It’s no secret to anyone that the landscape of federal government contracting has been rapidly changing in recent years. For instance, there have been concerns that mentor-protégé joint ventures under the SBA’s Mentor-Protégé Program have been too successful. More recently, changes have been made to small business contracting goals to reduce the agency level requirements for small disadvantaged business (including 8(a) Program) prime contracts. Today, based on a recent GAO report, we are going to take a look at the current state of GAO bid protests which, if you didn’t know, have been around for nearly a century!
GAO Bid Protests, Generally
For the most part, the total number of bid protests brought to GAO each year has been on a downward slope in the past ten years with an overall decline of approximately 32%. During that time period, there was a high of 2,789 protests during FY 2016 and a low of 1,658 protests during FY 2022.
The report, based on testimony by Kenneth Patton, Managing Associate General Counsel for GAO, notes that GAO resolves over 1,000 bid protests each year within the 100-day timeline required by 4 C.F.R. § 21.9, (in our experience, not having a decision within that 100-day period of time is an extreme rarity). In 2024, 23% of protests were addressed on the merits. This means they had reached a final decision and weren’t dismissed whether due to corrective action, the protest being withdrawn, or insufficiency. In FY 2024, 16% of protests were sustained, while 52% overall were considered “effective” with effective meaning the protester received some type of relief from the agency, which includes sustained protests and protests that resulted in corrective action.
Interestingly, with the exception of 2023, roughly half of all GAO protests annually were regarding DOD procurements even though protests of DOD procurements have declined at a faster rate than bid protests in general. And, even though around half of all GAO protests are for DOD procurements, those protests only include—at most—1.5% of all DOD procurements.
Section 885
The report also discusses potential reforms to the bid protest process as required by Section 885 of the 2025 National Defense Authorization Act (NDAA). Before going further into the topic here, it is important to note that although Section 885 applies to DOD procurements only, the discussions here give some insight into the temperature of GAO protests overall.
Pleading Standards
Section 885 required GAO to consider enhanced pleading standards that protesters must meet before receiving access to administrative records for DOD procurements. However, as noted by GAO, the pleading standards currently allow GAO to dismiss legally insufficient protests early in the protest process. Nonetheless, GAO proposed to “enhance the existing pleading standards to make it clearer that protest allegations must be credible and supported by evidence.” Therefore, GAO proposed to clarify and enhance its pleading standard to require that protesters must provide credible allegations supported by evidence that are sufficient, if uncontradicted, to establish the likelihood of the protester’s claim of improper agency action.
Why does GAO need new pleading standards if the current ones have been successful for many years? Well, overall, there seems to be great concern regarding frivolous protests, with particular nods to the concerns of the House Armed Services Committee and Congress. But the data shows that around 50% of bid protests are effective. And GAO is of the belief that the remaining 50%, although not successful, are largely not considered frivolous.
So what is considered frivolous? Citing to established precedent, GAO defines this as when the protester bases its case “on arguments or issues beyond the reasonable contemplation of fair-minded people, and no basis…in law or fact can be or is even arguable shown.” A case may also be frivolous when the protester “has not dealt fairly with the court, has significantly misrepresented the law or facts, or has abused the judicial process by repeatedly litigating the same issue in the same court.”
In on our firm’s experience, it is worth noting that, just because a protest based on the same issue is filed multiple times does not necessarily mean it is frivolous. For instance, there are situations where corrective action has been taken which didn’t appear to correct the underlying issue giving rise to an earlier protest. Thus, as noted by GAO, it will generally only consider a protest to be frivolous when it has been filed in bad faith.
Fee Shifting
Section 885 also required GAO to consider implementing a process that would require unsuccessful bid protesters to pay the government’s protest related costs and contract awardee’s lost profits for protests of DOD procurements. We previously blogged about this potential change here. However, for many reasons, GAO does not believe that shifting fees to an unsuccessful protester would have a positive impact on government transparency, accountability or efficiency. In fact, just the opposite. And that doesn’t even touch on the negative impact that it would have on small businesses and a procurement system. Regardless, GAO made two suggestions to the DOD in response to Section 885’s requirement that GAO consider shifting the government’s costs in defending an unsuccessful protest. GAO made the following suggestions to:
- Implement a focused statutory requirement for DOD to include a contract provision that would permit DOD to recoup–or otherwise withhold–profit or fee from an incumbent contractor if the incumbent files a protest, the agency awards the incumbent an extension of its incumbent performance during the pendency of the protest, and its protest is subsequently dismissed as legally or factually insufficient or for otherwise being procedurally infirm; and
- Authorizing GAO to require a protester whose protest is dismissed as legally or factually insufficient or for otherwise being procedurally infirm to reimburse DOD for the costs incurred in handling the protest, as well as any lost profits incurred by the awardee whose contract was stayed during the pendency of the protest.
Either way, GAO would be looking at material statutory and administrative changes to put these into effect.
These recommendations were given to the DOD, but DOD made the decision to not go forward because the additional costs associated with data collection to even move forward with the recommendations to determine their viability would cost more and have a greater administrative burden than the benefit derived. And that doesn’t even take into consideration the additional costs that would result from putting this process into practice.
Conclusion
So, what is the overall takeaway from this report? First, it demonstrates that the GAO bid protest process, though not perfect and becoming less common over time, can be a cost-effective and reliable avenue for federal contractors to raise concerns with the procurement process. It also makes it clear that agencies are concerned about the costs spent defending or litigating a bid protest. But GAO and the DOD don’t believe implementing fee shifting and strengthening the pleading standards are the best way to move forward.
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