When a contractor decides to file a bid protest to challenge the award of a federal construction project to another contractor, there are three options for where to file the bid protest: (1) at the agency level, (2) the Government Accountability Office (“GAO”), or (3) the United States Court of Federal Claims. There are strengths and weaknesses associated with each of the above options. Many contractors like to file their bid protest with the GAO because it is a relatively inexpensive way to obtain a quick, independent determination regarding the merits of the bid protest. One significant weakness, however, is that the agency may decline to implement the GAO’s recommendation.
For example, in Caddell Constr. Co., Inc., B-411005.1, B-411005.2, Apr. 20, 2015, 2015 CPD ¶ 132 (Caddell 2015), the GAO sustained a construction contractor’s protest regarding the prequalification of a competitor to bid on the construction of an embassy. Under the pertinent statute, a contractor could not be prequalified unless the contractor had achieved total business volume equal to or greater than the value of the project being bid in three years of the five-year period before issuance of the solicitation for the project. The protestor contended that two contractors should not have been prequalified because the annual revenue for each contractor did not equal the value of the project for three of the previous five years. The Department of State argued that the contractors were eligible because three years of a contractor’s receipts could be aggregated to achieve the required minimum business volume. Ultimately, the GAO agreed with the protestor’s analysis and sustained the protest.
Despite the GAO finding in favor of the protestor, however, the Department of State declined to implement the GAO’s recommendation. The Department of State contended that the GAO’s decision was inconsistent with precedent from the United States Court of Federal Claims; thus, it would not implement the GAO’s recommendation. It may come as a surprise, but this is allowed under the applicable rules.
Bottom Line: While the GAO is typically a cost-effective way for a contractor to protest the award of a construction contract, one should always keep in mind that the federal agency has the option of not implementing the GAO’s recommendation. Although an agency’s decision not to implement a GAO recommendation is rare, it is a good example of how one can “win” a bid protest, but still lose.