When Can an Agency Reasonably Rely on an Offeror's Representations?

Often, a disappointed offeror has reason to believe that an awardee cannot meet the solicitation requirements. In these instances, the offeror may initiate a bid protest alleging noncompliance as a basis for contesting the agency's award.

However, the Government Accountability Office (GAO) recently reiterated its position that an agency's reasonable reliance on the offeror's representation will generally result in denial of the protest. The decision, Sea Box, Inc., B-420130, B-420130.1 (Nov. 18, 2021), provides guidance to contractors on what is needed to refute an assertion of reasonable reliance and illustrates why this may be a high hurdle to cross.

The Sea Box protest stemmed from a solicitation for Tricon II freight containers. The Request for Quotation (RFQ) included the Buy American Act (BAA) Balance of Payments Program Certification DFARs 252.225-7000 and 252.225-7001. Thus, the offerors were required to certify that the end products (the Tricon II freight containers) were either domestic, from a qualifying country, or foreign.

Under the applicable DFARs, if the end product was identified as foreign, the agency was to apply a 50 percent evaluation factor. Sea Box and competitor W&K both responded to the RFQ and certified that their containers were domestic. The award was ultimately made to W&K.

In its protest, Sea Box alleged that W&K's containers were not domestic and therefore the 50 percent evaluation factor should have been applied to W&K's quote. As support for its assertion, Sea Box argued that the agency was aware that W&K had previously "erroneously certified" that its containers met the BAA requirements. Sea Box further argued that it was unreasonable for the agency to rely on W&K's certification because Sea Box had provided specific notice in the form of (i) a prior GAO protest in which the certification issue had arisen and (ii) an email from Sea Box to the agency.

In response, the agency justified its award by explaining that W&K's quotation included a BAA certification, affirmation that it would provide a domestic end product, and included the CAGE number of a domestic manufacturer. Thus, the agency asserted, it had reasonably relied on W&K's representations in determining that the end products would be domestic and the 50 percent factor not applicable.

Siding with the agency, the GAO reiterated that by certifying its end product would comply with the BAA, W&K was bound to meet the certification requirements in performance of the award. Further, the GAO noted that it is reasonable for an agency to rely on such a self-certification without investigation unless the agency has information prior to award that would lead to the conclusions that the end product would not comply with BAA.

Here, the GAO held that neither the earlier protest nor the emails Sea Box referenced were adequate to warrant investigation and that the agency reasonably relied on the self-certification. Specifically, the GAO found that the previous protest addressed a different type of container (a Quadcon) and was withdrawn, consequently, the merits of the protest were never addressed and it couldn't serve as "information" prior to award that would require looking beyond the self-certification.

Regarding the Sea Box emails, the GAO determined that they contained only allegations without factual support and therefore also did not warrant investigation beyond the self-certification. In sum, even though Sea Box believed it had adequate reason to believe the awardee could not comply with the BAA, it failed to provide sufficient factual support to overcome the weight of W&K's self-certification and the agency's ability to rely on that certification.

Key Takeaways

The key takeaway from this protest is that overcoming an agency's ability to reasonably rely on an offeror's representation is high. To prevail with a protest alleging misrepresentations and improper reliance by an agency, the protestor should present factual assertions refuting the representation to the agency prior to award so that the agency has an opportunity to question and look beyond the self-certification.

Examples of factual assertions would include a photograph of the end product marked "Made in Taiwan," as referenced in the GAO's decision. Failing to raise these issues early—giving the agency reason to investigate—will hamper a protestor's ability to prevail, as the agency's reliance on the offeror's representations will likely be deemed reasonable.

Once award has been made, any allegations of noncompliance do not relate to the agency's reasonable reliance, but rather become a matter of "contract administration," e.g., the awardee's ability to comply with its contractual requirements, and therefore the dispute will fall outside of the GAO's bid protest jurisdiction.