Earlier this month, GAO issued its Bid Protest Annual Report to Congress for Fiscal Year 2017. The Annual Report provides data on the protests filed with the GAO, including a summary of the most common grounds for sustaining protests.
GAO received 2,596 cases in FY2017, as compared to 2,789 the previous year. This is the first year since 2013 that the number of cases filed at GAO has gone down. GAO sustained 17% of protests filed in 2017. The most common grounds for sustaining protests were: “(1) unreasonable technical evaluation; (2) unreasonable past performance evaluation; (3) unreasonable cost or price evaluation; (4) inadequate documentation of the record; and (5) flawed selection decision.” This list only takes into account those protests in which GAO actually reaches a decision on the merits; it does not include those protests that are resolved by voluntary agency corrective action. GAO held hearings in only 17, or less than 2%, of its cases.
However, in 47% of the protests filed, GAO either sustained the protest or the agency took voluntary corrective action. This means that in approximately 1,220 protests, the protestor obtained some form of relief from the agency. Because the sustain rate is relatively low, this figure shows that the agency is voluntarily taking corrective action quite often.
It is important to note that, in most instances, GAO does not learn why the agency is taking corrective action, because agencies are not required to report the reasons they take voluntary corrective action to GAO. However, in most instances, the agency takes corrective action because it has determined that there was a flaw somewhere in the procurement process that needs to be addressed. It may be related to issues raised by the protestor, or it may be because of an unrelated issue that was identified by agency legal counsel once they’ve taken a closer look at the procurement.
As we’ve previously discussed, Congress is in the midst of debating reforms to the bid protest process for DoD contracts, aimed at reducing the number of “frivolous” and speculative protests against Defense procurements filed at the GAO. Many of the proposed reforms in the Senate version of the 2018 National Defense Authorization Act have been removed by the conference committee. However, what remains in the bill that came out of conference – and will need to be voted on by Congress – includes a significant overhaul of the post-award debriefing process that would require Defense agencies to provide substantially more information to offerors than what is currently required under the FAR, which would go into effect 180 days after the law is enacted. It also includes a 3-year pilot program, beginning October 1, 2019, that will require protester payment of costs for denied GAO bid protests of DoD procurements, if protester has revenues over $250 million. The House has already agreed to the conference report and the Senate is expected to vote on it this week. Thus, it seems likely that if the Senate also agrees to the conference report, these proposed changes will be enacted into law, which could have a significant impact on bid protests in the coming years.
Berenzweig Leonard is teaming up with Red Team Consulting for a monthly newsletter featuring upcoming contracts, key protest decisions, legal updates, events, and more. This post was published in the November 2017 Monthly Insights newsletter. To sign up for Monthly Insights, please click here.