Kelman: The return of the protest

We should remember our history lest we repeat it and return to the bad days of frequent protests.

The information technology community is teetering on a precipice from which it could slip and fall back to the bad old days when disappointed vendors routinely filed protests.

My view of bid protests has always been the same as President Clinton’s view of abortions — they should be legal, safe and rare. They should be legal and safe because occasionally the government is egregiously unfair to a bidder or egregiously incompetent. We need protests as a safety valve for such situations.

But bid protests should also be rare. Bid protests are not a natural feature of the buyer/seller relationship in a free market system. First, they subvert a free market system that promotes the welfare of the buyer — in this case the government — by how it allows seller to gain business. The system is subverted if the seller gains business by litigating rather than satisfying the customer. The more business a seller can gain through litigation, the more the seller is likely to hone its legal skills rather than its job performance skills. Second, bid protests undermine the partnership between a customer-oriented vendor and a government customer. That partnership model became the basis of the federal procurement reform movement of the 1990s.

Finally, we saw the sad spectacle of a feeding frenzy when bid protests ran rampant in the mid-’80s to the mid-’90s.Highly paid K Street lawyers harassed civil servants under ruthless cross-examination, and lawsuits occurred any time an incumbent contractor lost a rebid. Meanwhile, the old contract continued as long as the litigation continued. So-called greenmail was a frequent occurrence as bid protesters negotiated cash payments from winning vendors in exchange for withdrawing their lawsuits.

We are in danger of returning to such a world. Longtime Federal Computer Week readers will recall that FCW’s pages were once filled with sagas of bid protests. After the General Services Administration Board of Contract Appeals lost its jurisdiction over IT bid protests with the passage of the Clinger-Cohen Act, protest stories all but disappeared. But FCW readers today will notice that stories about protests are beginning to appear again and with greater frequency. Sen. Susan Collins (R-Maine) has proposed contracting legislation that contains a sensible provision requiring the government to debrief unsuccessful offerers on task orders worth more than $5 million. But Collins’ bill also contains an unfortunate provision that allows losing bidders to protest task orders. At a time when the contracting workforce is so short-handed, I can think of no lower priority for contracting professionals’ time than preparing to defend more lawsuits.

To have a protest system that is legal, safe and rarely used, we need rules that presume the government will act with propriety. Agency awards should not be overturned for nitpicking errors. And we need a culture in industry that discourages routine protests. It is an act of statesmanship for the IT Association of America to publicly oppose task-order protests. ITAA should complement that with a forthright statement that, even in these difficult times, its members seek to win government business by satisfying government customers, not by suing them.

Kelman is professor of public management at Harvard University’s Kennedy School of Government and former administrator of the Office of Federal Procurement Policy. He can be reached at steve_kelman@harvard.edu.

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