By Edward W. Bailey,
A recent decision by the United States Court of Appeals for the Federal Circuit has expanded restrictions on government contractors’ ability to conduct post-award protests. In Inserso Corp. v. U.S., the United States Defense Information Systems Agency (“DISA”) posted a solicitation, titled Encore III, for the opportunity to sell information technology services to various federal government agencies. Encore III was split into a “full and open” competition and a competition reserved for small businesses. While qualifying bidders could submit offers in both competitions, the protester, Inserso Corporation (“Inserso”), only submitted a bid in the small business competition.
Importantly, while both competitions required proposals to be submitted on the same date, bidders on the full and open competition were notified of their award status nearly a full year prior to those on the small business competition. Thus, through the de-briefing process of the full and open competition, contractors who submitted bids in both competitions became privy to information that their competitors in the small business competition did not have – e.g., the total evaluated price for all full-and-open awardees and information surrounding DISA’s evaluation methodology.
After not receiving an award in the small business competition, Inserso filed a protest in the Court of Federal Claims arguing that the imbalance of information created an unlawful competitive disadvantage. The court rejected Inserso’s protest, finding that, despite any alleged competitive disadvantage, Inserso was not prejudiced by DISA’s award process.
Inserso then appealed to the Federal Circuit which also found in favor of the government but on different grounds. Specifically, citing the well-known rule established in Blue & Gold Fleet, L.P. v. U.S. that prohibits post-award protests of patent ambiguities, the Court noted that if a bidder on a government contract “exercising reasonable and customary care would have been on notice of the now-alleged defect in the solicitation long before the awards were made”, it forfeits its right to protest. Thus, the court determined that if Inserso “had taken reasonable care”, it would have been aware of the potential for its competitors to gain an unlawful advantage many months prior to discovering its award-status on the small business competition.
In light of the court’s holding in Inserso, government contractors can no longer assume their right to reserve grounds for protest, other than patent ambiguities, until after they are notified of their award-status – i.e., if you see something, say something.
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