“Open and Frank Discussions” or Agency-Level Protest

Government Contracts Newsletter

Client Alert

In Coulson Aviation (USA), Inc., B-411525, B-411525.2, 2015 CPD ¶ 272 the Government Accountability Office (GAO) recently denied a contractor’s protest over the terms of a request for proposals issued by the Department of the Air Force, finding that it was too late to bring a challenge because the contractor previously had expressed its concerns in letters that the GAO deemed to be agency-level protests.

On May 2, 2014, the Air Force issued a request for information seeking vendors capable of providing a fire retardant dispersal system to be used in connection with aircraft that the Air Force planned to modify for use by the Department of Agriculture, Forest Service. As part of this procurement, the Forest Service submitted a request for proposals (RFP) on September 17, 2014, for the design, manufacture, and installation of a 3,500-gallon, gravity-drop aerial fire retardant dispersal system to be used for wildfire firefighting support on seven demilitarized aircraft provided by the Air Force. In its previously issued pre-solicitation notice, the Forest Service advised that, based on the agency’s market research, no conforming item existed in the market, and thus the procurement would take place pursuant to the award procedures of FAR part 15 instead of the commercial item acquisition procedures of FAR part 12.

Coulson Aviation (USA) Inc. sought to challenge the RFP on three main grounds, arguing that (1) the Air Force improperly misused and disclosed its propriety data in the solicitation, (2) the RFP’s requirements were unduly restrictive of competition, and (3) because Coulson believed it carried a commercial item that conformed to the requirements of the RFP, the agency should conduct the procurement in accordance with FAR part 12.

With regard to the third ground, Coulson sent a letter to the Air Force on October 21, 2014, requesting that the agency amend the solicitation to incorporate the commercial items procurement procedures of FAR part 12. The agency responded to this letter on November 10, 2014, denying Coulson’s request. Coulson then sent another letter on November 15, 2014, arguing that the agency’s denial was based on an erroneous interpretation of both FAR part 12 and the capabilities of Coulson’s existing product. Coulson asked the contracting officer to reconsider her position and amend the RFP to incorporate FAR part 12 procedures. The contracting officer responded by denying the request and noting that the agency “will not entertain any further correspondence regarding the pursuit of a FAR Part 12 acquisition strategy.”

Coulson sent a final letter regarding the issue on December 18, 2014, asking that members of the Air Force technical team meet with Coulson to discuss Coulson’s concerns. The contracting officer once again denied this request, indicating that “the government feels that there have been thorough exchanges regarding the issue, and we are left with a fundamental disagreement [and] see no benefit in continuing to revisit the issues.” The contracting officer also stated that “Coulson is encouraged to submit their proposal IAW [in accordance with] the terms of the RFP.” Coulson filed a protest with GAO on May 11, 2015.

A key issue for GAO’s consideration of Coulson’s protest was whether the contractor’s letters were attempts to resolve issues through “open and frank discussions,” as contemplated under FAR § 33.103(b), or, alternatively, whether the letters qualified as agency-level protests under FAR § 33.103(d). This distinction is important because the regulations for bid protests contain exacting rules for timely submission. Specifically, the regulations require that a contractor submit a protest to GAO no later than 10 days after the basis for the protest is known or should have been known. This 10-day time limit is strictly enforced.

Coulson asserted that it did not intend to lodge an agency-level protest through its communications with the Air Force, but it merely sought to resolve its concerns with the agency through “open and frank discussions,” as required by the regulations. The Air Force contended that Coulson’s letters were agency-level protests, and Coulson failed to timely file its protest with GAO within 10 days of the agency’s denial.

GAO agreed with the Air Force, deciding the matter of Coulson Aviation (USA), Inc. (file numbers B-411525, B-411525.2) on August 14, 2015. GAO indicated that in order to be considered an agency-level protest, a “written statement need only convey the intent to protest by an expression of dissatisfaction and a request for corrective action.” GAO reasoned that “Coulson’s letters clearly expressed dissatisfaction with the solicitation by disagreeing with the Air Force’s decision to use FAR part 15, rather than FAR part 12. They also specifically requested corrective action by asking that the Air Force revise the RFP to follow the commercial item procurement procedures under FAR part 12. As such, Coulson’s letters conveyed the intent to protest.”

Coulson’s subjective intentions were immaterial to GAO’s determination that the letters Coulson submitted were protests. Rather, GAO emphasized the contents of the letters, and in particular the fact that Coulson verbalized a “specific expression of dissatisfaction with the agency’s actions” and subsequently sought “specific relief” from the agency. Moreover, GAO found that the agency “clearly articulated its disagreement” with the contractor through its responses, and as such the Air Force had taken adverse action against Coulson for which Coulson should have filed its protest with GAO within 10 days. Because Coulson failed to file its protest within the required period, GAO dismissed as untimely Coulson’s allegations regarding the agency’s refusal to proceed under FAR part 12.

Government contractors have a variety of options for addressing their concerns when a contracting officer makes a decision with which the contractor disagrees, including disputes, protests, and other forms of conflict resolution. Although the FAR requires parties to use their best efforts to resolve concerns with agency contracting officers through “open and frank discussions,” contractors must be cognizant of the possibility that such discussions may be deemed agency-level protests, thereby requiring the contractor to timely submit a protest to GAO or lose its right to a formal review of adverse agency action.