GAO Bid Protest Effectiveness Hits 47%–So Why Doesn’t Bid Protest “Reform” Address Government Shortcomings?

GAO bid protests succeeded almost half the time in Fiscal Year 2017.

According to the GAO’s latest Bid Protest Annual Report, the effectiveness rate of GAO bid protests was 47% in the recently-completed fiscal year.  The statistics are striking, because they come just as Congress is finalizing the 2018 National Defense Authorization Act, which includes measures aimed at reducing bid protests.  But with bid protests succeeding at a nearly 50% clip, why does the protest “reform” debate seem to center almost entirely on discouraging contractors to protest, rather than on decreasing the number of flawed source selection evaluations?

The GAO’s annual report indicates that 17% of protests were sustained in Fiscal Year 2017.  That’s the stat that will get bandied about by those who contend that protests are largely frivolous.  “Less than a fifth of protests get sustained!” they’ll say.  But using the sustain rate as evidence of protest frivolity is misleading.

When a protest is filed at GAO, the procuring agency has two options: fight the protest, or voluntarily take “corrective action” to address the flaws alleged by the protester.  Although agencies rarely say it out loud, a decision to take corrective action typically is a tacit admission that the evaluation was flawed.  In other words, the agency counsel has reviewed the protest and thought, “I’m not sure I can win this one.”  When an agency has a losing hand, corrective action is the right move.

The GAO knows this, and uses the effectiveness rate statistic to measure how often the protester obtains “some form of relief from the agency . . . either as a result of voluntary corrective action or our Office sustaining the protest.”  And as I mentioned at the outset, that all-important statistic was at a sky-high 47% in FY 2017.  That’s higher than in any recent year, although not a major outlier: the effectiveness rate has been 43% or higher since FY 2013.

Recently, Congress has been debating so-called reforms to the bid protest process.  I discussed the proposals in-depth in a July post, but the underlying rationale appears to be that protests are ever-increasing and typically frivolous.  Thus, protest “reform” is aimed almost entirely at discouraging contractors to protest in the first place–or outright prohibiting certain protests.  For example, the 2017 National Defense Authorization Act jacked the GAO’s jurisdictional threshold for most DoD task and delivery order protests from $10 million to $25 million.  Lose a $22 million DoD order?  Sorry, no protest allowed.  The Senate’s versions of the 2017 and 2018 NDAAs would have imposed other poorly-conceived restrictions.

Why is there a popular belief that protests are both pervasive and frivolous?  The discussion seems driven by the sky-is-falling comments of some agency officials, who make it sound like every other acquisition is being frivolously protested. One former high-ranking official even went full-on Scarlet Letter and suggested creating a “shame list” for losing protesters.  (Hint: the result of every GAO protest already is available on the GAO’s website).

Sure, it stinks when you’re the contracting officer on the receiving end of a protest, but the fact remains that protests only occur on a very low percentage of acquisitions.  Headlines like “Drowning in Protests” may catch some eyeballs, but they’re not particularly factual.  Indeed, GAO protests were down 7% in Fiscal Year 2017, while the effectiveness rate was up.  But you probably won’t see many articles with headlines like “Not Drowning in Protests.”

That’s not to say that frivolous protests never occur, although GAO has the power to deal with that problem on its own.  My point, rather, is that protest “reform” efforts seem to focus almost entirely on getting contractors to protest less often, without acknowledging that some of the best ways to decrease protests involve internal government reforms rather than punitive measures directed at contractors.

What could government be doing to reduce protests?

Well, when 47% of protests succeed (despite the protester having the burden of proof!) it means that evaluators are messing up a lot of source selections.  Also, when the GAO’s stats suggest it’s essentially a coin flip as to whether a protested source selection was defensible, that’s reason for a potential protester to move forward, even without a slam dunk initial case.  Improving source selection training and processes would improve the underlying source selections, which would be the best thing anyone could do to reduce protests.

Additionally, as OFPP has pointed out, improved communication with industry–particularly in debriefings–is likely to reduce protests, as well.  In debriefings, agencies often act like they’re guarding Coke’s secret formula, rather than discussing the outcome of a competitive procurement.  Our clients sometimes come away from post-award debriefings with little more than a just-the-facts-ma’am recitation of the minimal information required by FAR 15.506–or worse, a PowerPoint debriefing in which three-quarters of the slides simply regurgitate generic information about the FAR and solicitation’s evaluation factors.  I understand the agency’s thought process (“the more information we give them, the more they’re likely to use it against us”), but it’s often dead wrong.  The client walks out of the debriefing (or closes the PowerPoint slideshow) feeling as though the agency is hiding something.  In my experience, minimalist debriefings increase protests.

Congress seems to recognize that OFPP may be on to something, because the conference version of the 2018 NDAA includes a provision entitled “Enhanced Post-Award Debriefing Rights,” which would require the DoD to provide additional information in certain debriefings.  Unfortunately, this provision is limited to DoD awards of $100 million or more, although small businesses and “nontraditional contractors” could request an enhanced debriefing in the case of an award exceeding $10 million.

The move toward enhanced debriefings is a step in the right direction, but I worry that it won’t be enough to address the underlying issue–and not just because enhanced debriefings will be limited to large DoD procurements. So long as many agency officials believe that the best policy in a debriefing is to supply the bare minimum required by law, offerors may still walk away with the sense that the agency is hiding something.  Congress can’t legislate a culture change, but that’s really what’s needed to make debriefings truly effective in reducing protests.

Like any other contracting process, the bid protest process should always be evaluated to see if it can be improved.  But the GAO’s statistics (and those compiled by others) make very clear that the sky isn’t falling.  I’m not suggesting a public “shame list” for agency officials who poorly plan or execute an acquisition.  But instead of squawking about how bid protests are ever-increasing and frequently frivolous, acquisition officials ought to get their own houses in order first.