Protests protect procurement system (Part 2)

In "Silence of protestors' bark signals new era" [FCW, Feb. 22], Steven Kelman revels in the "changing nature of the relationship between the government and IT vendors." He is glad nobody protested two recent IT procurements. He applauds contractors that voluntarily relinquished their due process rights.

Kelman does not like bid protests, and he offers a compelling parade of horribles: Protests are expensive and time-consuming. In protest litigation, civil servants twist in the wind, subject to the whim of greedy attorneys, soiling the well of the government/industry partnership. Protests prompt risk-averse behavior - such as source-selection documentation - in agency procurement shops.

On these points, I take no issue. Nonetheless, Kelman misses the mark. If Kelman merely wanted to chronicle the death of the protest regime, he ignored ample ammunition. The volume of General Accounting Office protests continues to plummet, from more than 3,000 protests in 1993 to about 1,500 in 1998. Early returns in 1999 show another 10 percent decline so far, according to GAO.

It is unclear what prompted this dramatic trend. Has the specter of past performance intimidated contractors obsessed with pleasing evaluators? Have popular procurement vehicles, such as multiple-award indefinite-delivery, indefinite-quantity contracts, limited contractors' protest rights? Do flexible, commercial-like purchases, whether below the $2,500 micropurchase threshold or the $100,000 simplified acquisition threshold, avoid scrutiny in the same manner that they eschew competition? Has increased contracting officer discretion rendered protests futile?

Kelman advocated these policies in the spirit of saving money and obtaining best value for agencies and taxpayers. But that's not good enough, and therein lies Kelman's blind spot. What Kelman overlooks is that protests - challenges of contract award processes and decision-making - help reinforce the integrity and impartiality that define our procurement system. We boast that our procurement system allows all responsible firms to compete for work based upon stated government requirements. We take pride that source-selection officials judge offers on their merits, using stated evaluation criteria without regard to irrelevant considerations.

Protests serve to correct incidents of, at best, inadvertent or, at worst, illegal, arbitrary or capricious agency action. That's a public good, where the annual stakes are $200 billion of taxpayer money.

Our procurement system demands meaningful competition. Yet agency contracting professionals, faced with pressure to fill vital needs, are insufficiently motivated to maximize competition. Kelman sympathizes with the harried procurement corps and, accordingly, prefers increased efficiency to full and open competition. Fortunately, when vendors are assured an impartial system to hear their complaints if they believe agencies are not conducting procurements properly, their willingness to compete increases. Kelman dismisses this theory.

For decades, we've used the term "private attorneys general" to describe protestors, and others, who keep our government honest by pursuing their own self-interest. In the 1970 landmark case Scanwell Laboratories Inc. v. Shaffer, the court explained that contractors, injured by arbitrary and capricious government actions, protest to "vindicate their very real interests while at the same time furthering the public interest."

Foreign governments, which join Kelman in deriding our burdensome protest regime, marvel at the integrity demonstrated by our procurement process. But, like Kelman, they dismiss the connection. Private attorneys general police a remarkably pristine contract formation system without the cadre of resident auditors, inspectors and others that burden our contract administration or performance processes.

In economic terms, the protest regime is a bargain. Sure, a few Washington, D.C., law firms thrive on the practice. But I challenge Kelman to demonstrate that an alternative compliance regime would be more cost-effective. I have not heard much clamoring for an increased presence of inspectors general. Could a governmental oversight system operate more quickly than the 100 days that the GAO is allowed to resolve protests?

I won't quibble with Kelman that we may have too many protest forums. I'll join him in pursuing meaningful protest reform. But don't vilify contractors or the bar for providing a public service unless you are willing to pay the freight associated with the alternatives.

Kelman likened losing bidders that did not protest big awards to Sherlock Holmes' famous case of the dog that did not bark. Mute canines may make pleasant house pets, but they are lousy watchdogs.

-- Schooner is associate professor of government contracts law at the George Washington University Law School. He previously served as associate administrator for procurement law and legislation in the Office of Federal Procurement Policy.


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