As you may have heard, the Washington Business Journal has decided to discontinue the Fed Biz daily email newsletter (see here). Unfortunately for us, that also means discontinuance of “Battle Lines”, the weekly guest blog by MWL partner Bill Welch. So, although we may find a new home for Battle Lines, for now we’ll share updates on our own MWL Blog.

In this week’s update, we learn that although most protests are very fact-dependent and do not depend on legal or procedural issues in order to be resolved, one case from the U.S. Court of Federal Claims, shows how legal, procedural issues can influence the outcome of a case and provide substantive protection to a protester.

Protesting contractor: Raytheon Company

Contracting agency: Department of the Air Force

Protest issue: What legal standard must the Court apply in deciding the merits of this protest?

Decision: Protest denied.

Post-mortem: This is an Air Force procurement for an updated Three Dimensional radar system to replace its existing AN/TPS-75 radar system. The procurement involved Raytheon, Lockheed Martin Corporation, and Northrop Grumman Systems Corporation. After many phases and several years of complicated technical evaluations, the award eventually went to Raytheon. Both Lockheed and Northrop filed bid protests of the award decision at the GAO. One of the ultimate issues in the GAO protest was the Agency’s interpretation of a contract clause requiring cost reductions for independent research and development costs (IR&D).

The interpretation of the IR&D clause proved decisive in the GAO protest. According to Northrop, the Air Force had changed its understanding of the IR&D clause and failed to inform Northrop of this change during discussions. Following a GAO hearing, the GAO attorney advised the Air Force that it expected to sustain the protest on this ground. In response, the Air Force decided to take corrective action and re-open the competition, explaining to all its understanding of the IR&D clause. The Air Force advised the GAO that “in accordance with guidance from your office, the Air Force has decided to take corrective action.” The Air Force did not elaborate on any additional reasons for its decision. The GAO then dismissed the protest.

Shortly thereafter Raytheon advised the Court of Federal Claims that it would protest the Air Force’s corrective action. Where the Agency relies on the GAO determination to support its decision for corrective action, the Court will usually examine the reasonableness of the GAO’s underlying decision. But, if the Agency’s decision is based on separate findings apart from the GAO’s recommendation, then the analysis can shift from the GAO’s recommendation to the Agency’s separate findings. In this case, the Air Force prepared very detailed separate findings in a document completed 10 days after the decision to take corrective action. One of the issues in this case is whether the Court must dig into the GAO’s decision, which can sometimes be sparse without a written opinion, or rely just on the Agency’s detailed analysis. This procedural question was one decisive issue in the Court’s opinion. The final answer turned on when the Air Force’s document was prepared.

There is a well know principle in bid protest law that an Agency’s decision must be based on the documents present in front of the Agency at the time the decision is made – contemporaneous documentation. Any documents prepared after the fact, are often prepared in the heat of a protest and may not accurately reflect the thinking of the Agency at the time the decision is made. Often both the Court and the GAO will dismiss or strike these after-the-fact documents as inherently unreliable. The Court in this case found that the document, even though prepared 10 days after the decision, might not have reflected the Agency’s decision at the time because it was prepare after notice that Raytheon intended to protest the corrective action at the Court. The Court then struck the document from the record.

This requirement to rely on contemporaneous documentation provides a very important protection to the protester. We can all think of better and more elaborate justifications for our actions after we have already made the decision to act. But the Court’s and GAO’s principle is: what did the Contracting Officer know at the time the decision was made and was that decision reasonable at the time. This provides an important procedural and substantive protection to the protester against any after-the-fact rationalization of its previous decision. The Court did make the right decision in this case, discarded the Air Force’s after-the-fact defense, and then shifted its focus to review the underlying GAO opinion.