Thursday, January 30, 2014

GAO To Start Charging Filing Fees for Bid Protests

Tucked within the omnibus budget bill signed by the President earlier this month was a provision authorizing the GAO to begin charging a filing fee for companies filing bid protests. This filing fee is to pay for a new online docketing system as well as the cost of operating the new system. The new system will replace the manual process now in place for reviewing thousands of protest-related e-mails.

Although the legislation does not specify the amount of the filing fee, the GAO's managing associate general counsel for procurement law estimated that the fee will be in the neighborhood of $250 but warned that the figure might change depending upon the price of the system and the features that GAO ultimately adds to the system.  A couple of years ago, the GAO, based on market research, estimated an electronic system would cost about $450 thousand per year to operate and a $250 filing fee would cover that cost. The math doesn't work however. $450 thousand divided by 2,500 cases works out to $180 per case. Perhaps the GAO is expecting that with the filing fee, the number of cases filed will drop.

This new filing fee is not likely to deter companies from filing bid protests. In the scheme of things, especially when one considers the cost of attorney fees, this fee is not significant. It might deter those companies who know their chances of prevailing are slim but choose to protest anyway on the off-chance that things will go their way.

In a related matter, the GAO announced that it has cleared its backlog of bid protests caused by last Fall's Government shutdown. That furlough, affecting the majority of GAO's staff, caused the Agency to miss its 100 day deadline for deciding protests.

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