Thursday, March 10, 2016
Abuses in the Bid Protest System?
Can the bid protest system be abused? It seems like it can. One company, Phoenix Environmental Design has filed 23 bid protests in the last fifteen months (although some were later withdrawn). Is it possible for one company to be victimized so many times in such a short period? Or is something else going on?
In the latest published case involving Phoenix Environmental Design (PED) the company protested the issuance of a purchase order to a competitor for the provision of herbicide chemicals for use on public lands for BLM (Bureau of Land Management). Phoenix alleged that it was prevented from bidding because the Department of Interior (DOI) did not provide adequate notice of the solicitation.
In this case, the amount of the award that the protestor felt cheated out of was a paltry $22 thousand. We don't know what it cost the contractor to submit a protest nor do we know what it cost the Government to respond to a bid protest nor do we know what it cost the Comptroller General to hear the case and write the decision. But, it wouldn't surprise us if those costs exceeded $22 thousand. The DOI provided two attorneys and the GAO provided two attorneys and we don't know the level of effort expended by DOI contract administration to prepare and submit documentation in response to the protest.
How much profit might have been contemplated or included in a $22 thousand purchase order? Given that the solicitation was competitive, probably not much. Bidders were probably sharpening their pencils. The solicitation isn't designing and producing the next generation bomber. All that was required in this case was for some company to order up some herbicide and deliver it to the Bureau of Land Management. That would be as low a risk contract as one could imagine.
So, what is PED's track record with its 23 bid protests? Eight were denied, six were dismissed, seven were withdrawn, one is as yet undecided, and one was sustained. The one that was sustained was an appeal that a purchase order to deliver bags of fertilizer to a Veteran's cemetery should have been set aside for SDVOSBs (service-disabled, veteran-owned small businesses). We don't know whether PED ultimately received that delivery order. The Comptroller General simply asked the VA to re-solicit and limit bidders to SDVOSBs.
Probably a sure bet that now, when a bid protest arrives from PED, those attorneys in the Comptroller General's office roll their eyes and run the other way as fast as they can.