Takeaways
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More than 99.7% of DoD contracts are not protested.
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More than 42% of the protests filed against DoD acquisitions are “effective.”
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Protests filed at the GAO are closed on average in 41 days.
On December 21, 2017, following the completion of a nearly year-long research study mandated by section 885 of the FY 2017 National Defense Authorization Act (NDAA), the RAND National Defense Research Institute (RAND) released its final report analyzing the DoD bid protest landscape. (Note Pillsbury’s analysis of the most recent NDAA for FY 2018 can be found here.) As part of the study, RAND conducted both a qualitative and quantitative analysis, reviewing nine years of bid protest data and providing perspectives, trends and recommendations for improving the bid protest process.
Differing Perspectives
RAND’s qualitative analysis included both a literature review of published materials and discussions with relevant subject-matter experts from the U.S. government, industry, and the legal sector. Predictably, the RAND study found a vast disparity in how the government and industry viewed the bid protest process. The RAND report noted that DoD personnel expressed “general dissatisfaction” with the current bid protest system while private-sector representatives viewed bid protests as “a healthy component of a transparent acquisition process.”
The perception among DoD personnel was that contractors could unfairly impede timely awards with bid protests because: (1) contractors could file protests based on “weak” allegations, (2) contractors had too much time to protest, and (3) the protests themselves took too long to resolve.
In contrast, industry representatives argued that protests served to “hold the government accountable” and shed light on the award decision. Industry stakeholders interviewed for the RAND study noted that the poor quality of debriefings, characterized as “skimpy,” “adversarial” and “evasive,” contributed to an increased likelihood of protest.
Interesting Findings
The RAND study’s quantitative analysis compiled procurement and bid protest data from the Government Accountability Office (GAO), U.S. Court of Federal Claims (COFC), Congressional Research Service, and Federal Procurement Data System, highlighting insights and tends. Although the data showed an increase in DoD protests over time, the overall percentage of DoD contracts protested was less than 0.3 percent, a figure leading RAND to conclude that bid protests are “exceedingly uncommon” for DoD procurements. The RAND study noted that among the various ranges of contract values identified by the GAO, the most protests were filed for acquisitions valued between $100,000 and $5 million, although the percentage of protests per procurement increase at higher contract values.
Further, despite the increase in protests in the analyzed years between FY 2008 and FY 2016, the RAND study found that the effectiveness rate of GAO bid protests, i.e. the number of protest actions that were either sustained or resulted in corrective action relative to all protest actions (excluding requests for reconsideration) had remained steady, hovering around 42%. This stability of the bid protest effectiveness rate led RAND to conclude that “firms are not likely to protest without merit.”
Another interesting finding in the RAND study was the high number of small business protests. More than half of protest actions at both the GAO and COFC were brought by small business protesters. Although small business protests were more common, they were also less likely to be effective and more likely to be dismissed for legal insufficiency.
The RAND study also found:
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Almost 27% of the GAO protests were pre-award protests.
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70% of incumbents’ protests for task orders are effective.
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DoD overrides less than 2% of the acquisitions that are stayed by a GAO protest.
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In nine years of GAO protests, only one request for reconsideration was granted.
Recommendations from the RAND Study
The key recommendations from the RAND study are:
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Increase the quality of post-award debriefings.
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Use caution in considering reductions to the GAO’s decision deadline that is already tight.
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Use caution in considering further restrictions to task-order bid protests, because these protests have been found effective.
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Implement an expedited process for adjudicating what are essentially “small claims”—protests of procurement contracts less than $100k.
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Improve the protest process for small business, possibly by requiring legal counsel.
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Collect additional data to inform future bid protest process “reforms.”
Conclusion
The recommendations from the RAND study, while limited, are sound. An increase in the quality of debriefings would almost certainly decrease the number of bid protests that are already “exceedingly uncommon.” Further, limiting the GAO’s decision timeline would be impracticable, based upon the tight constraints already placed on the system. Indeed, the tight 10-calendar day deadline for filing bid protests and insufficient quality of debriefings are probably key contributors to the government’s perception of contractors filing “weak” allegations.
Similarly, further limitations for task order protests that have an overall higher rate of effectiveness would make little sense. Substantial dollar amounts are awarded via these task orders, and the protest process provides a critical oversight function that is necessary to enhance transparency and confidence in the federal acquisition system. While an expedited system for protesting low-dollar value procurements seems logical, it remains to be seen how such process could be effectively implemented.
Further consideration regarding how to improve the protest process for small businesses without counsel is warranted, including providing information regarding the jurisdictional rules for filing a protest. Finally, the procuring agencies should collect additional data on protest actions to inform future protest process initiatives, so that such reforms are based upon data, rather than potentially misguided anecdotes.
