Just a few days ago, GAO issued its annual bid protest report for fiscal year 2019. Overall, while the volume of bid protests was down from previous years, the effectiveness rate of bid protests remained steady at close to 50%.
Why does GAO issue this yearly report? In short, statute mandates it. Congress is particularly interested in knowing 1) which federal agencies didn’t follow GAO’s recommendations in bid protests and 2) each instance in which GAO did not decide a protest in 100 days. In this regard, GAO was “pleased” to report that all agencies followed its recommendations, when given, and that it timely (i.e., within 100 days) decided all bid protests.
But the report doesn’t stop there. It also provides some interesting data about GAO’s bid protest docket.
Perhaps the most remarkable statistic in the report is the number of new bid protests filed: 2,198. Compared to FY 2018, this figure represents a 16% decline.
Why such a sharp decrease? The report offers no answers, but we have a few theories.
For one, the 2018 National Defense Authorization Act required DoD, for certain procurements, to provide expanded information in debriefings and to give unsuccessful offerors the right to ask post-debriefing questions. So, perhaps, better information has rendered some protests unnecessary, as some protests are filed to better understand why an offeror lost out on an award. Of course, this probably doesn’t explain the whole decline, because the 2018 NDAA only affected DoD procurements.
Another possibility is the 35-day Government shutdown in December 2018 and January 2019. Although GAO continued to operate during this time, perhaps the break in normal operations curtailed the number of awards made or curbed offerors’ appetites to protest a given procurement.
Also, the decline might be explained by the general trend toward contract consolidation—i.e., the Government is issuing larger, but fewer, contracts. That is, if the federal government issues fewer contracts, then one would expect the number of protests to go down.
These ideas may be part of the story. But it’s also possible that FY 2019 was an anomaly and protests will rise again. After all, as the report shows, there is a certain amount of fluctuation, year-to-year, in the number of bid protests filed with GAO. In 2015, protests were up 3% from the year before. In 2016, they rose another 6%. They then declined by 7% in 2018, and increased slightly in 2018.
In addition, the report notes that GAO sustained 13% of the protests it received last year. This percentage isn’t unexpected because, over the past several fiscal years, GAO’s sustain rate has fluctuated between 12% and 23%. For example, in 2015 the sustain rate was 12%. But in 2016, the rate jumped 11 points to 23%–only to fall back to 17% in 2017. The rate again fell slightly in 2018 to 15%.
More important than the sustain rate is the effectiveness rate which, for FY 2019, hit 44%. (Over the past several fiscal years, the rate has remained between 44% and 47%.) The effectiveness rate captures the protests in which a protester obtained some form of relief–either from the agency taking voluntary corrective action or GAO sustaining the protest. So, protests–far from being worthless–continue to provide a protester with a good prospect of unwinding an award and getting a second chance at becoming the awardee. Indeed, in nearly half the cases, the protester was, essentially, successful. Those are rather good odds.
Lastly, the report offers some insight into the arguments that GAO finds most persuasive–i.e., the most prevalent grounds for sustaining protests. These include: 1) unreasonable technical evaluation; 2) inadequate documentation of the record; 3) flawed selection decision; 4) unequal treatment; and 5) unreasonable cost or price evaluation.
Overall, GAO’s report is positive news. GAO is efficiently moving through its bid protest docket. And, importantly, bid protests continue to be an effective means to obtain redress for mishandled procurements.
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