An Agency and Awardee Do Not Have a Common Interest in Crafting the Scope of a Corrective Action; Peraton, Inc., GAO B-416916.5, B-416916.7

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Protest challenging the scope of agency’s corrective action is denied. As part of the protest, the protester had requested the agency disclose communications with the awardee regarding the corrective action. The agency refused, alleging the documents were protected by the joint defense privilege. GAO found that the agency could not assert the privilege because agencies and awardees do not have a common interest in the scope of a corrective action. Aside from this, GAO did not find the merits of the protest convincing. The corrective action had been tailored to resolve a problem identified in GAO outcome prediction. Additionally, there was no evidence the agency and awardee had colluded in crafting the corrective action.

The State Department awarded a contract for server and software development services to ManTech Advanced Systems International. An unsuccessful offeror, Peraton, Inc., protested, alleging that letters of commitment from ManTech’s key personnel did not satisfy solicitation requirements.

GAO held an outcome prediction conference and informed the parties that it was likely to sustain the protest on the commitment letters issue. Following the conference, ManTech sent an email to agency counsel laying out their view on the scope of possible corrective action. Following this correspondence, the State Department notified GAO that it was taking corrective action to reopen discussions to confirm the availability of proposed key personnel and update letters of commitment. Peraton then filed a protest challenging the scope of the corrective action, alleging that it unduly favored ManTech.

Before addressing the merits of the protest, GAO addressed some preliminary matters. First, Peraton had objected to ManTech intervening in the protest. Peraton reasoned that a protest challenging a corrective action is effectively a pre-award protest, and that  GAO does not normally allow intervention in pre-award protests.

GAO acknowledged that it does not generally permit intervention in pre-award protests. But it noted that in this case, ManTech was the only other offeror that would be eligible to compete during the corrective action. Additionally, prior to the corrective action, ManTech was the awardee. Moreover, as part of its protest, Peraton specifically urged the agency to find ManTech’s proposal unacceptable and exclude it from the competition. Collectively, these facts suggested that ManTech had a substantial chance of receiving award if the protest was denied and thus the right to intervene.

Also, as part of its request for documents, Peraton had requested all communications between ManTech and the State Department concerning the corrective action. The agency refused to disclose these communication because it considered them privileged communications covered by the joint defense doctrine.

But GAO reasoned that parties can only invoke to joint defense doctrine if they have some sort of common interest. GAO found that an agency and an awardee cannot have a common interest in the scope of a corrective action because awardees can, and frequently do, file protests challenging the scope of corrective action. While the agency and the awardee may have had a common interest in defending the award decision, that interest does not extend to a corrective action, because a corrective action is more akin to setting the ground rules of a competition.

As to the merits of the protest, Peraton argued that the corrective action should have been limited to merely reevaluating existing proposals, and that ManTech should not be allowed to correct the flaw with it letters of commitment. GAO rejected this argument because the State Department had failed to raise the issue with the commitment letters during discussions. Thus, while the agency erred in making award to ManTech due to the letters, it also erred by failing to identify the letters issue during discussion. It would be improper for the agency to exclude ManTech’s proposal on the basis of the first error without resolving the second. Indeed, by taking the correct action, the agency sought to resolve both errors.

Peraton alternatively argued that the corrective action was too narrow in that the proposed discussions appeared to be tailored to permit ManTech to correct its letters without allowing Peraton to correct any errors in its proposal.

But GAO reasoned that agencies may focus corrective actions to address errors identified in outcome prediction. Additionally, when reopening discussions to address fault that was not raised in discussions, the agency may hold discussions with only the affected offeror. Here, the agency focused its corrective action to address the only procurement issue raised in outcome prediction. And to address that issue, the agency had to conduct discussions with ManTech

Finally, Peraton contended that the agency’s communications with ManTech were unfair and reflected collusion. GAO didn’t but it. ManTech’s counsel sent an email reflecting its view of the scope of corrective action. Agency counsel did not respond for a week. When counsel did respond, they offered a holiday greeting and briefly described the proposed corrective action. GAO opined that allegations of collusion or bias were untenable on these facts.

Peraton is represented by J. Scott Hommer III, Rebecca E. Pearson, Emily A. Unnasch, Christopher Griesedieck, and Taylor A. Hillman of Venable LLP. The intervenor, ManTech, is represented by Paul F. Khoury, Brian G. Walsh, Cara L. Lasley, Lindy Bathurst, and Nicholas L. Perry of Wiley Rein LLP. The agency is represented by Tudo N. Pham of the Department of State, GAO attorneys Michael Willems and Edward Goldstein participated in the preparation of the decision.

GAO - Peraton Inc.