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May 16, 2022 - Federal Procurement

April 2022 Bid Protest Spotlight: Late-Is-Late, Party Interest, Timeliness

GAO Finds CIO-SP4 Solicitation Is Unduly Restrictive of Competition

This month’s Bid Protest Roundup examines three recent decisions by the U.S. Government Accountability Office (“GAO”) and the Court of Federal Claims (“COFC”). The first two protests involve late proposal submissions both at the GAO and at the COFC, and the third involves establishing interested party status and timeliness. 

FreeAlliance.com, LLC v. United States[i]

We have written before about the GAO’s strict rules for late proposals and have noted that the COFC is often more forgiving. In the protest of FreeAlliance.com, LLC v. United States, however, the court took a page from the GAO’s book and upheld the agency’s application of the “late is late” rule.

In late 2020, the Internal Revenue Service (“IRS” or “Agency”) issued a solicitation for a single‑award Blanket Purchase Agreement. The acquisition was to be conducted utilizing a multi-phased down select approach. Following a round of corrective action, the Agency issued an amendment to the solicitation advising Phase 2 participants of the new deadlines for questions and revised quotations. The Agency informed vendors that if responses were not received by the January 19, 2022 deadline, the vendor would be considered nonresponsive and removed from consideration for award. Shortly thereafter, the Agency issued a “clarification statement” to the amendment, extending the quotation deadline by two days to January 21, 2022, at 12:00 p.m. EST. 

On January 21, 2022, at 11:51 a.m., FreeAlliance.com, LLC (“FreeAlliance”) attached its revised quotation to an email to the contracting specialist. FreeAlliance did not receive a delivery receipt, so an employee sent the Agency a “test message” at 12:03 p.m. to determine whether the earlier message had been received. The contracting specialist responded to FreeAlliance’s test message at 12:10 p.m., confirmed that the email did not contain any attachments, and instructed FreeAlliance to zip the attachments or send in separate emails. At 12:15 p.m., FreeAlliance resent its quotation in a zip file to everyone copied on the contracting specialist’s email, including the contracting officer. At 3:00 p.m., FreeAlliance emailed the contracting specialist and requested confirmation of receipt and evaluation of its quotation. In response to FreeAlliance’s email, the contracting specialist asked the Agency’s IT department to determine the exact time FreeAlliance’s 11:51 a.m. email was received by the IRS servers.

The IRS confirmed that FreeAlliance’s email reached its servers at 12:06 p.m. – six minutes past the deadline set forth in the clarification statement to the amendment. The contracting specialist emailed FreeAlliance to inform the company that because its revised quotation was received after the time stated in the Solicitation and in accordance with the “late is late” rule, FreeAlliance was thus ineligible for award. FreeAlliance then filed a protest at the COFC. 

FreeAlliance challenged the Agency’s decision in two respects. First, FreeAlliance argued the “late is late” rule was inapplicable because the original Solicitation did not include a late proposal submission and the amendment did not incorporate any explicit “late is late” provisions from the Federal Acquisition Regulation (“FAR”). FreeAlliance suggested that because the late quotation prohibition appeared on page one of the amendment and stated that the solicitation is “revised as identified on the following pages,” only pages two through five actually modified the solicitation. The court found this argument unconvincing because, when read in its entirety, the Agency clearly intended all pages of the amendment to modify the Solicitation. The court also concluded that, although the original solicitation did not include a proposal deadline and the amendment did not include a specific FAR timing provision, the amendment was enforceable on its terms.

Second, FreeAlliance argued the Agency’s decision not to waive the quotation deadline was arbitrary and irrational because the Agency had the authority to waive the deadline as a minor informality. The court disagreed because that authority only applies in procurements governed by FAR Parts 12 and 15 and this was a FAR Part 8 procurement. Accordingly, the Agency’s decision to enforce the terms of the solicitation and reject FreeAlliance’s submission as late was rational. 

Takeaway: This case reiterates the importance of submitting proposals with ample time to account for technological glitches delaying transmission of your proposal. We are also reminded that where the solicitation and any of its amendments provide an explicit deadline for proposal submission, even the court will enforce the “late is late” rule. 

VERSA Integrated Solutions, Inc.[ii]

Unlike the COFC, which has adopted certain exceptions to the “late is late” rule (none of which applied in FreeAlliance.com v. United States), the GAO has maintained a strict approach to late proposal submissions. Indeed, when presented with an express opportunity (or rather, a request) to revise this approach, the GAO has declined to do so. 

In the protest of VERSA Integrated Solutions, Inc., the Department of Health and Human Services (“HHS” or “Agency”) issued a Request for Proposals (“RFP”), which provided for the submission of proposals in two parts. Part one proposals were to be submitted electronically to the contract specialist with a courtesy copy to the contracting officer by November 12, 2021, at 12 p.m. EST. The RFP also incorporated FAR 52.212-1(f), which provides that any offer received at the Government office designated in the solicitation after the exact time specified for receipt of offers is considered late and will not be considered for award unless it is received before award is made, the contracting officer determines that accepting the late offer will not unduly delay the acquisition; and

(A) If it was transmitted through an electronic commerce method authorized by the solicitation, it was received at the initial point of entry to the Government infrastructure not later than 5:00 p.m. one working day prior to the date specified for receipt of offers; or    
(B) There is acceptable evidence to establish that it was received at the Government’s installation designated for receipt of offers and was under the Government’s control prior to the time set for receipt of offers.

48 C.F.R § 52.212-1(f)(2)(A)-(B). 

On November 12, 2021, the Agency received 20 part one proposals. On January 24, 2022, the Agency concluded its evaluation of proposals and sent advisory notifications to the 20 offerors. On February 8, 2022, a representative from VERSA Integrated Solutions, Inc. (“Versa”) contacted the contracting officer for an update on the status of its proposal. The contracting officer informed Versa that it had not received its part one proposal submission. Versa sent the Agency a series of trace logs from its server, showing that it had submitted its proposal to the Agency well in advance of the deadline. While the Agency’s IT personnel worked to verify whether Versa’s proposal made it to the Government servers, Versa filed a protest with the GAO. It was then discovered that Versa’s part one proposal was received prior to the submission deadline but quarantined by the Agency’s server and not received by either the contracting officer or the contract specialist.

Versa argued the Agency’s rejection of its proposal was unreasonable because Versa submitted its part one proposal before the deadline and the Agency was in control of the proposal following submission. Most notably, Versa acknowledged that the GAO has previously considered and rejected the application of the “government control” exception in Sea Box, Inc., B-291056, Oct. 31, 2002, 2002 CPD ¶ 181. In its protest, however, Versa requested the GAO use this case as an opportunity to revisit its prior decision. The GAO declined to overturn its decision in Sea Box and explained that FAR 52.212-1(f)(2)(i)(A) applies to proposals submitted by electronic means and only permits a late proposal to be considered when it was received at the initial point of entry no later than 5:00 p.m. the preceding working day. The GAO further noted that if it were to consider electronically submitted proposals as eligible under FAR 52.212‑1(f)(2)(i)(B), regardless of whether they were received by 5:00 p.m. the day before the proposal due date, FAR 52.212-1(f)(2)(i)(A) would ultimately be rendered null. 

Accordingly, because Versa’s proposal did not arrive to the initial point of entry by 5:00 p.m. one working day prior to the deadline, in accordance with FAR 52.212-1, the GAO concluded that the Agency properly rejected Versa’s proposal. 

Takeaway: Where FAR 52.212-1 is included in the solicitation and proposals are to be submitted electronically, it is in the contractor’s best interest to submit its proposal by 5:00 p.m. one working day prior to the proposal submission deadline. If this is not possible, we recommend requesting confirmation of receipt of the proposal with enough time to allow resubmission if necessary. This protest is also yet another reminder of GAO’s strict adherence to the “late is late” rule, so it is best to avoid these types of protest arguments at all costs.

U.S. Marine Management, Inc.[iii]

Our final protest for this month’s Bid Protest Roundup covers interested party status and timeliness, both of which are critical to achieving a successful protest.

In U.S. Marine Management, Inc., the Department of the Navy (“Navy” or “Agency”) issued an RFP under FAR Part 12, using the negotiated procurement policies under FAR Part 15, for a time charter of an ice-glass tanker vessel. The RFP included FAR 52.212-1, which allows an offer to be withdrawn by written notice that is received at any time before the exact time set for the receipt of offers.

Marine Management, Inc. (“Marine Management”) submitted three proposals in response to the RFP, each proposing different vessels. The Agency engaged in discussions with Marine Management from August 12, 2021 through August 26, 2021. On September 7, 2021, Marine Management submitted one revised proposal, reaffirmed another proposal without revisions, and withdrew its third and final proposal. On November 3, 2021, the Agency notified Marine Management that, although its third proposal was ultimately withdrawn, it had been included in the competitive range. Marine Management’s remaining proposals – the ones it did not withdraw – were excluded from the competitive range.

After the conclusion of discussions, the Navy set a date for final proposal revisions; Marine Management did not submit any final revised proposals. On December 23, 2021, the Navy informed Marine Management that it did not receive the tanker charter contract. The Notice of Award informed unsuccessful offerors of their right to request a debriefing, so Marine Management requested and received a debriefing for the proposal it withdrew. After receiving the Agency’s responses to Marine Management’s debriefing questions, Marine Management submitted the subject protest to the GAO, arguing the Agency relaxed or waived solicitation requirements for the awardee and that the awardee’s technical and price evaluation was unreasonable. 

The Agency submitted a motion to dismiss the protest, arguing in part that Marine Management is not an interested party because its proposals were either withdrawn or excluded from the competitive range. Marine Management responded that it was an interested party because the procurement errors alleged warrant the cancelation and resolicitation of the contract. The GAO was not convinced. The GAO explained that if it sustained Marine Management’s challenges to the awardees’s technical and price evaluation, the recommendation would be for the Agency to reevaluate proposals and make a new award decision. Such recommendation, however, would not involve consideration of any of Marine Management’s proposals because, as discussed, two of Marine Management’s proposals were excluded from the competitive range and one was withdrawn. Thus, if the GAO sustained Marine Management’s challenges, Marine Management would neither be next in line for award nor would it be able to submit a revised proposal. Accordingly, the GAO found that Marine Management did not qualify as an interested party to challenge the Agency’s technical and price evaluation of the awardee’s proposal.

The Agency also argued that Marine Management’s protest was untimely because it was filed more than 10 days after Marine Management learned of the basis for its remaining protest ground. The Agency explained that Marine Management’s post-award debriefing was not required and was instead a courtesy that did not toll the 10-day period to file a protest. The GAO agreed, finding that because Marine Management withdrew its proposal in accordance with FAR 52.212-1, Marine Management was not considered an unsuccessful offeror entitled to a post-award debriefing. With that, the GAO analyzed the timeliness of Marine Management’s protest without the debriefing exception and determined that Marine Management’s protest was untimely.

Takeaway: This protest is a reminder that contractors must overcome various jurisdictional hurdles before the GAO will hear its protest on the merits. Both interested party status and timeliness are key to achieving a sustained protest and should be analyzed carefully before pursuing a protest. 

[i] FreeAlliance.com, LLC v. United States, No. 22-132C, 2022 WL 1231248 (Fed. Cl. Apr. 22, 2022).

[ii] VERSA Integrated Solutions, Inc., B-420530, Apr. 13, 2022, 2022 WL 1165978.

[iii] U.S. Marine Management, Inc., B-420268, Apr. 14, 2022, 2022 WL 1184093.