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Will new GAO rules increase bid protests?
Apr 22, 2003
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by Andrew Mohr
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The role of bid protests has changed over time. For many years, protests were very much a part of the fabric of government contracting. A losing bidder, upset at the award of a government contract to a competitor in apparent violation of the Federal Acquisition Regulations, would file at the General Accounting Office (GAO) a protest against the award of the contract. The GAO, a hybrid arm of Congress, would review the protester's complaint and the agency's administrative report, then issue a decision either dismissing or denying the protest, or sustaining it and recommending corrective action.
As recently as 1990, more than 3,300 protests were docketed at the GAO. Now, protests are much more rare. As you can see on the chart, bid protests have continued to decline over the last several years, although protests may well have bottomed out as seen from the increase in the number of protests in FY 2002.
The “merits decided” column shows the number of protests actually decided by the GAO, so that in 1997, for example, of the 1,852 protests filed, the GAO decided only 501; the remainder were either summarily dismissed as inappropriate or withdrawn by the protester.
The “sustained” column shows the number of protests that the GAO granted and recommended corrective action. The number of cases “sustained” does not reflect cases where a protest was filed and was then dismissed because the agency took corrective action. Corrective action could include clarification of a specification, additional discussions, re-evaluation of offers, inclusion of an offer in the competitive range, or a re-competition. If corrective actions are included, then the effectiveness rate of protests increases to about 33 percent.
Explaining The Trend
Probable reasons for the decrease in bid protests are:
• The increase in use of GSA Schedules, which are more difficult to protest. Generally, an agency's intention of placing a GSA Schedule order is not publicized in FedBizOps, making it harder for challengers to submit a competing bid. Likewise, an agency's award of a GSA Schedule order is not publicized in FedBizOps, also making it much harder to file a timely protest within the 10-day automatic stay period.
• The move to commercial items generally. Subsequent to the Federal Acquisition Reform Act, agencies have shifted considerably from unique specifications to commercial item buys. This has generally simplified matters and largely eliminated specifications as a grounds of protest.
• The GAO's rules that encourage debriefings before filing a protest and better agency post award debriefings. Before the GAO changed its rules to allow contractors to timely file at protest after debriefings, losing bidders sometimes filed protests just to protect their rights. Now they can wait until after a timely requested debriefing to file. And since debriefings often clarify why the vendor lost, the bidder is less likely to file a protest.
• Greater use of agency level dispute resolution. Agency protests are now treated with more consideration by agency procurement officers. This allows a protester to settle the matter at the agency level instead of proceeding to the GAO.
• GWACs. The rules governing Government Wide Acquisition Contracts do not provide for protests to the GAO if a GWAC contractor is disappointed in an agency mini-competition.
• Fewer RFPs. A Request for Proposal, or RFP, is the traditional procurement method of large procurements. Relatively complex in process, with numerous steps and weighted evaluations, RFPs are vulnerable to protest. With a much lower head count in the ranks of procurement officers, agencies are conducting fewer RFPs and instead are relying on GSA Schedules and GWACs.
• Disinclination of ticking off the agency in a time when marketing, and thus client relations, are king. The growing use of GSA Schedules has elevated the importance of good contractor-agency relations. Fearful that protesting a customer will ruin chances for new business, some contractors are averse to exercising their protest rights.
Why the increase in protests this last year and the run up this year so far? Probably firms are hungrier for business during the recession. Moreover, with a recent revision in the rules governing the kinds of protests that GAO will consider, the declining trend in protests may well be over.
Responsibility Revisions
Effective January 1, 2003, the GAO revised its rules to state that it will now consider protests based on affirmative responsibility determinations. This is a big change. For years the GAO has considered protests against an agency's negative responsibility determinations.
For example, you were found responsive to the solicitation's mandatory criteria, were evaluated as best value, but the agency found you not responsible. You could protest that negative finding. But until now, you could not protest the agency finding your competitor responsible, even though you knew in your heart that your competitor had the business ethics of Saddam Hussein and the financial capability of flea circus.
Curiously, a Contracting Officer is not required to make a separate affirmative determination of responsibility; the mere signing of the contract shows that the contractor was found responsible. On the other hand, the Contracting Officer must make a separate writing supporting a negative responsibility determination.
Andrew Mohr is a partner in the law firm of Cohen Mohr LLP in Washington, DC, and specializes in government and commercial contracts. His practice includes GSA schedules, multimedia contracts, trademarks and copyrights, regulatory analysis and compliance, bid protests, and claims. He can be reached at (202) 342-2550, fax (202) 342-6147, or amohr@cohenmohr.com.
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