Wednesday, November 8, 2017

GAO To Begin Charging a Filing Fee for Bid Protests

Beginning sometime next year (2018), the GAO (Government Accountability Office) will begin charging $350 to anyone filing bid protests. Currently, there is no charge for filing. For some contractors, the cost may be even higher. There is a provision in the Senate version of the 2018 National Defense Authorization Act (NDAA) that would require unsuccessful bidders to pay the cost for unsuccessful protests filed against the Defense Department (this applies to companies with revenues in excess of $100 million).

The ostensible reason for levying this new fee is to help offset the cost of development, operations, and maintenance of a new electronic protest docket system (EPDS). $350 per filing will bring in about $1 million a year based on historical filing totals - not nearly enough to cover the costs but every little bit helps. Besides, Congress mandated that GAO begin charging fees.

Some cynics suggest that the real purpose behind the new filing fee is to discourage frivolous protests. You will recall that last August, the GAO took the unprecedented step of suspending a firm from filing protests for one year because it had filed 300 bid protests over a four-year period and 150 protests in fiscal year 2016 alone (see GAO Suspends Firm From Filing Bid Protests For a Year). None of these protests were sustained and most were dismissed without merit. Since that suspension was lifted, the formerly suspended firm has already filed five new bid protests. For a protestor filing hundreds of protests per year, a $350 filing fee may be a deterrent.

For most companies filing bid protests, a $350 filing fee will not be a deterrent to filing. When tallying up the costs of a bid protest, especially if outside counsel is engaged, $350 will be represent a very immaterial portion of the total costs.

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