Common knowledge about procurement protests more myth than fact

Ralph White — Managing Associate General Counsel for Procurement Law, GAO

Procurement protests have a reputation for bogging down the Government Accountability Office with frivolous objections at rates that take weeks or months to process.

Ralph White
Ralph White

According to GAO though, that’s not the case, and it may be the exact opposite in some instances. Studies have shown that protests are rare and make up only 0.5 percent of all procurements and take less than the 100-day period GAO has to make a decision to resolve them.

In an interview on In Depth with Francis Rose, Ralph White, the managing associate general counsel for procurement law at GAO, said that common knowledge about protests are “completely demonstrably not accurate” and  took time to break down some of the myths surrounding them.

Procurement protests aren’t at their highest

According to White, members in industry feel that protests rates are at the highest they’ve ever been. The reality is that 2015 is only the 11th highest year of protests over the course of the last 30 since they’ve been monitored.

What White said is true is that protests were highest in 1994, before they started dropping.

“One of the things that’s happened was the passage of the Federal Acquisition Streamlining Act which created a preference for multiple award task order contracts, and no forum,  not GAO and not the court of federal claims, had jurisdiction to hear protests about those procurement,” he said. “Protests fell steadily over the next seven years to a low in about 2001. They stayed at the fairly low level and started back up around 2008.”

All big procurements aren’t being protested

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Since protests are less frequent than commonly believed, White said media coverage of  large procurements contribute to the sense that there’s a higher number of them protested than there actually are.

“One of the interesting things is that perception is so widely spread that we’ve actually seen news stories in the last year when a protest wasn’t filed,” he said.

White said that protests for big procurements this year add to the misconception.

“There was a very large procurement conducted by NASA for the award of the … commercial crew carrier contract in which NASA was going from three contractors to two to build a vehicle to take astronauts back and fourth to the space station,” White said. “Sierra Nevada [one of the procurement applicants] filed a protest when they were excluded in the pool of contractors when it went from three to two.”

That protest generated significant press and media coverage, but White said there are “plenty of large procurement where it doesn’t happen.”

Small businesses make up a large number of protests

Protests submitted by small businesses have been on the rise, and White said they take up close to 45 percent of  case loads.

“Part of that is because a company is not required to hire an attorney to file a bid protest they can come here and basically in a letter in plain English what their complaint is,” he said.

White said it’s because there are a fair number of small businesses that want a better explanation for why they weren’t selected.

“Sometimes they feel that they don’t get that, or sometimes they don’t understand why the award didn’t go to the lowest priced offerer, and sometimes it needs to be explained why that agency made that decision,” he said.

The rate of sustained protests is actually dropping

According to White, the rate for protests that are sustained have dropped and the effectiveness has increased over the last two years. He said that has to do with two numbers GAO tracks.

“It is either cases we sustain — which you can see the exact number of fiscal ’14, that was 72 — or they are cases where the agency voluntary took corrective action in the face of a protest rather than go forward to a decision,” he said.

Overall, GAO is addressing protests in an average of 30 days, which beats the required stature they must have them completed by. White says it has to do with agencies efforts to “do a better job at debriefing unsuccessful offerers on why they weren’t selected for the award.”

“If we’re talking about a single award contract and there are six or seven or eight offerers or vendors, most businesses understand that six or seven of them are going to lose and only one of them are going to win,” White said. “I think business people understand that, and if agencies do a good job of explaining why they made the decision they made, unless the company feels they had flatly get it wrong, I think that they sometimes can hear that and walk away from the procurement without filing a protest.”