For the fifth year in a row, the number of bid protests presented for adjudication to the Government Accountability Office has dropped. In 2018. GAO heard more than 2600 cases. Last year only 1600. What’s going on? Well, the Federal Drive with Tom Temin. turned to the GAO’s Associate General Counsel Ed Goldstein.
Tom Temin: Why are the numbers dropping so much because contracting action numbers aren’t dropping at all. Are more protests simply going to the federal courts instead of the GAO?
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Ed Goldstein: That’s one theory that folks have posited. But it’s not one that seems to be borne out by the numbers, at least what we’ve seen over the years at the Court of Federal Claims, you’ve seen cases bounce around between 120 ,140, 170 cases a year. And our case volume in the last five years has gone, you know, from 2600 cases in 2018 to 1650 odd cases this past year. So you just don’t see, you know, hundreds of cases going to the Court of Federal Claims. At least from the statistics that we’ve gleaned from what’s on their reports on their website.
Tom Temin: Right. So it’s really impossible to tell, because the people that don’t protest don’t come around to tell you why they didn’t. So it’s just a number we can observe.
Ed Goldstein: Absolutely. You know, we don’t know why they don’t protest. There are a lot of theories out there as to why the numbers have been going down. They range from debriefings and enhanced debriefings is one of the big theories right now, I think, in the 2022 NDAA, the House Armed Services Committee actually suggested that they’ve seen a correlation between enhanced debriefings, the use of enhanced debriefings and protest numbers going down. But again, there’s a lot of theories out there. And, you know, I’m not wanting to speculate. We just handle the cases, as we see them and adjudicate the cases that are coming in the door in a fair and efficient manner.
Tom Temin: And maybe the 1102 contracting officers have gotten really, really good. So that everything that they do is just incontrovertible now, or at least all but 1600.
Ed Goldstein: One that’s usually not, you know, positive but you know, I think you have to look at the actual numbers. We’re talking about numbers in the 2600 to 1600 range. But if you look at the numbers, relative to the number of contract actions out there, protests are miniscule in terms of the kinds of things that in theory, you’ve got probably hundreds of 1000s of potential awards and, and modifications and orders being issued that could be protested. And the protest numbers overall, are just kind of kind of small.
Tom Temin: And of the cases that do get to GAO, are most of them post award protests? That is to say they’re not protests of criteria for bids stage protests?
Ed Goldstein: Right, as you indicate, there’s sort of two buckets of protests, we’ve got pre-award protests, which are challenges to the terms of solicitation, sort of what I call the ground rules of the competition. And then you got those post award challenges when the agencies actually made its selection decision, and gone ahead and picked a particular vendor for the contractor to perform. Now. In fact, one aspect of our report each year is to identify sort of the most prevalent grounds of sustains where we actually rule in favor of the protester. And third on the list this year, is actually challenges to the solicitation to the ground rules of the competition. So we don’t actually have a breakdown of you know, where that lies in terms of percentages, but it has been a significant area for sustaining and actually granting protesters’ challenge.
Tom Temin: We’re speaking with Ed Goldstein, he’s associate general counsel at the Government Accountability Office. And looking at the summary chart here, again, 1655 cases in the last fiscal year, and then 455 of them were sustained or denied. That is to say GAO made merit-based decisions on the merits of the arguments. So what happened to the other 1200 cases?
Ed Goldstein: Yeah, that’s always a good question. And I think part of the story is in our chart where we talk about the effectiveness rate, a lot of the cases never make it to a decision, and that’s because they were dismissed on procedural grounds. But a large percentage of the cases are dismissed because the agency voluntarily decides to take some sort of corrective action. And that is they see the protest, they recognize there may be some merit to the protest, and they decide to fix it on their own without going to a full decision. We see that happening in a large percentage of the cases. So you see what we have that effectiveness rate in our chart which is over half. So in of over half of the cases we’re seeing between our sustains and agency taking voluntary corrective action, protestors are getting some some relief and some success, basically, you know, it’s tantamount to a win.
Tom Temin: And that’s kind of a better outcome for everybody, because it’s less friction, less time and expense for everyone involved, and less effort for GAO staff that has to sit through and hear the whole things to conclusion.
Ed Goldstein: Oh, absolutely. Corrective action is a key and vital part of our process. It’s been that way for a long time, we couldn’t issue a decision on 1600 cases a year if we had to go to the full merits, it probably wouldn’t be possible. So corrective action has always been a big part of our process. And again, we also use ADR, alternative dispute resolution where we give rather than going to full decision, we actually will talk with the parties and explain what the likely outcome of the case is going to be. So they can take those either corrective action earlier in the process, or a protestor can decide to walk away where they realize there really is no problem here.
Tom Temin: And what do we know about these corrective actions that agencies take voluntarily, so that the case never does get fully decided by GAO, but they kind of self decide what I’m driving at is, does that mean that they change? Who got the award which could spark another protest? Or do they have some other method of getting everybody out of there happy?
Ed Goldstein: Sure. I’m not sure. At the end of the day, you’re always going to have somebody wins and somebody loses. So somebody is always going to be unhappy. Except in the solicitation arena, where somebody’s challenging the ground rules, they are there’s an area where there’s some potential for sort of a win on both sides. But corrective action, just kind of like our decisions doesn’t necessarily result in the protestor getting the contract, really what we’re looking at is the process and ensuring that the process is being followed, and that the rules applicable procurement statutes and regulations are being followed. So when an agency takes corrective action, what it’s really doing is saying, Hey, we realize that there was a problem with the process. And we’re gonna go and make sure that we follow the process, as set forth in the solicitation as set forth in the Federal Acquisition Regulation by statute, which could result in a different award decision or not. But again, it is another potentially opportunity. It’s another look where a protester is left with nothing. But here’s a second chance, it may actually result in submission of revised proposals, reopening discussions, if those weren’t part of the process initially. And again, another chance to put your best foot forward.
Tom Temin: And the whole idea that there is a protest process built into the whole legal complex surrounding federal contracting, and the fact that agencies half the time make corrective action on their own when protests are filed, even though nobody likes the idea of protests, it still speaks well of the general integrity that’s possible under the system that we have here. I think it’s safe to say. Do you agree?
Ed Goldstein: Absolutely. The protest process is really an integral part of maintaining the integrity of our procurement system, even though the protest numbers are relatively low compared to those indicated compared to the total number of procurements that are out there. contracting officers and contracting teams are always aware that there’s some accountability for their decision making in their actions. And that is key to keeping everyone sort of on the straight and narrow and ensuring that they’re following the procedures in the process. And again, it also creates transparency, which is critical, you know, our decisions are sort of a window into that procurement arena and the procurement process and the award process, which otherwise might not be there. And again, when you soon start shedding light on something, you know, you can evaluate it and see it for what it is.
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Tom Temin: Yeah, those decisions are pretty good reading for us nerds that like that kind of thing.
Ed Goldstein: That’s the first I’ve heard that. Pretty good reading, big protest decisions. They always seem a little dry, but you know, they’re important and for the parties, they also provide really important guidance to the procurement community.
Tom Temin: Well, they’re no more dull than baseball rules and so forth. So if that’s what you’re a fan of.
Ed Goldstein: I’ll be watching the World Series and reading bid protest decisions.
Tom Temin: Not a bad combo. Ed Goldstein is associate general counsel at the GAO.
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