Friday, January 12, 2018

Bid Protests on DoD Awards are Relatively Rare

The Department of Defense (DoD) commissioned a study by RAND Corporation, a federally funded research and development center, to assess the prevalence and impact of bid protests on DoD acquisitions.

Bid protests have been a feature of Government acquisition environment for decades. When interested parties that are providing goods and services to DoD believe that the department has made an error in choosing the winning bud, they have the right to file protests questioning the outcome with GAO (Government Accountability Office) or the U.S. Court of Federal Claims (COFC).

According to the published RAND report, DoD's bid protest process has come under increased scrutiny. Critics have argued that the department does not have a full understanding of the time and resources that it devotes to bid protests, the costs and schedule delays that it incurs throughout the process, or the incentives in the current process for companies to bid on defense business. Critics have also argued that the current process may encourage frivolous protests and that DoD needs better information on the number, nature, and disposition of protests that it receives.

The 2017 NDAA (National Defense Authorization Act) called for a comprehensive study on the prevalence and impact of bid protests on DoD acquisitions. The study found substantial differences between how DoD and the private sector view these issues. DoD personnel expressed a general dissatisfaction with the current bid protest system. They believed that contractors have an unfair advantage in the contracting process in that they are able to impeded timely awards with bid protests. The rules encourage this behavior by allowing protesters to make an excessive number of weak allegations by permitting contractors too much time to protest and ultimately resolve cases.

Such views are contrasted by contractors, trade associations, and private law firms. The private sector views bid protests as a healthy component of a transparent acquisition process because these protests hold the government accountable and provide information on how the contract award or source selection made.

RAND noted that the percentage of DoD contracts protested was very small, less than 0.3 percent. This small percentage implies that bid protests are exceedingly uncommon for DoD procurements. However, RAND also noted that overall protest activity is increasing and protests by small businesses represent the majority of protests.

RAND made a few recommendations among them including:

  • Enhancing the quality of post-award debriefings.
  • Don't reduce the time available for resolving protests.
  • Consider an expedited process for contracts under $100 thousand.
  • Consider collecting additional data to facilitate future research and decision-making.

You can read the full RAND report here.

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