Government Contracts & Investigations

How Soon Is Soon Enough for Corrective Action to Preclude Recovery of Protest Costs?

By | February 27, 2020

Contractors whose protests result in the challenged agency’s taking corrective action may attempt to recover their protest costs, particularly when they feel that the corrective action was unduly delayed. As the recent Government Accountability Office (GAO) decision in INTELiTEAMS, Inc.—Costs, B-418123.2, B-418180.2 (February 25, 2020) demonstrates, however, the operative date for determining the timeliness of corrective action for this purpose is generally the date of the agency’s announcement rather than the date the corrective action is completed.

In INTELiTEAMS, Inc., the protester sought to be reimbursed for the costs of filing and pursuing its protests challenging the issuance of two task orders for support services by the Department of Justice, Federal Bureau of Investigation (FBI). Those protests both challenged the agency’s evaluation of INTELiTEAMS’ proposals and the best-value decisions—and resulted in the agency’s informing the GAO that it was taking corrective action by reevaluating quotations and making a new best-value determination. The GAO responded by dismissing both protests as academic.

INTELiTEAMS subsequently sought to recover the costs associated with filing and pursuing the two protests, asserting in both instances that the agency has unduly delayed taking corrective action in the face of its clearly meritorious protests, thus entitling it to costs. More particularly, INTELiTEAMS pointed out that, despite the passage of over a month since the agency stated that it was going to take corrective action, a new best-value award decision has still not been issued. In response, the agency claimed that it did not unduly delay corrective action in either case because it announced its intent to take corrective action in relation to both protests on or before the day the agency report was due. According to the FBI, when an agency takes corrective action prior to the due date set for receipt of the agency report, the GAO generally considers such action to be prompt, and will not recommend the reimbursement of costs.

The GAO agreed with the agency, noting that it may recommend reimbursement of protest costs if, based on the circumstances of the case, it determines that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. However, as the FBI noted, the GAO generally views an agency’s corrective action as prompt (i.e., not unduly delayed) where the corrective action is taken prior to the due date and time for submission of the agency report.

According to the GAO, that is precisely what happened here, so neither action was unduly delayed and a recommendation that the agency reimburse the protester’s costs was not warranted.

The GAO also explained that INTELiTEAMS had failed to allege a cognizable basis of protest because, while it objected to the length of time that the agency was taking to complete the proposed corrective action, the protester has not identified any violation of procurement law or regulation by the agency. In this regard, INTELiTEAMS did not claim that the FBI was required to have completed its corrective action sooner, or assert that any alleged delay is contrary to law or regulation, or even allege any bad faith by agency personnel. Without more, the bare assertion that the corrective action is taking too long is not sufficient to establish that an agency violated applicable law or regulation.

The lesson? Not every “delay” is an undue delay that merits cost recovery. If you want to seek reimbursement for your protest costs due to a perceived delay in an agency’s corrective action, focus on the date the corrective action was announced, not the completion date—unless the delay in completing the corrective action results from a violation of applicable law or regulation.

Contact Eric Whytsell for more information.