Analysis: What the decline in bid protests really means Jason Miller
GAO released its latest report to Congress Jan. 2 on the number of bid protests for 2013. GAO said it received 2,298 bid protests in 2013, of which 509 went all the way through the process to a decision. GAO sustained 87 total cases, or 17 percent of all bid protests. This was the first time since 2006 that the number of bid protests didn't increase year-over-year.
At the same time, agencies continue to cut the amount of money they spend on goods and services. Preliminary estimates by GAO show agencies spent about $460 billion last year—more than a 10 percent decline as compared to 2012. These latest bid protests and spending figures provide little evidence of what many believed would be the case: as agencies cut procurement spending, more vendors will protest to GAO or the Court of Federal Claims.
Dan Gordon, a former administrator in the Office of Federal Procurement Policy and a GAO procurement attorney, and now the associate dean for Government Procurement Law at The George Washington University Law School in Washington, said the real measure is the effectiveness rate and what happens to the other 900-plus protests that don't go through the entire process. Gordon said he's researching at GWU on what happens to the contractors when the agency agrees to take corrective action instead of going through the bid protest process.
"We are still working the data. There's a significant percentage where it looks like the protester did get the contract and in that sense it was very much an effective process," he said. "It's not clear to me yet whether that's 20 percent or maybe as much as 23 or 24 percent of those 940 cases last year that were dismissed because the agency took voluntary corrective action," Gordon said. "In a great majority of the cases, it looks like the agency took corrective action, GAO dismissed and then the protestor did not get the contract."
Ralph White, the managing associate general counsel for procurement law at GAO, said the effectiveness rate shows agencies and vendors have a solid understanding of the likelihood of success in a bid protest. GAO said it was effective in 43 percent of all cases, increasing by one percent for the first time since 2009. "I think it is significant because it is a percentage of all cases filed," he said. "It does tell us that in a fairly high number of cases, the government is looking at the complaints that have been raised and making a decision about whether to continue to defend against that protest or to proactively take steps to address the situation."
For the first time, GAO analyzed the most common reasons why it sustained a protest. White said in the past the agency had surmised the causes, but never looked at it analytically.
GAO found the top reasons were:
1. Failure [of the agency] to follow the solicitation evaluation criteria.
"That one is interesting to me because it seems agencies should be able to see that. It might be even higher if you thought about all the cases where agency lawyers advised their agency to take corrective action rather than defend those," White said.2. Inadequate documentation by the agency to how it reached its conclusions.
"When I first thought about it, I was thinking about it in three separate ways. Sometimes there is inadequately documented source selection decisions; sometimes there's inadequate documentation of past performance assessment; or inadequate documentation of a technical conclusion. No matter where it's coming up, it's the same problem: not really documenting and explaining the basis for the conclusion," he said.3. Unequal treatment of offerors.
4. Unreasonable price or cost evaluation. [See prior post on this subject.]
In a report from Lexology, the “summary of the most prevalent grounds for sustaining protests” found in the GAO report mentioned above is discussed:
GAO annual report shows protesters achieve the most success with evaluation process-related protest grounds by Richard B. Oliver, Jason A. "Jay" Carey and Luke W. Meier, of the law firm McKenna Long & Aldridge LLP
GAO’s most recent Bid Protest Annual Report to Congress, for fiscal year 2013, indicates that protesters are achieving more success by challenging process-related issues than in attacking an agency’s evaluation judgments as unreasonable. The Report also shows that GAO is receiving an increasing number of task order protests and is holding fewer hearings.You can find all Bid Protest Annual Reports to Congress, going back to 1996, here.