Avoiding Common Bid Protest Mistakes
Mistake 7: Not Demonstrating Prejudice
Solution: Understand the Different Types of Prejudice You Must Establish, and File a Protest Only if You Can Do So
In real life, we all know that prejudice is a bad thing. But in the unique world of bid protests, success can actually depend on establishing prejudice. Two different types of prejudice, in fact, if you can believe it! Of course, “prejudice” means something very specific – and different than the everyday meaning of the word – in the world of government contracting. Let’s take a look at what it means (and what you need to do with it) in the bid protest context.
When you file a bid protest, you need to think about two types of prejudice. First, you need to be able to show prejudice in the context of establishing “standing.” Not everyone has standing to bring a protest. You need to be an “interested party”. That means that, to successfully bring a protest at the U.S. Court of Federal Claims (COFC) (pursuant to the imputation of the CICA definition of “interested party” to the Tucker Act) you must be “an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by failure to award the contract.” The same standard applies at GAO. Satisfying that first “actual or prospective bidder or offeror” piece is often pretty straight-forward. If you responded to the solicitation, or would have, if not for the error you are protesting about, you most likely check that box. It is that “direct economic interest” piece that gets a little more complicated.
To show a “direct economic interest,” “a protestor must demonstrate prejudice.” Prejudice can mean different things depending on what type of protest is being filed. In a post-award bid protest, a protestor must show that it would have had a “substantial chance” of receiving the contract award but for the alleged errors in the procurement process. In a pre-award protest, a protestor can demonstrate prejudice by establishing a “non-trivial competitive injury which can be addressed by judicial relief.” These analyses seem simple, but can be more nuanced and complicated than they appear. All the same, if you can establish this type of prejudice, you have gotten through the first part of the obstacle course. That’s the good news. The bad news? You still have another prejudice hurdle to clear.
Now you need to think about whether you can establish the second type of prejudice: Prejudicial error on the merits. What is the difference? In a 2019 case, COFC explained:
For standing, we presume the party bringing a bid protest will succeed on the merits of its claim and ask whether it has alleged an injury (or prejudice) caused by the procuring agency’s actions. But once we find that a party has standing, we must turn to the merits of the party’s claim and determine whether it can prove it was prejudiced based on the record evidence.
In other words, did the protestor actually suffer injury – most likely, the loss of a contract award it would have received – because of the procurement error(s) alleged in the protest? A protestor must show that its substantial rights were affected by the procurement error(s) in question, and, further, that the correction of those errors would have yielded a different result. This can be a tricky thing to do. Maybe you can show that the agency made several mistakes, but if the result would have been the same even if those mistakes were corrected, there is no prejudicial error.
It is critically important, when you are planning to file a protest, to fully analyze the prejudice issue(s) with your attorneys. You might be able to show that the government messed up, and you might be hopping mad about it! But unless you can show both types of prejudice, a protest might be a waste of time and money. The key is to frame your protest in such a way as to overcome both barriers, and survive a motion to dismiss.