Protest Case Study

We recently won a protest for our client in the action ALLICENT TECHNOLOGY, LLC v. USA, et al., 1:22-cv-01380-EHM.  This protest addressed a solicitation by the Department of Commerce for enterprise-wide IT services.  The solicitation was for a multi-award indefinite delivery, indefinite quantity contract with a potential duration of 10 years and a maximum order of $1.5 billion.  Commerce initially intended to award between 15 to 20 contracts.

Eighty seven offerors made initial submissions, and after awards were made, thirteen offerors protested Commerce’s decision.  Four offerors, including our client, won their protest, resulting in a permanent injunction against the agency from issuing any task orders unless the agency reevaluated their submissions.

This protest was unique because of the number of parties protesting, as well as the number of parties intervening.  The significant dollar amounts at issue, as well as the number of IT companies qualified to perform the contract, created strong incentives for companies to protest.  The delay (and the potential of having more competitors for individual task orders) incentivized awardees to intervene as well.

To adequately address all of the arguments, the court issued an opinion of over 100 pages.  There are a number of lessons that we can share from this case.[1]

First, the government provided itself with significant flexibility in making awards when it established as criteria that “a combination of Significant Weaknesses that represents a material failure to meet requirements” was disqualifying.  This provided protestors an opportunity to win a protest they might not otherwise.  The government had to concede that “if any of the significant weaknesses are knocked out, then it needs to go back to the Agency for reevaluation based on the criteria established by this Court . . . .”  A flexible standard for Commerce compelled the court to order a reevaluation even in the case of a minor error on Commerce’s part.  In other words, it significantly lowered the barrier for prejudice compared to protests on more concrete criteria.

Second, sometimes what appears to be the weakest argument when you are drafting can carry the day.  Received wisdom among lawyers is that you should focus on your strongest arguments, and while this is often true, it is not always the case.  One situation in which the opposite may apply is when there are a number of different parties.  Each party will raise different arguments and the same arguments in different ways.  Sometimes, this will unexpectedly strengthen arguments that seemed weak in previous strategy discussions.  It is of course important that the lawyers are flexible enough at oral argument to take advantage of these situations.

Third, courts will be highly differential to agency decisions (see point 2, above), but agencies will often state things in absolutes.  As an example, when the agency says a plaintiff “did not provide an approach”, a court has room to find for the plaintiff if there is any approach in the proposal, no matter how the government attempts to characterize that approach at oral argument.  This provides a path around the deference that courts owe to agency decisions.

As the government continues to spend ever more money on government contracts, protests will proliferate and become more complicated.  It is critical that protestors select law firms that have experience in these situations.

[1] These observations are based on the publicly available court opinion and thus do not implicate the protective order.  Also, they are not limited to our client’s circumstances.