What a Relief: GAO’s FY 2021 Bid Protest Statistics Indicate That Nearly 50 Percent of Protests Are Effective

McCarter & English Blog: Government Contracts & Export Controls

On November 16, 2021, the Government Accountability Office (“GAO”) issued its Bid Protest Annual Report for Fiscal Year 2021 (“FY 2021 Bid Protest Report”). The GAO’s annual Bid Protest Report to Congress—required under the Competition in Contracting Act—provides federal contractors a snapshot of the GAO’s bid protest metrics for the just-ended fiscal year, along with data on the previous four fiscal years for comparison. The following chart from the FY 2021 Bid Protest Report provides a five-year retrospective summary of the GAO’s bid protest statistics:

Below are our key takeaways from the FY 2021 Bid Protest Report:

  • The Protest Effectiveness Rate Remains High. Although suffering a slight decrease from the record-high 51 percent effectiveness rate in FY 2020, the GAO’s 48 percent effectiveness rate for FY 2021 (e., the rate at which a protester obtains some form of relief at the GAO as a result of either a sustained protest or voluntary agency corrective action) continues to outpace the average effectiveness rate over the past five fiscal years (46 percent) and the ten-year average (45 percent).
  • FY 2021 Case Filings Drop. Of the 1,897 cases filed in FY 2021, bid protests accounted for 1,816 of the filings, compared to 2,052 protests filed in FY 2020. The remainder of the cases filed during FY 2021 constituted costs claims (43 filings) and requests for reconsideration (38 filings). Compared to FY 2020, the total number of FY 2021 cases filed dropped by 12 percent, representing a significant drop from the high of 2,789 cases filed in FY 2016 and continuing the downward trend in case filings beginning in FY 2019. A key factor in the drop over the past two years can likely be attributed to the continuing impact of the COVID-19 pandemic. However, another potential factor may be the mandatory use of enhanced debriefing techniques in Department of Defense procurements, as this process is intended to provide disappointed bidders with a better understanding of an agency’s evaluation process so that a would-be protester can more effectively weigh potential protest grounds.
  • The Sustain Rate Remained Consistent. The GAO’s rate of issuing written decisions that sustains protests on the merits remained at 15 percent for FY 2021—reflecting a consistent hover between 13 percent and 17 percent in three of the last five fiscal years. The most common bases for sustaining protests in FY 2021 were: (i) unreasonable technical evaluation; (ii) flawed discussions; (iii) unreasonable cost or price evaluation; and (iv) unequal treatment. Even though “unreasonable technical evaluation” and “unreasonable cost or price evaluation” have remained the most prominent grounds of successful protests over the past few years, this appears to be the first year that “flawed discussions” has been included as one of the top four protest grounds. On the other hand, two of the most commonly successful protest grounds from the GAO’s FY 2020 list—flawed solicitation terms and unreasonable past performance evaluation—did not make the FY 2021 list. Remember, the low sustain rate is somewhat deceiving because – as noted above – the overall effectiveness rate sits at 48 percent — some 33 points higher than the sustain rate.
  • Protests of Task and Delivery Orders Represent a Sizeable Portion of the GAO’s Docket. Of the protests filed in FY 2021, 401 concerned task and delivery orders, thus constituting a significant portion (22 percent) of all protests filed this past fiscal year. The percentage of task and delivery order protests as a part of all protests filed in FY 2021 continued its gradual increase over the past two years: in FY 2019, these types of contracts accounted for 18 percent of all protests; in FY 2020, task and delivery order protests accounted for 20 percent of all protests. This percentage increase remains surprising based on the current GAO jurisdictional threshold of $25 million for protests of Department of Defense task or delivery orders, but it may be better explained by the overall decrease in FY 2021 and 2020 case filings, as, despite the increased percentage of FY 2021 task or delivery order protests (as a portion of all protests), the number of task and delivery order protests in FY 2021 (401) decreased from the prior fiscal year (419).
  • Alternative Dispute Resolution Was Slightly More Successful and Hearings Increased. While the GAO employed ADR in fewer cases during FY 2021, the process was slightly more rewarding for protesters this past fiscal year, with a success rate of 84 percent compared to the FY 2020 success rate (82 percent). The number of hearings actually increased in FY 2021 (13 compared to 9 in FY 2020) but were held in only 1 percent of the cases filed, thus continuing the GAO’s rare use of hearings in litigating protests.

The GAO bid protest process continues to offer federal contractors a remarkably consistent chance (nearly 50 percent!) for some type of relief—likely in the form of an agency’s voluntary decision to take corrective action. But even when corrective action is taken, protesters must keep in mind that ultimate receipt of the contract award is not guaranteed, as agencies have a wide degree of latitude in fashioning the corrective action. But an agency’s voluntary decision to take corrective action almost half of the time supports our view that protests remain a very useful tool for contractors.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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