Justice can be expensive

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Justice can be expensive

There is an oft-quoted saying that if you think talk is cheap, you haven’t talked to a lawyer. Retaining an attorney can be expensive, but in a bid protest it is absolutely required if you hope to be successful. A popular question therefore is this: Can I get the money I spend on pursuing this case back if I win?

Protesting contractor: Marine Design Dynamics Inc. D.C.

Contracting agency: Department of Navy

Protest issue: Whether contractors have a right to recover legal fees

Decision: Request for costs granted in part and denied in part by the Government Accountability Office July 3, 2013.

Post-mortem: There is an assumption that when a protestor is successful in showing that the government failed to follow the law, they will get their protest costs reimbursed. Decisions in the past couple of weeks show that’s not always the case.

The first case released was the request for reimbursement of protest costs by Rite-Solutions Inc. of Middletown, R.I. After not winning the contract, Rite filed a protest alleging that the Navy had engaged in unequal discussions and had not properly evaluated the awardee’s proposal. GAO informed the Navy that it would likely find that the Navy had engaged in unequal discussions, and as a result the Navy took corrective action. In response to its request for costs, the GAO found that the protest regarding unequal discussions was clearly meritorious and an award of costs was appropriate. However, the protest of the evaluation of the awardee was “not clearly intertwined with [Rite’s] protest that discussions were not equal” and costs for that protest ground were denied.

The second case decided was that of the request for reimbursement of protest costs by The Argos Group LLC of D.C. Argos had filed a protest challenging the terms of a General Services Administration solicitation for lease of space for the FBI in Hudson Valley, N.Y. The protest was sustained and Argos was awarded protest costs. Argos then claimed an unreasonable number of attorney hours, including claiming 70 hours in preparing a “protest that was only two pages long, and raised a single, straightforward issue.” In denying the request for the unreasonable costs the GAO reminded contractors that an award of costs is “not intended to be a windfall, a reward, or a penalty against the government.”

The last case decided was of a request for reimbursement of protest costs filed by Marine Design Dynamics Inc., also of D.C. Marine filed a protest against the Navy alleging multiple protest grounds. Like it had in Rite, the GAO informed the Navy that it would find that the agency had failed to properly conduct market research to determine whether there were small businesses capable of performing the work. Marine argued that it should be reimbursed for all costs while the Navy argued that it should not be required to pay any costs, even though it did not take corrective action until it learned protest would be sustained. But again, like Rite, the separate protest issues were not clearly intertwined.

As I have written before, the system is established to dissuade contractors from protesting. Part of that dissuasion is by making it possible to deny the costs of protesting even when it is shown that the government failed to follow the law. The lesson? Contractors must have a serious discussion about costs with their attorney before filing a protest and accept that, in a bid protest, justice might be expensive.