The bottom line? Regardless of how strong the protest grounds are, debarment or suspension (no matter how inappropriate) will leave a protester dead in the water, with summary dismissal a foregone conclusion and no opportunity to challenge or defend against the agency action.
Eric Whytsell is the attorney responsible for the content of this article.