Overcome by Events: Facts Not Directly Related to Protest Grounds Can Prevent an Ultimate Protest Victory
August 18, 2017
By: Eric Whytsell
In the compliance context, contractors often have to try to do the impossible: think about everything all the time. A similar ideal applies in the protest context. When considering whether and how to pursue a protest, it's important to think about more than just whether you can win the short-term battle on the substantive legal issues. Contractors also need to consider whether there are other, real world factors that bear on their ultimate likelihood of success in the overall war. As many protesters have learned to their chagrin, forcing an agency to take corrective action is no guarantee of winning the contract award in the end--and even fully-briefed protest grounds are not always considered, much less decided. The recent Government Accountability Office (GAO) decision in Bluehorse Corporation, B-414643 (August 11, 2017) serves as a reminder of the significant impact that extraneous factors can have--and why it’s important to maintain comprehensive situational awareness throughout any protest.
The matter involved a challenge by Bluehorse Corporation to the Air Force’s proposed corrective action in response to an earlier Bluehorse protest. In the prior protest, Bluehorse had challenged the terms of the pre-solicitation notice issued by the Air Force for Taser X26P conducted electrical weapons (CEW) and related accessories. The notice had stated that the Air Force was proceeding under Federal Acquisition Regulation (FAR) 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements. It also noted that the Taser X26P is the only currently approved CEW for use by Air Force personnel.
Bluehorse had protested the original pre-solicitation notice as unduly restrictive of competition, alleged that the agency failed to conduct a proper market research, and claimed it should have been afforded the opportunity to become an approved Air Force source for CEWs. Prior to the due date for the agency report, the Air Force asked the GAO to dismiss the protest as academic because it had decided to cancel the procurement and reassess its acquisition strategy and brand-name justification. The agency explained that the contracting officer had reviewed the pre-solicitation notice and market research in response to the protest and concluded that some items the agency initially intended to purchase on a sole-source basis might be procured using other methods. For this reason, the Air Force decided to reevaluate which items, if any, could appropriately be acquired on a sole-source basis.
In response, the GAO dismissed the protest.
Bluehorse's response to the agency's request for dismissal, however, had included objections to the cancellation decision. The GAO addressed these as a separate matter in the later protest. Bluehorse essentially argued that the Air Force’s action was pre-textual and failed to resolve the alleged improprieties in its procurement for Taser brand products. It also reiterated its prior contention that it should be given an opportunity to offer its PhaZZer CEW product in future competitions.
Bluehorse never got the chance to have those issues decided by the GAO.
Instead, after the agency report, comments, responses to inquiries from the GAO, and comments on those responses were filed, the Air Force filed a request for dismissal, asserting that Bluehorse was no longer an interested party. According to the agency, Bluehorse had lost interested party status as the result of a recent permanent injunction issued by the United States District Court, Middle District of Florida, Orlando Division that enjoined PhaZZer and “any other persons who are in active concert or participation with Phazzer or its officers” from offering for sale or selling the PhaZZer Enforcer CEW and cartidges. Thus, the Air Force argued, Bluehorse is prohibited from offering the PhaZZer Enforcer CEWs and Taser-compatible cartridges and, because it offers no other product similar to the Taser X26P, no longer has any economic interest in how the agency purchases Taser products--or standing to protest the propriety of the agency’s corrective action in this case. Simply put, Bluehorse would have no chance of receiving the award for the CEW products sought even if its protest were sustained.
After noting that only an interested party--an actual or prospective offeror whose direct economic interest would be affected by the award of a contract or the failure to award a contract--may protest federal procurement, the GAO noted that Bluehorse did not deny that it is incapable of providing any CEWs or cartridges. Rather, Bluehorse argued that it should be allowed to sell Taser-compatible PhaZZer holsters because those accessories were not subject to the District Court’s injunction.
In response, the Air Force pointed out that the underlying procurement sought to procure both Taser X26P CEWs and related accessories and argued that Bluehorse’s in ability to provide both means it is not an interested party. The agency also contended that, because Bluehorse now lacks standing to challenge the underlying procurement, it is also without standing to challenge the agency’s decision to cancel that procurement.
The GAO agreed, noting that while the protester might have the requisite legal interest in a future procurement for holsters, the acquisition here aimed to procure CEWs and accessories together, and did not provide for separate awards. For this reason, the GAO held that Bluehorse’s ability to furnish holsters alone does not render it an interested party to challenge the agency’s cancellation decision and denied the protest on that ground.
Obviously, this was not a case in which the protester was blindsided by an unexpected occurrence. Bluehorse certainly knew about the ongoing litigation in District Court and recognized the potential adverse impact an injunction in that matter might have on its protest. But the case does amply illustrate how the outcome of a protest can easily be driven--and driven off the rails--by even known facts not directly related to the asserted protest grounds. An unhealthy fixation on “protest facts” to the exclusion of all else can be very harmful to your chances for a protest win. Instead, do your best to take into account all the facts even tangentially related to your protest.
Eric Whytsell is responsible for the contents of this Article.
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