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Too Late to Speak Up: GAO Dismisses Sole-Source Protest for Inaction

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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.

The Decision
The GAO dismissed the protest, ruling that:

  1. Was the Protest Timely? Yes: The agency argued that EconSys’ protest was untimely because it was filed more than 10 days after the sole-source notice was posted. But GAO disagreed. It held that the notice invited capability statements—even though it said “this is not a request for quote or information.” That invitation extended the protest deadline to the closing date listed in the notice (July 25), and EconSys filed its protest before that date.
  2. Was EconSys an Interested Party? No: Although the protest was timely, GAO dismissed it because EconSys never submitted a capability statement to the agency. GAO reiterated that a vendor must timely express interest and demonstrate capability before it can challenge a sole-source action. Submitting that information only in the protest filing itself—and not directly to the agency—isn’t enough.
  3. GAO Rejects “Protest = Capability Statement” Argument: EconSys argued that its protest (with an attached declaration about its platform’s features) should count as its capability submission. GAO flatly rejected this, explaining that the protest process is not a substitute for market engagement, and GAO will not act as a conduit for vendor communication.

Key Takeaways for Contractors

  1. Read Sole-Source Notices Carefully, Then Respond Directly: If a notice includes any language inviting responses, even if it’s not labeled a “request for quote,” you must submit a capability statement directly to the agency to preserve your protest rights.
  2. Don’t Rely on GAO to Deliver Your Message: Protest filings do not count as capability statements. You must communicate your interest and technical qualifications to the agency itself, not just through GAO.
  3. Timeliness Hinges on Whether the Notice Invites Responses: If the notice invites vendor input, you typically have until the closing date to protest. If it doesn’t, the 10-day rule applies. This distinction matters, so read the notice closely.
  4. Interested Party Status Has Two Prongs: To be heard at GAO, you must (1) be capable of performing the work and (2) have actively expressed that interest to the agency before the closing date.
  5. Sole-Source Challenges Require Procedural Precision: EconSys may have had a valid product, but procedural missteps kept its protest from ever getting off the ground.