Correcting the corrective action

Programming note: I will be posting GovContrActually on Wednesday afternoons for the duration of the summer to better balance personal commitments. Also, while I'm getting meta, if you enjoy these posts, I'd appreciate if you shared with a colleague who might enjoy them, too. Now, on to the post!

One way to think about protests is that they're opportunities for the government to "get it right". I mean, hey, people make mistakes! And if the government makes a mistake, then protests can give the government a chance to course correct.

Another way to think about protests is that they're really just litigation and that it's less important to get it right than it is to be right. I mean, hey, protests involve lawyers! When lawyers are involved, things can get a little more... formal.

I think if you were to poll folks about which is the right way to think about protests, they'd say that the first way may be ideal, but the second way is more realistic. Sure, in a dream world, the government could admit its faults and move forward. But in the real world, lawyers are involved and admitting fault is considered a professional hazard.

Still, a commonly cited data point from the GAO can give a starry-eyed dreamer some hope. According to the GAO, almost half of cases[1] end up in "corrective action". A corrective action happens when an agency decides to, on its own accord, fix something in response to a protest. As GAO notes: "An agency’s corrective action may involve a re-evaluation of proposals, a new award decision, an amendment to a solicitation, or other actions. We will typically dismiss a protest if an agency takes corrective action that resolves protest arguments or provides the relief sought by the protester."

So, in almost half of the cases, the government effectively says "oops, my bad" and fixes it. Score one for the idealists!

But again, there are lawyers involved and idealism can sometimes just be a cover story for sharp-elbowed litigation. Recently, we saw a pretty interesting case from the real world, called Kupono Government Services LLC, which serves as a reminder that just because the government takes corrective action doesn't mean the lawyers go away.

Kupono involved a pretty unusual procedural situation: a protest of a corrective action. It all started with a cost-reimbursement contract by the Department of Energy (DOE) that Kupono lost, and protested. After the first protest was filed, DOE notified GAO that it intended to take corrective action and moved to dismiss the case. So far, pretty normal.

Things got a little weird, though, because Kupono clearly thought that DOE was not going to do enough during corrective action:

[DOE] advised that it intended to solicit, obtain, and evaluate revised cost proposals; review other areas of its evaluation and address issues as appropriate; and make a new source selection decision. Kupono objected to dismissal of its protest, maintaining that the scope of the agency’s proposed corrective action was too narrow, and arguing that the agency also should solicit and evaluate revised technical proposals. We stated that the agency’s proposed corrective action included a representation that it would review the other areas of its evaluation and address issues as appropriate, and concluded that this ultimately could lead the agency to solicit and evaluate revised technical proposals.

Now, one could take the position that Kupono was being a bit aggro here. Objecting to corrective action? Really? After all, DOE just said it was going to fix its mistake! They won, right? GAO sure thought so. Give 'em a chance, they said.

Well, Kupono clearly is no starry-eyed dreamer, and they ended up filing a new protest even before the corrective action happened. And, reader, they won again.

Here, the agency has failed to articulate what--precisely--it believes are the flaws that exist in its procurement process. In this connection, the agency reports include a declaration from the contracting officer that purports to state the underlying reasons for the agency’s corrective action. However, there are no substantive details or explanations in the declaration that detail what the flaws are in the procurement process...

Beyond generic references to “mathematical errors” and “errors in certain assumptions,” however, the declaration offers no insight into, or information about, the nature of the errors that the agency has identified in its cost evaluation and how those errors impacted its evaluation of initial and final cost proposals. In addition, it is not clear, nor is there an explanation of why, the agency’s proposed corrective action--soliciting only revised cost proposals, and instructing offerors to “ignore” the agency’s earlier cost-related discussion questions--is appropriate to remedy the errors identified by the agency.

The GAO opinion basically tells agencies: "look, if you're going to take corrective action, you need to tell us what you intend to correct. You've got to admit something wasn't right and how you're fixing it."

Then again. Lawyers! They're not exactly keen on admitting mistakes, which occassionally gets you a declaration from a Contracting Officer that "offers no insight into, or information about, the nature of the errors that the agency has identified."

And if the agency gets caught, GAO will call them out!

It's possible, though, that behind the application of a straightforward legal principle, GAO was also a tad bit annoyed by the lawyers' tactics during the corrective action. When a second protestor—Akima Systems Engineering, LLC—filed a protest of DOE's corrective action and requested that DOE provide documents relating to its decision to limit its corrective action, DOE "asserted an unidentified privilege in connection with its decision to withhold the requested documents."

And when GAO asked for a "privilege log detailing the documents being withheld, and the privilege or privileges being asserted" the agency effectively responded: "just kidding, we don't have any documents!"

Here's the agency's response and it's worth reading it slowly:

DOE has reviewed its files to attempt to identify any documents relevant to the above document request that it is withholding based on an assertion of privilege. However, as you can see from the attached log, DOE has not been able to identify any such documents. The primary reasons for this are that, as explained in the attached CO’s [contracting officer’s] Supplemental Declaration: 1) much of the subject “thorough review” was conducted by the evaluation team at the request of the attorneys assigned to this matter, as part of the attorneys efforts to develop a litigation strategy for the bid protests; and 2) the decisions a) to take corrective action; and b) the scope that such corrective action should encompass, were discussed and decided upon in virtual meetings, not in an exchange of documents, and the decision was not memorialized by a memorandum to the file or similar document.

Hoo boy! Yowza! When the agency admits it doesn't have any documents, puts "thorough review" in scare quotes, cops to the fact that the "thorough review" was all just a part of litigation strategy, and that even with lawyers involved they decided not to write things down, you're going to make GAO pretty unhappy.

So, yeah. DOE clearly lost. Them's the breaks!

Remember, kids: even if you find yourself in an ideal-world situation where the government chooses to take corrective action, if there are lawyers involved, assume that they're developing a litigation strategy! And if you're the lawyers, you've gotta play in the real-world, too; whatever your litigation strategy is, you might want to stay away from "unidentified privileges".

[1] Here's my math. According to the most-recent report, there were 1655 cases closed, with 455 merits decisions, and 59 sustains. The sustain rate is 13% (59/455). The "effectiveness rate", which is defined as "either as a result of voluntary agency corrective action or our Office sustaining the protest" is listed at 51%. At that number, it means that 844 cases were either sustained or corrective action was taken (51% * 1655 cases closed = 844 effective cases).

So, 844 (effective) - 59 (sustain) = 785 (corrective action), which means that corrective action was taken in 47.4% of cases (785 corrective action /1655 cases closed). QED.

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