Can we protest our own contact win?

The answer to that question isn't as simple as it seems as one case recently decided by the U.S. Court of Federal Claims offers a Catch-22 situation for government contractors.

As an in-house attorney for a government contractor, I get some unusual questions like the one in the headline above.

Based on a recent U.S. Court of Federal Claims decision, the answer is: No.

The case is Trailboss Enterprises, Inc. v. the United States, Fed. Ct. Claims, 1:13-cv-00296-NBF (June 18, 2013). Trailboss Enterprises bid on an Air Force contract for aircraft maintenance and operations. The solicitation required bidders to hold their prices firm for 90 days after the final receipt of offers.

Trailboss won the contract, which another company promptly protested. After several months’ delay, the Air Force agreed to take corrective action and the initial protest was dismissed.  However, before Trailboss could commence work, another bidder filed a protest, leading to several more months’ delay.

Trailboss had notified the Air Force that, because of the passage of time, it could no longer perform at the original proposed price, and that to hold Trailboss to its pricing so long after the expiration of the 90-day firm period would be “arbitrary, capricious and an abuse of discretion.” When the Air Force indicated that Trailboss would have to perform at the original prices, Trailboss filed its own bid protest with the Court of Federal Claims.

The court dismissed Trailboss’ protest, saying that it [the court] lacked jurisdiction. The court noted that to have jurisdiction over the protest, Trailboss had to be an “interested party.” And to be an “interested party,” Trailboss would have to be an “actual or prospective bidder” and would have to show direct economic interest in the contract award. The court decided that Trailboss, as an awardee, could not be an “actual or prospective bidder.”

Trailboss, however, is not entirely without a remedy. The court noted that Trailboss may pursue its claim as a matter of “contract administration” under the Contract Disputes Act (CDA).  Unfortunately for Trailboss, it likely would have to perform the contract at its original prices while it pursued its CDA claim.

The court left the door open to a bid protest, suggesting in a footnote that if Trailboss was concerned about performing at the originally proposed prices, “it could have properly challenged the terms of the solicitation prospectively as a pre-award protest instead of disputing the price terms of the contract that it had already won.” Interesting!

So, the contractor has to protest before award—at a point in time where it has no idea whether the award will be protested or whether performance will be delayed beyond its 90-day pricing. Most contractors would agree that this is not a good basis for a protest, and will only lead to strained relations with the customer.

It seems that after this decision, when a contractor is faced with a significant delay in performance, its best hope is to pursue a claim under the CDA while it performs at the original pricing. Protesting your own award? Probably not!

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