We’ve talked about it here before – the importance of establishing prejudice if you wish to prevail in a bid protest. Nonetheless, the concept is still confusing to many, and a failure to consider this issue is one of the most common mistakes we see contractors make in the bid protest context. Well, a recent bid protest case should serve as an important reminder concerning the importance of conducting a prejudice analysis as part of any protest filing.
In Dust Busters Plus, LLC, B-419853.7, the protestor challenged the award, to a number of firms, of blanket purchase agreements (BPA) involving wildland firefighter services, pursuant to a solicitation issued by the Department of Agriculture, Forest Service (“the Agency”). The Solicitation had advised that awards would be made on a best-value tradeoff basis considering two factors. The first factor, quote acceptability, would be evaluated on a pass/fail (i.e., “go” or “no-go”) basis, weighing three subfactors, namely (a) assent to terms of the solicitation; (b) key personnel; and (c) past performance. The second factor was price; Quoted prices would be evaluated to determine whether they were fair and reasonable.
Seventy-five contractors, including the protestor Dust Busters, responded to the Solicitation. When reviewing the contractors’ quotations, the agency evaluated Dust Busters’ quotation as “no-go” under the first factor, quote acceptability. More specifically, Dust Busters was evaluated as “no-go” under subfactor (a), assent to the terms of the solicitation, because the firm did not identify its key personnel by specific crew, and was also evaluated as “no-go” under subfactor (b), key personnel because some of Dust Busters’ proposed key personnel possessed expired qualifications. The Agency also found Dust Busters’ price to be unreasonably high.
Dust Busters protested, arguing: (1) that the Agency erred by failing to conduct a price realism analysis; (2) that the Agency erred by unreasonably evaluating Dust Busters’ quotation as “no-go” under the quote acceptability factor; and 3) that the Agency unreasonably made the selection decision on a lowest-priced, technically acceptable (“LPTA”) basis, as opposed to the best-value tradeoff basis required by the Solicitation.
After dismissing the price realism argument (sidenote: Read last week’s post if you need a refresher on price realism), the GAO addressed the protestor’s arguments concerning quote acceptability. Ultimately, the GAO agreed with Dust Busters: It found that Dust Busters’ quotation had, indeed, identified specific crews and that the Agency had therefore erred in finding that Dust Busters’ proposal failed to identify key personnel by crew. But, because the Agency had found Dust Busters’ price to be unreasonable (i.e. unreasonably high), and because the GAO had “no basis to question” the Agency’s judgement on price, the GAO found that there was no prejudice to Dust Busters. In other words, even if the Agency had properly evaluated Dust Busters’ quotation with regard to the first factor, quote acceptability, Dust Busters would nonetheless have been ineligible for award based on the unreasonableness of its pricing. Based on this same reasoning, the GAO only cursorily addressed the LPTA argument.
This outcome demonstrates the crux of the issue when dealing with prejudice: It is not enough to prove that the Agency erred. To prevail, a protestor must also prove that, but for that error (i.e. if the error was corrected), it would be eligible to win the award; but for the error, a different award decision would have occurred. If a protestor cannot prove its own eligibility and, further, prove that theoretical correction of the procurement error would change the ultimate source selection decision, it will almost certainly lose any protest.
For that reason, it is critically important, when you are planning to file a protest, to make sure you fully analyze the prejudice issue with your attorneys. Here, had the GAO agreed with Dust Busters’ arguments regarding their own price, I believe the outcome could have been quite different. But this just demonstrates why it is important to make every argument you can, as early as you can, when filing a protest. If you have questions about how to establish standing, prove eligibility, or demonstrate prejudice, or have any other questions about bid protests, please don’t hesitate to contact Obermayer’s government contracting team.
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