THE KEY CASE LAW RULES BROKEN DOWN BY PROTEST GROUND

CHAPTER 1
Protest Grounds Alleging That the Government Is Wrongfully Preventing Competition

1. LACK OF ADVANCE PLANNING

Overview of This Protest Ground: Protests often arise when a company wants to compete for a particular government requirement but the government has awarded a sole-source contract to a competitor or has otherwise failed to open the requirement up for competition. Sometimes these types of protests are filed against a modification to a contract that a protester believes is “outside the scope” of the awarded contract and, in its view, circumvents competition in violation of the Competition in Contracting Act (CICA).

Although there are legitimate and supportable reasons for the government to enter into sole-source (or limited-sources) contracts, the government is not allowed to circumvent competition because it failed to plan adequately for a competitive procurement. This statutory prohibition is set out at 41 U.S.C. § 3304(e)(5)(A)(i): “In no case may the head of an agency… enter into a contract for property or services using procedures other than competitive procedures on the basis of the lack of advance planning….” For DOD this statutory prohibition is codified at 10 U.S.C. § 2304(f)(4)(A), which uses the same operative language.

COFC’s Key Language

CICA provides that sole-source procurements may not be used when the circumstances justifying the award were due to the agency’s own lack of advance planning. 10 U.S.C.A. § 2304(f)(4)(A); FAR 6.301(c)(1). To the extent that the [agency] justifies its sole-source award to [the awardee] on “the short time line” available to properly research responsible sources for [this] contract, this justification violates CICA. The time-frame for the award of this bridge contract was, on the record before the court, entirely the result of a lack of advance planning on the part of the [agency].

Innovation Development Enterprises of America, Inc. v. United States, 108 Fed. Cl. 711 (2013).

GAO’s Key Language

An agency using the urgency exception may restrict competition to the firms it reasonably believes can perform the work in the available time so long as the agency did not create the need for the sole-source award from a lack of advanced planning. 10 U.S.C. sect. 2304(f) (5)(A).

Major Contracting Services, Inc., B-401472, Sep. 14, 2009.

Under CICA… contracting officers have a duty to promote and provide for competition and to provide the most advantageous contract for the government. In their role of promoting and providing for competition, contracting officials must act affirmatively to obtain and safeguard competition; they cannot take a passive approach and remain in a noncompetitive position where they could reasonably take steps to enhance competition…. CICA further provides that under no circumstance may noncompetitive procedures be used due to a lack of advance planning by contracting officials…. Although the requirement for advance planning is not a requirement that such planning be successful or error-free, the advance planning must be reasonable.

eFedBudget Corporation, B-298627, Nov. 15, 2006.

Turning to the propriety of the sole-source bridge contract with [the awardee], we first find that the sole-source award was improper because it is not supported by a written J&A. In this regard, when an agency uses noncompetitive procedures, such as 41 U.S.C. § 253(c) (1) (2000), which authorizes the use of noncompetitive procedures when the property or services are available from only one responsible source, the contracting officer is required to execute a written justification with sufficient facts and rationale to support the use of the authority, certify its accuracy and completeness, and obtain approval of the action from the cognizant agency official prior to making an award. See 41 U.S.C. § 253(f)(1)(A), (B), (C); Federal Acquisition Regulation (FAR) §§ 6.303, 6.304…. Here, the agency did not execute a J&A prior to awarding the letter contract, as required by the statute…. Thus, the agency’s letter contract award to [the awardee] constitutes an improper sole-source award.

VSE Corporation, B-290452.3, B-290452.4, B-290452.5, May 23, 2005.

FAR Crosswalk: Definition of “acquisition planning” at FAR § 2.101; FAR Part 6 generally and FAR § 6.301(c) in particular; FAR Part 7, Acquisition Planning; and FAR Part 10, Market Research.

Other Relevant Cases: See page 289 in the Index of Representative Cases.

Commentary: Overall, this is a risky area of protest for the government for the simple reason that sometimes the government fails to plan in advance for competition as required by the law. Furthermore, this is an area where the COFC and the GAO will closely examine the government’s rationale in support of the noncompetitive contracting action. Often, the government has a justifiable reason for the noncompetitive contracting action but fails to adequately document that reasoning in the Justification and Approval (J&A) document for the noncompetitive acquisition or fails to publish one at all. (Failure to document procurement decisions adequately is a common problem that makes it difficult for the government to defend against several different protest grounds). Even when advance planning was lacking, however, the government’s requirement for the goods or services usually remains and government officials often see little choice but to proceed with a sole-source contract or a potentially out-of-scope modification to an existing contract. If there are no legally sufficient contracting options available, the alternative is to simply stop the work—a decision that the government is often loathe to make. If a contracting action proceeds in these situations, the chances of a protest’s being sustained are high.

The COFC and the GAO will take a close look at the government’s reasons for circumventing competition. This is very much a case-by-case (fact-specific) analysis, but due in part to CICA’s requirement for the government to execute a J&A in support of a sole-source (or limited-sources) procurement, the burden is on the government to show why it was not able to set up at least a limited competition for the goods or services it is seeking. Under CICA, the government has an affirmative obligation to make the effort to obtain competition, unless a valid exception to CICA applies. A recent review of DOD contracting by the GAO found that in FY2012, DOD cited “only one responsible source” for a significant majority of the dollars that were obligated under any CICA exception.

A review of the case law shows that the GAO and the COFC will examine the J&A to see if the proffered justifications are reasonable or if the government is taking a passive stance and improperly allowing the requirement to remain in a noncompetitive posture. In this regard, the GAO and the COFC will examine the length of time that the agency was aware of the fact that a particular requirement would need to be sole-sourced as well as any actions the government took to move toward competition.

The importance of a well-written J&A cannot be emphasized enough; the government cuts corners on the J&A at its own risk. The GAO and the courts expect the J&A to be a stand-alone document that fully describes the contemporaneous reasons supporting the government’s use of the specified CICA exception. The GAO and the courts find ex post facto explanations (usually asserted for the first time in heat of protest litigation) to be less persuasive. Furthermore, the GAO and the courts want to see the actual steps the government has taken to move the challenged procurement into a competitive posture. These forums pay little attention to government “lip service” regarding competition unless the agency can point to concrete steps it has taken to move the requirement into a competitive posture. In other words, the GAO and the courts are seldom persuaded by the fact that the government is “assessing” the possibility of competition or “considering” moving the requirement toward a competitive posture.

Agencies are wise to ensure that the J&A is well written and thoroughly documented. Agency contracting offices should have plenty of well-written J&A templates on hand to serve as models. (The Army, as an example, sets out a specific J&A template at Section 5153.9005 of the Army FAR Supplement.) This is an area where attorneys and supervisory contracting officers should be heavily involved in the quality control process for the J&A to ensure that it comports with CICA and addresses the concerns raised in the COFC and the GAO cases. Essentially, the J&A should clearly tell the story that led to the need for the noncompetitive contracting action.