Guam - The Department of Education has until September 30th to finalize contracts for more than $50 Million dollars in projects because the funding expires. While the Department has already secured contracts for a number of the projects, bid protests could cause the Department to loose $2.5 Million of the funds.
$50 million in federal funding for Mid-Continent Airport at risk in dispute, Wichita officials say
Wichita city officials say $50 million in federal funding for a new airport terminal could be lost due to a growing dispute between the two lowest bidders hoping to build the project. Some city officials fear that even a rebid could cause the FAA to pull its funding.
I don't know about the airport situation, but I do know that, in Guam's case, local agencies were by and large sitting in neutral to apply for ARRA let alone mobile procurements to tap into that cash gusher out of Washington. The Department of Education was particularly slow off the mark.
When you plan for a government acquisition, you should plan for known contingencies, such as known weather obstacles, funding cycles, and the like. You know, for instance, that if you need something specially manufactured or delivered from far away that you cannot expect to get it immediately. You plan for the extra time required. Start earlier if you must, to avoid running stop signs.
So it is with protests. You know there is a possibility of protests, so you build into your planning a time contingency for that. And if you have a particularly poor record of being able to put out protest-proof bid documents, especially specifications (which should be a slam dunk if you're only acquiring standard commercial items and routine construction and maintenance that make up the bulk of government purchases), you build in more time. It is a fact of your life that those things will hinder progress.
But it's so much easier to blame the protester than the procurer. And the effect on that blame game: cut down on protests. Make it harder to protest, make 'em pay to protest, create more difficult technical hurdles and time lines to protest.
Is that a good result?
Bid protesting system helps agencies police themselves
Each year, contractors sue the government more than 2,000 times. It's nothing personal, but bid protests are one way of keeping the federal procurement system honest.
"In general, the system serves a very good purpose of helping the government actually police itself," said Steven Maser, a professor of public policy and administration at Willamette University.
Congress and the Government Accountability Office have been encouraging greater transparency in contracting. One way of doing that is giving the unsuccessful bidder the opportunity for a debriefing, in which the contracting agency describes how the bidder failed to secure the contract and how they could be more successful in the future.
"But, you get a wide variety of behaviors across agencies in those debriefings, although the Office of the Secretary of Defense has been taking steps to make that more uniform and encourage more disclosure," Maser said. "What the agencies have some fear of is the more they disclose, the more a company or an attorney for that company will find a basis for a bid protest."
According to Maser, if agencies were more open at the beginning of the bidding process, the likelihood of a bid protest could be reduced. "But again, there's some risk that's inherent in this that they'll never be completely eliminated," he said.
Maser's study revealed that the number of bid protests was increasing, with 2,300 in fiscal year 2011.
That may seem like a lot, but that number should be put into perspective.
"When there's a bid protest, most of them are not sustained," Maser said. "Of those that are sustained, in the great majority of the cases, most of the vendors who originally won will still win." He added that it was rare for the bid protester to be the winner in the end.
Still, Maser said the small number of bid protests that are won, provide good lessons for the acquisition community at large.
"All of the subsequent contracts fall within the shadow of those bid protest results that are sustained," Maser said. "So, when GAO sustains a protest and everybody else pays attention and says 'Oh, I'd better do it that way,' that's some of the good that comes out of the bid protest system."
No model of government contracting that I am aware of (but I make no claim to broad knowledge of such things) has an effective or intended policing mechanism built in to head off defective procurement in real time.
At best, there are audits done down the road and some auditor may, or may not, notice the defect, and may, or may not, say something about it. And if something is said it may, but likely will not, be drawn to administrative attention. And if it is drawn to administrative attention, you can be certain the stink will be shoveled over, no one will be brought to account, and nothing will change to prevent a repeat.
Bid protests are the pills you take every day to prevent disease. Once the system gets systemically diseased, it tends to require major surgery to cut out. Bid protests are, in the big picture, minor inconveniences to avoid larger consequences. As they say in the day trading circles, learn to love your losses.
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