It’s rare that the often staid government contracts world sees an event that is truly “Breaking News!” worthy but a decision by the Court of Federal Claims this week just may qualify. The decision is noteworthy not so much for the legal issues at stake, which are rather run-of-the-mill, as for the practical consequence: in light of the decision, the General Services Administration (“GSA”) will rescind all 81 small business awards totaling $15 billion that it had made under its Alliant 2 Small Business (“Alliant 2 SB”) vehicle. The dollar value of the contracts, the sheer number of awardees affected, and the time and money implicated in the initial competition on the forthcoming re-compete make this one of the more impactful bid protest decisions in recent memory.
The GSA unveiled the Alliant 2 vehicle in 2016 as a next-generation IT services government wide acquisition, indefinite delivery / indefinite quantity contract (“GWAC IDIQ”) following the expiration of its 2007 Alliant contract vehicle. The Alliant 2 solicitation included two contracts: a $50 billion version open to all vendors and a $15 billion, 10-year version for small business contractors. As a GWAC IDIQ, agencies across the government could issue task orders against the Alliant 2 SB and any small business that was able to get a spot on the vehicle was looking at a potentially very lucrative future.
Citizant, Inc. submitted a proposal but was not selected for inclusion on the Alliant 2 SB. Following its rejection, Citizant protested at the Court of Federal Claims in June, 2018. Ultimately, the Court found a number of errors in the GSA’s conduct of the procurement and the ultimate award decision. The errors found by the GSA include: 1) the GSA awarded two offerors points for having a compliant Cost Accounting System (“CAS”) when, in fact, their accounting systems had not been audited and determined compliant by the Defense Contract Audit Agency (“DCAA”); and 2) in determining the fairness and reasonableness of two offerors’ prices, the GSA mis-compared those prices with the prices of other offerors.
Perhaps the most interesting aspect of the Court’s decision was on the issue of prejudice. For any protester to prevail it must show that it was prejudiced by the government’s errors in the conduct of the procurement. In this case, the Court extended its precedent that holds that when the government has acted arbitrarily and capriciously, prejudice to the protester is presumed and the government must rebut the presumption by showing that even though it acted arbitrarily and capriciously the protester was not harmed. By contrast when the government merely violates a procurement law but acts without arbitrariness or caprice then the protester bears the burden of showing that it was prejudiced by the government’s violation of the law.
Here, the Court found numerous instances of the government acting arbitrarily and capriciously and so presumed that Citizant had been prejudiced. However, the Court found that even without the presumption, Citizant could establish that it had been specifically prejudiced by the government’s actions. To wit, but for the specific errors committed by the government Citizant had a “substantial chance” of being included amongst the 81 awardees.
This case goes to show that protests can and do pay off—the Court has ordered the GSA to re-evaluate offerors proposals. Based on the facts we learned from the case, it is likely the re-score will result in an award to Citizant.