If you’re a winner under a solicitation, you can’t challenge the ground rules under which you won–at least under the facts of a recent GAO bid protest decision.

In that decision, GAO concluded that the protestor of a solicitation’s terms lacked standing when the protester was subsequently identified as an awardee under the solicitation.

Daekee Global Co., Ltd., B-414899 et al., (Oct. 10, 2017), involved an IDIQ procurement for ship husbanding services in the Navy’s Seventh Fleet area of operation. Performance of the contract was to occur at both commercial and military ports throughout Korea, Japan, Russia, and Taiwan. The Solicitation broke down the services required into a number of CLINs, which included ship movement, fleet handling, waste disposal, transportation, and cargo loading, among others.

The solicitation anticipated making multiple awards to the lowest priced bidders that did not take exception to the solicitation’s terms. According to GAO, “to be considered for award, offerors needed to submit by the solicitation closing a signed proposal (with acknowledgment of all amendments) that shows the offeror is not taking exception to any solicitation term; includes the certifications and representations contained in the solicitation; and includes unit prices and total prices for all line items and sub line items in the solicitation.” Bidders were also to include a signed letter stating they were not taking exception to any of the solicitation’s terms and possessed the requisite licenses and approvals for operation.

Prior to the closing date for the solicitation, Daekee Global Co., Ltd. filed a protest challenging the terms of the solicitation. Daekee raised a number of concerns with the structure of the solicitation, including concerns about regulatory compliance and the fairness of subsequent task order competitions.

Despite filing a timely protest, Daekee also submitted a proposal in response to the solicitation. While Daekee’s protest was pending, the Navy evaluated proposals and determined Daekee was a presumptive awardee. The Navy planned to make an award to Daekee as soon as the protest’s performance suspension period was lifted.

Because Daekee was a presumptive awardee under the Solicitation, the Navy moved to dismiss the protest, arguing that Daekee was not an “interested party” within the meaning of the GAO’s Bid Protest Regulations. While Daekee was pleased to discover it was a presumptive awardee, it contended its protest should still be resolved on its merits because significant questions regarding the structure of the Navy’s procurement remained outstanding. Specifically, Daekee reiterated concerns about the fairness of competition at the task order level.

GAO was not convinced. According to GAO, the question was one of competitive prejudice. As GAO explained:

Competitive prejudice is a required element of every viable protest, and where none is shown, we will not sustain a protest. In the context of a protest challenging the terms of a solicitation, competitive prejudice occurs where the challenged terms place the protester at a competitive disadvantage or otherwise affect the protester’s ability to compete.

Since Daekee had been identified as an apparent awardee under the Solicitation, GAO concluded Daekee had not been at a competitive disadvantage under the solicitation’s terms. As for Daekee’s allegations regarding the fairness of competition at the task order level, GAO concluded these challenges were premature.

In our experience, it’s not exactly common for an agency to announce, in the midst of a pre-award GAO bid protest, that the protester will be awarded a contract once the protest concludes. That said, Daekee Global Co. suggests that an agency might be able to eliminate any pre-award bid protest simply by announcing an intent to award a contract to the protester. It remains to be seen whether GAO’s decision is truly that broad, or whether there might be exceptions under which a protester could show competitive prejudice despite being named as an awardee.
This content originally appeared on SmallGovCon.


Image Courtesy of Ryan McGuire

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