Bid protests in the federal government have increased 60 percent since fiscal 2008, but their success rate has declined.
Former U.S. Chief Technology Officer Aneesh Chopra is not a fan of the contracting community’s increasing reliance on bid protests as a means to delay new contracts and capture taxpayer dollars as long as possible.
“This protest thing really ticks me off; it is so pathetic,” Chopra said Oct. 6 on a panel hosted by Nextgov and Government Executive. “It’s absolutely absurd how the culture of Ph.D. procurement physics works in this town. Ninety percent of them don’t actually go anywhere but they delay everything.”
Chopra made the remarks on a panel assessing President Barack Obama’s IT legacy. In an increasingly competitive market amid government shutdowns and dwindling budgets, bid protests in the federal government have increased 60 percent since fiscal 2008. But their success rate—how often the Government Accountability Office sustains them—has declined from 21 percent in fiscal 2008 to 13 percent in fiscal 2015, according to Deltek data.
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GAO said contractors filed 1,652 protests in fiscal 2008; they filed 2,639 in fiscal 2015. Those numbers led top contracting officials at the General Services Administration to suggest in August that agencies should build protest periods into their contracting schedules.
“I’m just resigned to the fact that this is how it’s going to be,” Tiffany Hixson, regional commissioner of the Northwest Region of GSA’s Federal Acquisition Service, said at an August event held by the Association for Federal Information Resources Management.
Chopra’s point that 90 percent of protests “don’t actually go anywhere” is close: 87 percent of bid protests filed with GAO are not sustained. But contractors don’t have to win a bid protest for it to have been worthwhile, according to data from Deltek.
The effectiveness rate, a term Deltek uses to describe the percentage of closed protests in which a protester obtains some variant of relief from the agency, has increased from 42 percent in fiscal 2008 to 45 percent during the last budget cycle. That relief could be an agency opting to make a voluntary corrective action.
“We should just throw the whole thing out, it’s so frustrating,” Chopra said. “We should have a shame list and shame the private vendors who protest and don’t win.”
Trey Hodgkins, senior vice president of the Information Technology Alliance for Public Sector, pushed back on Chopra’s assessment, stating the bid protest system is in place to ensure government “effectively and legally completes transactions.”
While Hodgkins agreed it can be a “frustrating process,” he said it is necessary because there are instances “where government makes mistakes” in awarding contracts. Hodgkins added he’s hoping the next presidential administration can tackle the bid protest issue and “not allow it to be abused.”
“It is annoying at many instances, but it is there for a purpose,” Hodgkins said.
Aaron Snow, who formerly headed GSA's 18F, suggested a solution that wouldn’t require wholesale policy changes. Large procurements, like the OASIS contract vehicle that received 20 bid protests, are inherently going to receive more protests than smaller, more agile procurements, Snow said. Smaller, incremental procurements are the norm at 18F, and those procurements can be tied together for larger-scale projects. This methodology should both reduce risk and decrease time to market.
“The $100 million procurements will have lots of protests and take a long time, and the government has to be very careful and the stakes are higher,” Snow said. “The amount of time it takes for a $2 million procurement is orders of magnitude in difference.”
Following the back-and-forth panel conversation, Chopra seemed to have a more middle-of-the-road view.
“We need a risk-based thoughtful process to root out bad behavior going forward,” he concluded.
In the interim, the bid protest landscape is already changing for contractors. In September, the Senate let some of GAO’s authority to handle bid protests expire. The office’s jurisdiction over civilian agency task and delivery orders valued more than $10 million lapsed, though its authority over defense orders remains intact. The Senate could take the issue up again when it returns to session, but at the moment, contractors with complaints will have to raise the matter with the agency as no outside forum currently has jurisdiction to review disputes about these task orders.
Corrected: This article has been updated to reflect the GAO's sole jurisdiction over civilian agency task orders worth $10 million or more.
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