Corrective Action Protest Grounds for GSA Schedule Federal Construction Contractors

On May 16, 2024, the U.S. Court of Federal Claims (COFC) reinstated a contract award after determining that a Government Accountability Office (GAO) corrective action recommendation was without a rational basis.

A contract awarded, protested, terminated, appealed, then reinstated. It’s no secret that federal construction procurements are plagued with uncertainty. From delays, constructive suspensions, compromised supply chains, the litigation-laden critical path method, and the mandate for all construction materials used in federally funded projects for infrastructure to be produced in the United States under the Build America, Buy America Act (BABAA) (to name just a few traditional and emerging favorites), just one of these issues could fill the rest of anyone’s month with substantive research. To add one more, which is entirely unique to bid protests, federal contractors–including construction contractors–listed in a General Service Administration (GSA) Schedule may have new grounds to have a contract award reinstated that was terminated by a federal agency pending a GAO decision.

GAO Protest

An initial GAO protest filed by Deloitte & Touche LLP (Deloitte) argued that the National Geo-Spatial Intelligence Agency (Agency) wrongfully made an award to Kearney & Company, P.C. (Kearney) when the Agency: (1) improperly evaluated quotes; and (2) failed to conduct a proper best-value tradeoff analysis. At issue was a competed task order with Kearney under a GSA FSS multiple-award contract. Before the GAO issued an opinion, however, it held an unrecorded predictive-outcome conference with Deloitte and Kearney where the only mutual consensus was the likely ineligibility of all offerors for the relevant award. The Agency subsequently elected to take corrective action, terminating Kearney’s contract award for convenience, amending the solicitation to avoid issues (including undisputed issues) addressed in the GAO protest. After the Agency adopted their corrective action, the GAO protest was dismissed as academic and moot.

COFC Protest

Shortly after the GAO decision, Kearney filed a COFC protest which reinstated their contract. The COFC held, among other things, that the Agency’s decision to adopt the GAO recommendation was irrational because the recommendation itself was irrational. Kearney & Company, P.C. v. United States, Nos. 24-162 and 24-201. The GAO solely misunderstood the solicitation to require FSS labor categories to exactly match personnel requirements, notwithstanding that the parties agreed the solicitation stated otherwise. The Agency’s corrective action was based on this GAO misunderstanding, resulting in the corrective action lacking the requisite rational basis. See Dell Fed. Sys., L.P. v. United States, 133 Fed. Cl. 92, 101, 104 (2017).

Implications on Construction Contractors in the GSA Schedules

While large federal construction procurements are generally competed under sealed bidding procedures, construction contractors offering services on a GSA Schedule can potentially have awards reinstated that were terminated due to agency corrective actions. For example, the GSA’s Multiple Award Schedule for “Facilities – Facilities Maintenance and Repair” lists contractors offering services for complete operations, maintenance and repair of federal real property. This includes maintenance for elevators, HVAC, electrical, plumbing, septic, amongst others. In this situation, if an agency holds a competition for task orders making an award to one of the offerors, resulting in a GAO protest, an agency’s corrective action based on the protest or a GAO predictive-outcome conference call may be fair game for contract reinstatement at the COFC.

Considering the expanding range of protest issues involved in construction projects, the mere mention of an agency corrective action while a GAO protest decision is forthcoming may be worth watching. Besides, who says the critical path method couldn’t creep into your personal life more than it already does?

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Author, Marcus Burden, is an incoming associate at Pillsbury Winthrop’s DC office, and a recent graduate of the George Washington University Law School. His legal experience as a 1L - 2L summer associate and part-time law clerk with Pillsbury during law school, involved city and federal government procurement protests and disputes, CFIUS review, and various real estate and construction-related litigation matters and transactions. He is a current member of the American Bar Association’s Section on Public Contract Law, Forum on Construction Law, and Young Lawyers Division. During law school, he served as Director of Events for the Government Contracts Student Association, was an active member of the Black Law Student Association, and was the recipient of the Larry D. Harris Memorial Law Scholarship.

Editor The Honorable Jeri K. Somers (ret.) is an arbitrator and mediator, focusing on the areas of government contracts matters, construction matters, and other industry disputes.  Judge Somers is also a member of the Military Justice Review Panel, established pursuant to 10 U.S.C. § 946, and the Department of State Foreign Services Grievance Board.