By law, a GAO protest must be filed by an interested party. An interested party is an actual or prospective bidder or offeror whose direct economic interest would be impacted by the award of a contract or by the failure to award a contract. Before bid opening or the closing date for receipt of proposals, a protestor must be a prospective bidder or offeror with a direct economic interest in the procurement. This generally means that a bidder or offeror has expressed an interest in competing and is capable of performing the type of work that the solicitation requires. After bid opening or the submission of proposals, a protestor must be an actual bidder or offeror with a direct economic interest in the procurement. This generally means a bidder or offeror who would be in line for award if the protest were sustained. A protestor who cannot receive an award if it prevails on the merits of its protest is not an interested party. In some cases, a high-priced bidder might be able to demonstrate that all lower-priced bidders are ineligible for award, thus becoming the next-in-line for award. In a “best value” negotiated procurement, the GAO determines whether a protestor is an interested party by examining the probable result if the protest is successful. This means that an actual offeror, who is not in line for award, is an interested party if it would regain the opportunity to compete if the protest is sustained.
After establishing that it is an interested party, a protestor must also demonstrate prejudice to prevail on the merits of its bid protest. To meet this requirement, a protestor must show that if not for the agency error, there existed “a substantial chance” that the offeror would have been awarded the contract. The GAO will typically resolve any doubts regarding prejudice in favor of the protestor since a reasonable possibility of prejudice is a sufficient basis for sustaining a protest.
A recent GAO decision highlights the distinction between jurisdiction and prejudice. More specifically, this decision shows how a protester, who is not in line for award, can still be an interested party for jurisdictional purposes even if the same facts clearly establish that the protester was not prejudiced by the agency’s actions.
In Olympus Building Services, Inc. (Olympus), the GAO denied a protest filed by Olympus concluding that the protester was not prejudiced by the agency’s evaluation because its proposal was not among the highest-rated for the most important non-price factors. In that case, Olympus protested the award of a custodial services contract by the Department of Agriculture alleging that the agency misevaluated the solicitation’s non-price factors of its proposal and the proposal of the awardee. The GAO found that the Department of Agriculture properly evaluated the individual non-price factors, but erred in its overall evaluation of the proposals because it treated all of the non-price factors as being equal while the solicitation listed them in descending order of importance. The GAO concluded, however, that Olympus did not suffer prejudice because its higher-priced proposal was rated lower than the awardee’s proposal in four of the eight non-price factors (including the two most important factors). Additionally, Olympus was rated lower than the second-in-line offeror in four of the eight non-price factors (including the most important factor). As such, the GAO found that Olympus was not prejudiced by the agency’s error because there wasn’t a substantial chance that Olympus would have been awarded the contract if the error were corrected. Although the GAO never specifically addresses the jurisdictional issue, this opinion does an excellent job of showing the difference between what it means to be in-line for award as it relates to jurisdiction; i.e. regaining the opportunity to compete, versus in-line for award as it relates to prejudice. Olympus Building Services, Inc., B-416599.3, Oct. 24, 2018.
The entire GAO decision can be found here.