Understanding the not-so-scary state of bid protests

Vendor protests of huge contract awards are probably inevitable, but a federal procurement expert says that’s always been the case.

Shutterstock image (by kmlmtz66): businessman confronting a judge's gavel.

If it seems as though multi-billion dollar federal IT contracts always get hit with protests from bidders that didn't make the final cut, it's because they almost always do. But that's nothing new, said Dan Gordon, a senior adviser to George Washington University's Government Procurement Law Program.

Gordon, who served as administrator of the Office of Federal Procurement Policy and spent almost 20 years in the Office of General Counsel at the Government Accountability Office, said the recent chorus of complaints about the rising number of protests is based on conjecture rather than data.

Lawmakers and others perceive protests as roadblocks to effective procurement. Therefore, in the fiscal 2017 National Defense Authorization Act, the House and Senate Armed Services committees proposed drastic changes to the bid protest process. Those changes included imposing costs on companies that lose their protests.

Yet the perception that bid protests threaten to disrupt the federal acquisition process is inaccurate, Gordon said.

"The number of protests goes up and down, but it is always below 2 percent of procurement," he added. And that percentage has remained pretty much the same for the past 40 years, he said.

Several things can make it seem as though protests are multiplying, however — including the fact that hundreds of thousands of government contracts are awarded every year. And almost all major contract awards — those worth hundreds of millions or billions of dollars — are protested.

Those huge contracts, although rare, are noticeable. Gordon likened them to zebras in the herd of the thousands of workhorse contracts the federal government awards every year.

"People are saying that there's a high risk of a contract [worth] more than $1 billion getting a protest," he said. "That was true 20 years ago."

The way GAO keeps track of protests doesn't help. Multiple filings against the same contract are counted as separate cases, so although there might be a dozen or more protests, only one procurement is being delayed, Gordon said.

GAO rejects most protests almost immediately because they can't be supported by the company. "Protests are mostly noise," Gordon said. "The great majority of them are not disruptive to the system."

That doesn't mean there are no problems with protests, however. Gordon said better data could help Congress gauge protests' true impact on the procurement process.

It's unclear, for instance, whether the number of protests against bigger contracts has actually risen in the past decade. It's not an easy number to understand because a "big" contract for the U.S. Forest Service is simply a year's supply of printer ink for the Defense Department.

Gordon said understanding what's happening with those contracts would require an in-depth, agency-by-agency look. And so far, no one has crunched that data, he added.

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