The current federal government shutdown is on Day 8 as of the date of this post. The section of the Government Accountability Office (GAO) that handles bid protests is included in the portion of the government that is currently shutdown. The GAO has stated on its website that because of the shutdown, certain timeliness rules for filing bid protests will be suspended (also known as tolled) until the GAO reopens. If the shutdown continues to and beyond 10 days, whenever the government resumes full operations there may be a deluge of protests filed all on the same day, as that will be 10 days from the end of fiscal year (FY) 2025 and some protests must be filed within 10 days of when a contractor knew or should have known of the grounds to protest. It is not implausible that some agencies may become so overwhelmed with protests when the federal government reopens that they will have to triage their litigation resources. In such a scenario, agencies may become more inclined to take corrective action, if only because there is a colorable basis to take corrective action and the agency lacks resources to defend that protest.
With respect to whether there could be a spike in protests followed by an increase in corrective actions, consider the following:
- The federal government workforce has been significantly reduced, with more reductions threatened as the shutdown continues, leaving parts of the federal government under-resourced compared to prior years.
- While it is not known to what degree (if any) the FY 2026 Federal Budget will be reduced compared to FY 2025, recent attempts at recission of unspent funds suggests there will be budget cuts.
- Budget cuts would suggest there will be fewer federal awards made in FY 2026 than 2025.
- Contractors with grounds to protest awards they lost towards the close of FY 2025 may be more incentivized to protest to try to secure the opportunities they just missed out on rather than to hope for future opportunities to materialize.
- Depending on how long the shutdown lasts, contractors may have more time than usual to prepare their protests.
- Contractors that do not protest are usually excluded from the opportunity to participate in corrective action.
While there is no guarantee that there will be a spike in the number of bid protests filed when the federal government reopens or a corresponding increase in corrective actions, government contractors considering filing protests may want to prepare for this possibility. This is especially true for contractors who may have been on the fence about protesting before the shutdown as the calculus for protesting may be different when the government reopens.
