Bid protests continue to rise as agencies take corrective action more quickly

The number of bid protests submitted by vendors to the Government Accountability Office grew by 5 percent in fiscal 2014. But what’s more surprising is the number of cases GAO sustained — that dropped by 4 percent.

Experts in and out of government say the sustainment rate decrease to 13 percent signals a major shift in how agencies view bid protests.

“The decrease in sustainment rate is an interesting thing when you look at it with the fact that the effectiveness rate stayed the same. The effectiveness rate is the number of cases sustained and the number of cases where agencies took action and provided relief,” said Ralph White, GAO’s managing associate general counsel for procurement law, in an interview with Federal News Radio. “The sustainment rate going down means agencies are taking corrective action at a higher rate than last year. This makes perfect sense to me with the volatile situation last year with the shutdown and budget challenges, so having a high rate of agency corrective action on protests is expected.”

White said GAO gives agencies a preliminary opinion on cases and, many times, acquisition officials decide to act before lawyers potentially rule against them.

GAO reported Nov. 19 that the number of bid protests grew by 5 percent to 2,561 last year, up from 2,429 in 2013.

Since President Barack Obama took office in 2009, bid protests are up from 1,989 with continued year-over-year growth, except for 2013 when protests dropped by 2 percent.

Rob Burton, a partner with the Washington law firm, Venable, and a former deputy administrator in the Office of Federal Procurement Policy, said the drop in the sustainment rate also can be attributed to so many incumbents protesting lost contracts as a strategic business decision so they can keep the work for at least another 100 days.

“We’ve seen agencies take more corrective action voluntarily rather quickly, which would reduce the sustainment rate,” Burton said.

In all, GAO sustained 72 cases in 2014. This is down from 87 cases the year before, which equaled a sustainment rate of 17 percent.

The most common reasons GAO sustained cases were:

  1. Failure to follow the evaluation criteria
  2. Flawed selection decisions
  3. Unreasonable technical evaluations
  4. Unequal treatment

White said this was the first year GAO determined the most prevalent reasons why vendors won bid protests. Congress required GAO to include this data in its annual report.

Additionally, GAO said 292 out of the 2,458 cases it closed were from protests of task orders worth more than $10 million.

White said the 292 protests of task orders doesn’t mean 292 task orders were protested. He said GAO saw several large multiple award contracts (MACs), like the Homeland Security Department’s Eagle II IT services contract and the General Services Administration’s Office Supplies 3 strategic sourcing contract, suffer from dozens of objections.

Burton said he was surprised the number of task order protests wasn’t higher last year because so much money goes through these IDIQ contracts.

“Part of the reason why that number is so low is because so much goes through FAR Part 8 under the GSA schedules that debriefings aren’t required, just a brief explanation,” he said. “This is something Congress may want to take a look at.”

Burton said one thing the numbers don’t show is that the increase in protests may be because of the poor job agencies are doing debriefing unsuccessful bidders.

“One thing I’ve noticed is the poor quality of debriefings where the agency doesn’t give the contractor much or any information,” Burton said. “If agencies have more dialogue with industry during the post-award debriefing, I think you would see a significant decrease in the number of protest cases. We’ve had cases where we have recommended a bid protest because the agency showed nothing wrong and was very complementary in the debriefing. We only found out during the protest that there was a fundamental flaw that if the contractor knew about, they wouldn’t have filed a protest.”

Burton said too often agencies think it’s in their best interest to give as little information during a debriefing as possible, when, in fact, the opposite is true.

RELATED STORIES:

Bid protests holding steady, near record highs

Bid protests increase in 2012, nearing 15-year high

Analysis: What the decline in bid protests really means

Series: 10 Myths of Government Contracting

Comments