IT MAY TAKE MORE THAN ONE MISTAKE BEFORE THE PROCUREMENT IS INVALID
Government contractors may protest an award for all sorts of reasons, but not every reason is strong enough to sustain a protest on its own. One government contractor learned this the hard, and not inexpensive way, when first filing a protest at the Court of Federal Claims (COFC) and, when losing at that level, appealing to the U.S. Court of Appeals for the Federal Circuit (CAFC). Even though the Claims court agreed that the agency in question had improperly ascribed a positive value to the awardee’s billing system, the court ruled that this was not enough to establish “prejudice”. That means that the protesting company failed to show that, but for that one error, they would have had a reasonable chance of being awarded the work. The protestor appealed stating that “there is a presumption of prejudice whenever the Claims Court determines that the agency acted irrationally in making an award decision.” The appellate court disagreed, however, saying “there is no presumption of prejudice when a protestor demonstrates irrationality in an agency decision.” Additionally, the company needed to show “that there was a ‘substantial chance’ it would have received the award but for” the inclusion of the erroneous strength. Contractors can take away several lessons from this case. First, not all government bid evaluation errors are fatal to the agency’s procurement. There needs to be a finding of prejudice. Second, it can be expensive and time-consuming to pursue a protest at the COFC and then appeal it to the CAFC. There is no word on what the total dollar value of the project was, but it is easy to see how the protestors legal costs would reach into the hundreds of thousands of dollars. That would have cut significantly into any profit had the protestor been successful. As it was, they had to pay the costs of litigation without any benefit. Contractors need to keep in mind the potential income return on any protest and make that one consideration of whether or not to protest or appeal.