Tracking the latest developments at the GAO and Court of Federal Claims
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In Protection Strategies Etc. International, LLC, B-423539 (Aug. 25, 2025), Protection Strategies, a service-disabled veteran-owned small business (SDVOSB), filed a pre-award protest challenging the terms of a solicitation issued by the Defense Counterintelligence and Security Agency (DCSA) for background investigation support services. The protester objected to the agency’s decision to issue the solicitation as a general small business set-aside, rather than reserving it for SDVOSBs or another small business subcategory. It also raised concerns about the solicitation’s risk structure, particularly the use of a fixed-price contract model and the alleged lack of guaranteed funding for phase-in activities.

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In Percipient.ai, Inc. v. United States, U.S. Court of Appeals for the Federal Circuit, No. 2023-1970 (Decided Aug. 28, 2025), Percipient.ai challenged a task order award by the National Geospatial-Intelligence Agency (NGA), alleging that the government violated 10 U.S.C. § 3453—a statutory preference for commercial items—by failing to fairly consider its AI platform. But Percipient had not submitted a bid, teamed with a prime, or otherwise participated in the procurement process. The core legal question became: Can a company that never submitted a proposal still be an “interested party” with standing to protest under 28 U.S.C. § 1491(b)(1)? A Federal Circuit panel initially said yes. The government appealed, and the court took the case up en banc, ultimately reversing course.

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In Advanced Technology Systems Company v. United States, U.S. Court of Federal Claims, No. 25-515C (July 16, 2025), Advanced Technology Systems Company (ATSC) protested the Navy’s award of a contract for a nationwide maritime surveillance system in Egypt to Forward Slope, Inc. (FSI). ATSC argued that the Navy’s best value determination was flawed, that it used a vague and inconsistent past performance evaluation framework, and that the agency disregarded highly relevant subcontractor past performance. The Court agreed, finding that ATSC had established multiple procurement errors that were both irrational and prejudicial, even though injunctive relief was denied due to national security concerns.

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After the GAO indicated it would likely sustain Perimeter Security Partners’ protest challenging a task order award for access control point maintenance, the Army took corrective action—but only after filing its agency report and participating in alternative dispute resolution (ADR) with the cognizant GAO attorney.  Perimeter then requested reimbursement of its protest costs, arguing that its grounds were clearly meritorious and that the agency unduly delayed in taking corrective action. The GAO agreed, finding that the agency should have acted earlier based on the protest record, and that all protest grounds were intertwined and not severable. (Perimeter Security Partners, LLC—Costs, B-422666.2, Aug. 8, 2025)

The Decision
The GAO granted the protester’s request for reimbursement of costs, ruling that:

  1. Protest Grounds Were Clearly Meritorious: GAO determined that at least two protest grounds—the disparate treatment in past performance evaluation and the flawed best-value tradeoff—were not just viable but likely to result in a sustain. GAO had advised the parties of this in an outcome prediction ADR session, and confirmed that the agency’s evaluation decisions were inconsistent with the record and evaluation criteria.
  2. Corrective Action Was Unduly Delayed: GAO emphasized that corrective action is only considered “prompt” if it’s taken before the agency report is due. Here, the Army waited until after ADR and multiple rounds of briefing. That delay unnecessarily increased protest costs, which GAO seeks to discourage.
  3. Agency’s Arguments Were Unpersuasive: The Army argued that because GAO did not promise cost reimbursement during ADR, it shouldn’t be required to pay. GAO rejected this, clarifying that cost entitlement flows from undue delay, not from ADR participation. The agency also failed to show that any protest grounds were clearly severable, so GAO awarded full cost reimbursement.

Key Takeaways for Contractors

  1. You May Be Entitled to Protest Costs, but Only If the Protest Was Strong: GAO will only recommend cost reimbursement where protest grounds are clearly meritorious, meaning the agency had no defensible legal position and should have seen it early.
  2. Delay Can Cost the Government: If the agency waits until after briefing or ADR to take corrective action, even if it avoids a formal sustain, it may still have to pay the protester’s legal and consultant fees.
  3. All-or-Nothing Depends on Severability: Protesters can recover all costs if their successful claims are intertwined with the rest of the protest. If claims are clearly separate and weak, GAO may reduce or deny reimbursement for those portions.
  4. Participation in ADR Does Not Waive Cost Claims: An agency’s voluntary ADR participation does not shield it from protest cost liability. Protesters should not be discouraged from requesting costs just because ADR was used.
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In Economic Systems, Inc., B-423747, et al. (Aug. 22, 2025), Economic Systems, Inc. (EconSys) protested the Department of the Interior’s decision to issue a sole-source purchase order to Government Retirements and Benefits, Inc. for a retirement benefits software platform. EconSys argued that it offered a platform with identical functionality and that the agency’s justification for limiting competition was both flawed and based on incorrect assumptions. The protest raised an important procedural issue: how and when a protester can challenge a sole-source announcement, particularly when the agency’s notice includes ambiguous or mixed messaging about vendor responses.

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In SOFITC3, LLC v. United States, U.S. Court of Federal Claims, No. 24-2064C (August 21, 2025), incumbent contractor SOFITC3 challenged the Department of Homeland Security’s (DHS) award of a cybersecurity contract to Delviom, arguing that the agency’s evaluation was flawed on several fronts. SOFITC3 claimed that Delviom had improperly combined two separate FEMA contracts into a single “engagement” in its corporate experience submission, in violation of the solicitation requirements. It also alleged that DHS evaluated the proposals unequally by assigning strengths to Delviom that were not equally credited to SOFITC3’s similar technical content. Lastly, SOFITC3 argued that Delviom’s staffing plan was noncompliant and that the awardee’s price should have been rejected as unrealistic. The Court rejected all of these arguments, finding the DHS evaluation to be reasonable, well-documented and consistent with the solicitation. Notably, the Court found that the term “engagement” was patently ambiguous, meaning SOFITC3’s failure to challenge it before submitting its proposal resulted in a waiver.

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In CAN Softtech Inc. v. United States, U.S. Court of Federal Claims, No. 24-1009C, July 29, 2025, CAN Softtech Inc. (CSI) protested the General Services Administration’s decision to cancel its award for IT support services for the Air Force, alleging that the agency’s corrective action—terminating the award and re-soliciting the requirement—lacked a rational basis. The court partially agreed, finding that while the initial reevaluation decision was reasonable, the later cancellation and resolicitation were arbitrary and unsupported. This case offers a strong reminder that agencies cannot simply invoke vague “ambiguities” to justify wiping the slate clean.

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Emissary LLC, the incumbent contractor, protested the Department of Defense’s Washington Headquarters Services’ award of a contract to Gemini Industries for technical support services to the Office of the Assistant Secretary of Defense for Special Operations/Low-Intensity Conflict. (See emissary LLC, B-422388.3, et al., July 29, 2025.) GAO sustained the protest, finding that the agency conducted a flawed technical evaluation, improperly credited past performance, and failed to evaluate the impact of an OCI mitigation plan that altered the awardee’s technical approach. This is a rare case where a protester prevailed on both evaluation and organizational conflict of interest (OCI) grounds, offering a roadmap for what can go wrong when agencies rush or overlook key details in an awardee’s proposal.

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In TYD Services, B-423648, July 30, 2025, TYD Services, the incumbent contractor, protested the Army Corps of Engineers’ decision to award a vehicle leasing contract in Qatar to a competitor, Rahman Group, Inc. TYD was excluded from award because its proposal was found technically unacceptable. TYD argued that its past performance as the incumbent should have sufficed, and that the agency should have either overlooked or clarified its missing proposal content. GAO disagreed, providing a harsh reminder that even incumbents must fully comply with all proposal instructions—no matter how minor they may seem.

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In Addx Corp., B-423633, July 23, 2025, Addx protested the Air Force’s issuance of a task order to KL3 LLC under the OASIS+ small business IDIQ contract. Addx challenged both the evaluation of its proposal and an alleged ambiguity in the solicitation, but GAO dismissed the protest as untimely, offering a clear reminder of two procedural pitfalls: (1) the risk of filing an agency-level protest instead of going straight to GAO, and (2) the requirement to raise patent ambiguities before the proposal deadline.

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