August 2024 Bid Protest Sustain of the Month

As Summer Comes to a Close, So Does GAO’s Sustain Drought

In last month’s Bid Protest Sustain of the Month installment, we noted that GAO was suffering from a sustain drought, having failed to issue a single sustained protest decision in the month of July.  But it appears that drought is over!  The final tally for August shows that GAO issued a whopping six separate sustained protest decisions in August 2024.  Four of these decisions—issued at the end of the month—are still under Protective Orders, so we do not yet know the grounds for the sustains.  The remaining two involved less-common sustain issues: an offeror’s compliance with the Trade Agreements Act (TAA) and an agency’s compliance with the “Rule of Two.”  In HPI Federal, LLC, B-422583, the protester argued that some of an awardee’s offered products were not TAA compliant.  GAO sustained the protest, finding that the contractor had certified only that its products were “assembled” in Mexico, not that they were “an end product of Mexico.” 

In Knudsen Systems, Inc., B-422433.2, GAO issued another sustain decision—this time in response to a protest challenging an agency’s decision to set aside a procurement for small businesses.  Knudsen itself was a small business; but when the agency informed offerors that they were required to comply with the nonmanufacturer rule—which requires offerors to either manufacture items themselves or buy them from a domestic small business manufacturer—Knudsen protested the set aside. 

In deciding whether to set aside a procurement, the FAR requires agencies to perform a “Rule of Two” analysis to assess whether the agency has a reasonable expectation that offers will be received from at least two responsible small business concerns capable of performing the contract, and award will be made at a fair market price.  Knudson explained that it was unable to comply with the nonmanufacturer rule, and alleged that the agency’s Rule of Two analysis failed to consider the capability of other companies to comply with the nonmanufacturer rule as well.  GAO agreed, finding that there was no support for the conclusion that that any of the small businesses identified in the agency’s market research report would be capable of performing the solicitation requirements in compliance with the nonmanufacturer rule.  Therefore, GAO sustained the protest because the Agency’s decision to set aside the procurement for small business was unsupported.

The first two published sustain decisions in August 2024 were interesting additions to GAO’s body of bid protest case law.  We look forward to discovering what other gems the remaining four August 2024 sustain decisions hold.

We would like to thank Cherie J. Owen, Consultant, for her contribution to this alert.

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