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bob7947

GAO's Sanction Against Latvian Connection and Its Principal

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In the past, GAO has imposed sanctions on a protester's representative.  See GAO Sanctions, COFC, Rule 11: Signing of Pleadings, Motions, and Other Papers; Representations to Court; Sanctions.  

You can also look at 4 CFR 21.4: Protective Orders where GAO's Bid Protest regulations authorize sanctions against a protester's representative.  Under that rule, GAO can go as far as dismissing the protest.  GAO, in its Latvian Connection decision, points to PWC Logistics.  In that decision, it said:

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We recognize that dismissal is a severe sanction, and that it should be employed only in the rarest of cases. Indeed, we are acutely aware, and it weighs against the dismissal, of the general public policy favoring a decision on the merits. 

 GAO also points to a Supreme Court decision to support its inherent right to impose sanctions.   

I haven't done any research but is it fair to place a firm and its principal in protest jail for 1 year or is it an abuse of discretion on GAO's part?

I think it might make an interesting paper for someone.

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"Is it fair...?" You must be kidding to even ask that question, considering a  particular firm's and its principal's apparent "vexatious" conduct and abuse of the protest process, according to the GAO:

http://www.gao.gov/products/D14354#mt=e-report

see also: 

http://www.wifcon.com/discussion/index.php?/blogs/entry/3197-150-protests-and-counting-gao-suspends-“frequent-protester”/

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Joel:

My use of "fair" may have been a poor choice of a word but I am wondering if GAO's sanction can survive a court's scrutiny.  Read the decisions and opinions by GAO and the COFC in the cases from the two places I provided.  What is GAO's basis for a 1-year sentence?  Gut-feel?  Where is it in CICA or GAO's issued regulations?  Read 4 CFR 21.4.  Why is GAO so weak-kneed there and so tough now?

Think about it. 

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"Fair"? You bet it's fair to have an inherent right to fight to maintain the integrity of the system. 

I'm not a lawyer but it was always fun watching a certain Judge in the TV series "The Good Wife" blasting and sanctioning the lawyers for their various legal antics. 

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3 hours ago, bob7947 said:

Joel:

My use of "fair" may have been a poor choice of a word but I am wondering if GAO's sanction can survive a court's scrutiny.

Think about it. 

The matter would have to be pursued in U.S. district court, and I, too, question whether the GAO's action would withstand scrutiny. I think they have exceeded their powers under the statute.

Given the company's general disposition, I think we'll find out in due time.

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The issue here is whether GAO has a legal basis to put a protester in a penalty box for an arbitrary period of time thereby depriving it of the right to protest a federal procurement. I don't think that they have that right.  As Steven Koprince points out in his latest blog entry, the penalized protester has had protests sustained by GAO. So, GAO has decided that for a period of 1 year, it would not even hear a valid protest it would sustain.  

If we do a find search on GAO's decision for the word frivolous, we won't find that word.  Do you wonder why?   One thing about precedent attorneys is that they have good memories.  In this case, it doesn't take much of a memory--even for GAO.  Let's go back to 2009 and read something GAO called:

Report to Congress on Bid Protests Involving Defense Procurements

Congress asked GAO about frivolous protests then and the value of handing out penalties.  Of course, at that time GAO was probably more interested in protecting its turf more than anything else.  Here is what GAO said about frivolous protests:

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GAO's regulations and procedures currently provide GAO the ability to promptly close protests that do not merit further development. GAO does not need to determine that a protest is "frivolous" to promptly close it, and, in our view, making such a determination could add substantial costs to the protest process and have the unintended consequence of discouraging participation in federal contracting and, in turn, limiting competition.

GAO has enough reasons at 4 CFR 21.5 to close protests promptly and they do.  If they need more reasons, they can add them until hell freezes over..

What did GAO tell Congress about penalties against protesters in that report:

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In our view, potential penalties--along with the additional litigation necessary to establish the sine qua non for the imposition of penalties, namely, bad faith--risk discouraging good-faith protests. In addition, protests bring an important element of transparency and accountability into the federal procurement system that otherwise might be unavailable. Protests also provide guidance to agencies in the form of publicly-available decisions interpreting procurement laws and regulations.

Finally, the imposition of penalties on protesters could result in a chilling effect on the participation of contractors in both the protest process and federal procurement as a whole.As the conference report accompanying CICA stated, the availability of a strong bid protest mechanism promotes competition in the procurement system by providing contractors a measure of confidence that concerns regarding potentially unfair treatment may be addressed in a neutral forum. Contractors, particularly small businesses, could conclude that the risk of being penalized for a good-faith protest--or the potential that they may have to litigate whether their protest was frivolous--outweighs the potential benefit in filing the protest. Contractors might also perceive the inclusion of penalties in GAO's statutory mandate as an indication that protests have become disfavored as a matter of policy. To the extent contractors believe that it is less likely that their legitimate concerns will be addressed, the result could be an increased distrust of the U.S. procurement system and reduced participation in the system--especially by small businesses.Either of these outcomes could reduce competition and impair the government's ability to obtain the best value in procuring goods and services.

With its sanction, GAO, in my view, justified why the U. S. Court of Federal Claims should hear bid protests.  

Let me add that I couldn't care less about the protester in the penalty box.  My only concern is that GAO exceeded its authority under the law--and I believe they did.  Not only did they exceed their authority, in my view, but they were inconsistent with what they said in the past.

 

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I've been editing my entry for a period of time and believe that is unfair for members.  I won't do it further.  

If you read the report GAO submitted to Congress, you will see their explanation for not calling a frivolous protest frivolous.  They wouldn't call Daffy, Donald, or the insurance company's bird a duck either.

 

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Guest Jason Lent
1 hour ago, bob7947 said:

I've been editing my entry for a period of time and believe that is unfair for members.  I won't do it further.  

If you read the report GAO submitted to Congress, you will see their explanation for not calling a frivolous protest frivolous.  They wouldn't call Daffy, Donald, or the insurance company's bird a duck either.

 

They do call Latvian Connection's pattern of protesting "vexatious", which is a word I was happy to read the definition of.

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On 8/23/2016 at 7:20 AM, bob7947 said:

If we do a find search on GAO's decision for the word frivolous, we won't find that word.  Do you wonder why?

Bob, you are spot-on. GAO might regret its statements from the 2009 report. The 2009 report specifically mentioned that the process of determining a protest to be "frivolous" (as filed or as argued) would have to be extensive and time-consuming to protect due process-- so extensive and time-consuming that GAO said they didn't have the resources or inclination to exercise such a power. Years later, GAO encounters hundreds of protests from the same source and bans this source for one year for being "vexatious." A CTRL+F search for "frivolous" was also the first thing PepeTheFrog did when reading the latest GAO decision. The silence is deafening.

 

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Go to the statute, people. Forget reports. Start with the law, 31 U.S.C. §§ 3551 - 3557, and ask whether what the GAO has done is consistent with the law and the discretion that it has thereunder.

It is one thing to dismiss a particular protest. It is another thing entirely to refuse to comply with the statutory mandate of 31 USC § 3552(a):

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A protest concerning an alleged violation of a procurement statute or regulation shall be decided by the Comptroller General if filed in accordance with this subchapter.

See also 31 USC 3554(a)(1):

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Except as provided under paragraph (2) of this subsection, the Comptroller General shall issue a final decision concerning a protest within 100 days after the date the protest is submitted to the Comptroller General.

See 31 USC 3554(a)(4):

Quote

The Comptroller General may dismiss a protest that the Comptroller General determines is frivolous or which, on its face, does not state a valid basis for protest.

Where does the statute say that GAO can ban a particular firm from protesting for a year? Where does it say that it can effectively dismiss a protest without first looking at it and determining that it's groundless or frivolous?

If you conclude that the statute permits the GAO to do what it did, then go to the GAO's bid protest regulations. The GAO followed the APA rulemaking process when it promulgated its regulations. See e.g., 49 FR 36386, September 17, 1984. Where does the GAO's regulation say that it can ban a firm for a year? Is GAO's decision consistent with those regulations? If not, and assuming that the statute permits, can GAO effectively make a new rule without first going through the rulemaking process?

What GAO has done is announced, in advance of a receipt of a protest, that it will refuse to do for a particular firm what the law and its regulations seemingly require it to do. It has cited no express provision of statute or regulation that empowers it to refuse to even consider any protest from a particular firm for a year. If I were Latvian, I'd drag GAO off to a U.S. district court and ask the court to order GAO to do its job.

Latvian is a nuisance, but government organizations must, absolutely, obey the law. That's what the GAO would demand of any agency facing a bid protest.

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Is there any law or case law that allows a Board of Appeals to sanction a firm for a pattern of "vexacious" appeals or behavior (according to GAO)? What gives Latvian the right to appeal contract awards that are already performed years ago, for instance? 

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I don't care about what Latvian can or cannot do by right. That is for GAO to decide on a case by case basis. All I care about is whether the GAO is acting within its authority. Is its decision consistent with what the law requires it to do?

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11 minutes ago, joel hoffman said:

What gives Latvian the right to appeal contract awards that are already performed years ago, for instance ? 

It seems Latvian often argued that agencies did not properly publicize contract actions so Latvian's protest should be considered timely. With exceptions, protests must be filed not later than 10 days after the protester knew or should have known the basis of protest (whichever is earlier), pursuant to GAO requirements.

 

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6 minutes ago, Vern Edwards said:

I don't care about what Latvian can or cannot do by right. That is for GAO to decide on a case by case basis. All I care about is whether the GAO is acting within its authority. Is its decision consistent with what the law requires it to do?

Vern,

From what I read in the GAO's decision, they did not rely on the statute as the basis to justify their action against Latvian (http://www.gao.gov/products/D14354#mt=e-report):

Quote

However, our Office necessarily reserves an inherent right to dismiss any protest, and to impose sanctions against a protester, where a protester’s actions undermine the integrity and effectiveness of our process.  PWC Logistics Servs. Co. KSC(c), B‑310559, Jan 11, 2008, 2008 CPD ¶ 25 at 12.  The inherent right of dispute forums to levy sanctions in response to abusive litigation practices is widely recognized and has been characterized by the Supreme Court as “ancient in origin,” and governed not by rule or statute, but by the control necessarily vested in a forum to manage its own affairs.  Roadway Express, Inc. v. Piper et al., 447 U.S. 752, 765 (1980). 

 

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Pepe:

Exactly!  

In 1982, GAO responded to Senator Stennis about a protester that submitted repetitive protests and came up with a solution.   That was before CICA.

Vern:

I agree.  I read the CICA provisions and found a weak phrase that I wouldn't want to use.  GAO wanted CICA, it got CICA, and now it wants to misuse its authority under CICA.  In 2009, Congress wanted to give GAO more avenues to deal with repetitive, frivolous, or vexatious protests including penalties for protesters.  It declined both because it said it didn't need anything else.  

Both of us agree that what GAO did was wrong.  I assume that GAO received support for what it did and phrased its protest to add some things that were mentioned with that support.

If we go to GAO's protest statistics, we see that GAO is receiving well over 2,000 protests a year.  About 20 to 25 percent go to some type of decisions.  That leaves about 1,900 to 2,000 protests it disposes of quickly.  I guess 10 percent more would break the GAO's back--not.

We can argue what GAO did was wrong a number of ways.

 

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22 minutes ago, Matthew Fleharty said:

However, our Office necessarily reserves an inherent right to dismiss any protest, and to impose sanctions against a protester, where a protester’s actions undermine the integrity and effectiveness of our process. 

They can assert such a "right," but asserting does not make it so. They should either withdraw their decision or be forced to persuade a court.

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All:

Latvian's behavior is not the issue. The only issue is whether the GAO has authority under statute and regulation to decide as it did.

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2 minutes ago, Vern Edwards said:

They can assert such a "right," but asserting does not make it so. They should either withdraw their decision or be forced to persuade a court.

Agreed, though even rights asserted based on statute are still subject to review (hence the existing of our entire judicial system) - like you mentioned, I'm sure this will be pursued further based on Latvian's behavioral trend and I'm curious to see the results.  I just wanted to make sure everyone was on the same page with regards to the basis for GAO's action.

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The sanctions mentioned in PWC Logistics Servs. Co. KSC(c), B‑310559, Jan 11, 2008, 2008 CPD ¶ 25 at 12 do not resemble the sanctions against Latvian.

Did I miss something?

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You may wish to look at the Supreme Court case they used to explain their inherent right . . . .

Quote

However, our Office necessarily reserves an inherent right to dismiss any protest, and to impose sanctions against a protester, where a protester’s actions undermine the integrity and effectiveness of our process.  PWC Logistics Servs. Co. KSC(c), B‑310559, Jan 11, 2008, 2008 CPD ¶ 25 at 12.  The inherent right of dispute forums to levy sanctions in response to abusive litigation practices is widely recognized and has been characterized by the Supreme Court as “ancient in origin,” and governed not by rule or statute, but by the control necessarily vested in a forum to manage its own affairs.  Roadway Express, Inc. v. Piper et al., 447 U.S. 752, 765 (1980). 

 

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3 hours ago, Vern Edwards said:

The GAO followed the APA rulemaking process when it promulgated its regulations. See e.g., 49 FR 36386, September 17, 1984.

According to the GAO, they are not subject to the Administrative Procedures Act. See 81 FR 22197, April 15, 2017.

All the same, there is a question whether, having put the public on notice of their "regulations," which are published in the CFR, they should be permitted to depart from their own regulations at will and without public notice.

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Latvian Connection LLC has requested membership on this forum.  Since it met the requirements, I approved the request.

In the above post [that I have removed], I have deleted a number of proper names of individuals, political figures, etc.  These violated the Terms of Use.  I have tried to identify any other violations.

--------------------------------------------------------------------------------------

The above former member has been removed for violations of the Terms of Use.

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What is/are Latvian Connection's business specialty?

For instance, could you perform construction in Germany/Europe/Middle East/Asia /Central/South America, etc., as a prime contractor?  Specifically, contracts between $3000 and $150,000 and larger? 

Edit: ...at fair and reasonable, competitive prices? 

Thank you. 

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On 8/23/2016 at 7:49 AM, bob7947 said:

I've been editing my entry for a period of time and believe that is unfair for members.  I won't do it further.  

If you read the report GAO submitted to Congress, you will see their explanation for not calling a frivolous protest frivolous.  They wouldn't call Daffy, Donald, or the insurance company's bird a duck either.

 

you just edited out Bob the words xxx, xxx, xxx, xxx, xxx, xxx,xxx,

Yes Latvian Connection, I deleted those words because of violations of the Terms of Use.  After I posted the reason I made those deletions, you felt it was necessary to put them back.  That was a terminal violation of the Terms of Use and you have been removed.

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