Bid protests at all levels require quick action on the part of disappointed offerors.  Generally, protests through the Government Accountability Office (GAO) must be filed within ten calendar days after the basis of the protests is known (or should have been known), and, where a debriefing is requested and required, the protest has to be filed no later than ten calendar days after the debriefing.  4 C.F.R. § 21.2.  Importantly, the protest must be filed within five calendar days of the debriefing to obtain an automatic stay of contract performance pending the GAO’s decision.  31 U.S.C. § 3553(d)(4)(B); FAR § 33.104(c).  Deadlines for state and local bid protests also vary, some requiring offerors to protest agency decisions in even less time.  For example, in Colorado, an offeror must protest an agency decision within seven days.  C.R.S. § 24-109-102(1).

In contrast, it is generally understood that the Court of Federal Claims (COFC) provides a forum for bringing protests outside the GAO’s tight deadlines, since the jurisdictional legislation enabling the COFC to hear protests does not contain any specific time limits  See, e.g., Heritage of America, LLC v. U.S., 77 Fed.Cl. 66, 72 (2007).  But as a recent COFC opinion illustrates, this flexibility is not without limits, and offerors must nevertheless diligently pursue their claims with the COFC or risk losing them.

In National Telecommuting Institute, Inc. v. U.S., Peckham Vocational Industries, Inc. and SourceAmerica, U.S. Court of Federal Claims No. 15-293C (October 28, 2015), National Telecommuting Institute, Inc. (NTI) timely submitted multiple agency-level protests and appeals of the U.S. Department of Agriculture’s (USDA’s) award to Peckham for IT helpdesk services support.  The commission administering the applicable program ultimately sustained NTI’s appeal of the agency award and remanded the case for re-solicitation.

After issuing a second solicitation, the contract was again awarded to Peckham and NTI immediately initiated another agency appeal, again ultimately appealing to the commission overseeing the program.  The commission denied NTI’s appeal on May 29, 2014, exhausting NTI’s agency appellate review.  On August 15, 2014, the USDA published the contract award on the Federal Register to be awarded on September 15, 2014.  NTI did not initiate its bid protest with the COFC until March 20, 2015, a few days before Peckham was supposed to assume full responsibility for contract performance.

Peckham asserted the equitable laches defense, arguing that NTI’s neglect and delay in bringing its protest caused Peckham prejudice, and, as a result, NTI’s claims should be barred.  The COFC agreed, concluding Peckham had made the required showing that there was “(1) unreasonable and unexcused delay by the claimant, and (2) prejudice to the other party, either economic prejudice or defense prejudice.”  Citing A.C. Auckerman Co. v. R.L. Chaides Constr, Co., 960. F.2d 1020, 1032 (Fed. Cir. 1992), the Court held “the defendant bears the burden of establishing that ‘the plaintiff delayed in filing suit for an unreasonable and inexcusable length of time from the time plaintiff knew or reasonably should have known of its claim against defendant’ and that this ‘delay operated to the prejudice or injury of the defendant.’”

Here, the Court noted NTI filed the protest with the COFC “more than six months after the Commission finalized the award to Peckham, more than eight months after NTI exhausted its administrative appeals, and more than a year after [the program] announced the outcome of [the solicitation].”  The Court noted “a plaintiff cannot sit on his rights in bringing a bid protest while the Government moves forward with a contract.”  NTI argued that it was attempting to resolve the dispute with the agency in the interim to avoid costly litigation and that it should not be penalized for any delay.  The Court was not persuaded.  Although it believed NTI’s claims, it held that NTI, by relying on alternative, less costly methods to resolve its dispute, it “simply chose to put all its eggs in one basket – ultimately to its determinant.”  (Quotation and brackets omitted).

After noting the passing of time alone does not constitute laches, the Court concluded the defendants demonstrated sufficient prejudice to Peckham and the government resulting from NTI’s delay.  Both had incurred significant costs in preparing for the contract award and maintaining services while the protest was resolved, “much of which could have been avoided had NTI brought a timely claim.”  Thus, applying the laches doctrine to the case, the Court barred NTI’s claims.  For good measure, the Court also affirmed the agency decision on the merits.

In sum, as compared to commercial litigation, it is important for a disappointed offered to quickly initiate and prosecute its protests, irrespective of the forum it ultimately chooses.

https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2015cv0293-118-0.