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Saturday, May 28, 2011

The problem when doing business with the government is none of your business

Bid Protests Increase; OFPP Works on Building Communication
According to an article in Federal Times, the Government Accountability Office reported that 2010 was the third year in a row where bid protests increased by more than 15 percent.

So what’s behind the uptick?

The process for challenging the awarding of a contract can boil down to financial reasons, but often a messy bid-protest fight points to a lack of communication between the government and industry. A bid protest can be a last, desperate measure to wrest information from a tight-lipped contracting official about requirements.

In fact, Stan Sloane, CEO of government-contracting giant SRA International, has urged for bid-protest reform.

“While implemented to ensure transparency and accountability in the acquisition process,” he wrote in a 2009 editorial, “protests are costly to the government, taxpayers and business.” And making changes to the bid-protest process could go a long way toward the administration’s goals of cutting contracting dollars.

Michael Golden, a procurement lawyer for Washington, D.C., firm Pepper Hamilton reiterated that point. “Companies are protesting because they really don’t understand why they lost, and they assume the worst,” he told Federal Times.

The administration’s point person for government-industry relations is Office of Federal Procurement Policy Dan Gordon, whose “strongest direction to agencies has been to communicate more with businesses,” Federal Times reports.

Gordon has characterized his efforts to enhance communication between government and industry as a “myth-busting” campaign, because often federal program managers often believe a tight-lipped response is warranted or required by regulations.

Bid protests prompt calls for dialogue with vendors
Last year marked the third straight year in which bid protests over disputed contact awards grew by more than 15 percent, according to the Government Accountability Office, which adjudicates protests.

The reasons for the trend are several.

For one, agencies increasingly ball up their anticipated procurements into a single, multiyear contract that is awarded to a select group of vendors from which orders are placed. That means the stakes are higher for companies because a single contract decision can decide their future business with an agency.

In addition, these multiyear contracts are often quite complex, particularly for information technology services. And that has become a challenge for federal procurement staffs, who often lack sufficient experience and training.

Finally, Congress in 2008 expanded the ability of companies to protest not only contract awards, but also the more numerous task orders and delivery orders that are placed against those contracts. About half the growth in protests is attributed to GAO's expanded responsibility to hear disputes on contract task and delivery orders worth more than $10 million.

The proliferation of protests has made agencies more meticulous with their requests for proposals, but it has not generally affected what types of contracts they use, industry groups said.

Dan Gordon, administrator of the Office of Federal Procurement Policy, has been telling agencies to break up some of their larger contracts and to stop trying to write "protest-proof" procurements. But his strongest direction to agencies has been to communicate more with businesses.

Over the last few months, Gordon has been making the rounds at federal conferences and contractor luncheons, encouraging pre-award discussions so companies understand an agency's procurement needs and post-award debriefings to clarify why losing bidders didn't make the cut.

Despite the frustration of losing a contract, most contractors don't rush into protests because of the delays they add to the procurement process, industry groups said.

GAO's use of alternative dispute resolution, an informal analysis that gives the agency or protester a sense of where problems lie, doubled between 2008 and 2010.

Ralph White, GAO's managing associate general counsel for procurement law, said he expects the number to go up.

"When we can find a way to creatively solve a dispute, we will," he said.

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