Government Contracts: GAO Issues Rare Decision Sustaining Corrective Action Challenge

Jones Day

In Short

The Situation: Challenges to the scope of an agency's corrective action are notoriously hard to win at the U.S. Government Accountability Office ("GAO") because of the high level of deference normally afforded to agencies in crafting corrective action. However, in a recent decision, GAO sustained a bid protest challenging an agency's corrective action, finding that the scope was "unreasonably limited."

The Result: GAO found that the scope of the corrective action was too narrow. The agency allowed proposal revisions to only a limited portion of offerors' proposals, but the solicitation required that proposal sections be consistent with each other. Because changes to one section of the proposal would materially impact other aspects of the proposals that offerors were not permitted to change, GAO found the limitation to be unreasonable.

Looking Ahead: Offerors should remain vigilant when reviewing an agency's proposed corrective action. Even when an agency is justified in restricting discussion responses in corrective action, GAO may sustain a challenge if the agency attempts to prohibit offerors from revising related areas of their proposals that are materially impacted by the permitted proposal revisions.

Winning a GAO protest challenging an agency's corrective action is notoriously difficult. This is because GAO affords broad discretion to agencies to determine what actions are necessary to ensure a fair and impartial competition. But this discretion is not unlimited. For example, GAO has sustained challenges to corrective action where the agency planned to materially change its method for evaluating proposals without amending the solicitation and affording offerors a chance to submit proposal revisions. GAO has also sustained challenges to corrective action where the agency imposed unreasonably restrictive limitations on the scope of proposal revisions.

The Latest Development

GAO's recent decision in Peraton Inc. confirms that agencies do not have unfettered discretion in determining the scope of corrective action. The Peraton case began with a challenge to the award of a task order. The protester alleged, among other things, that the awardee's letters of commitment for key personnel did not meet the solicitation's requirements. In an outcome prediction alternative dispute resolution ("ADR") conference, GAO informed the agency that the protest would likely be sustained. In response, the agency notified GAO that it planned to take voluntary corrective action to correct the evaluation flaws related to the letters of commitment.

In implementing its corrective action, the agency conducted limited discussions and informed offerors that they could make changes to their proposed key personnel. However, offerors who proposed key personnel changes were permitted to make changes only to their key personnel resumes, letters of commitment, and to a column on the staffing plan template labelled "Relevant Years of Experience and Certifications." Peraton argued that these limitations on proposal revisions were unreasonable because changes to the identified areas of the proposals would necessarily impact other areas of its proposal, and that by refusing to permit revisions to other areas of its proposal, the agency was forcing Peraton to submit a proposal that was inconsistent on its face and would not comply with the solicitation's requirement that key personnel and staffing be aligned with an offeror's technical approach.

The Outcome

GAO agreed with the protester that the scope of corrective action was unreasonably limited. In sustaining the protest, GAO noted that even when an agency is justified in restricting discussion responses in corrective action, the agency may not prohibit offerors from revising related areas of their proposals that are materially impacted. In this case, the agency's planned corrective action would prevent the protester from conforming many specific references to key personnel, which would effectively require the protester to submit a materially inconsistent proposal. GAO emphasized that once the agency makes an election to allow proposal revisions, the agency must seek these revisions in a reasonable manner.

Points for Consideration

When reviewing an agency's planned corrective action, offerors should remain vigilant for any information indicating that the scope of corrective action will unreasonably limit their ability to revise the necessary portions of their proposal. If an agency allows limited proposal revisions, but prohibits changes to other parts of the proposal that are affected by the changes, a protest may be necessary. GAO will likely review the solicitation, the evaluation record, and the proposal(s) to determine whether changes to one portion of the proposal will likely have a material impact on other portions of the proposal. GAO will reject unreasonable agency attempts to limit the scope of discussions or proposal revisions.

Two Key Takeaways

  1. Although agencies have broad discretion in taking corrective action, this discretion is not unlimited.
  2. Agency attempts to unreasonably limit the scope of proposal revisions should be challenged through the protest process to ensure offerors have the ability to compete fairly and on an equal basis.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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