Lifting the ‘cone of silence’ to avoid bid protests

Industry says bid protests are a problem and some vendors are preparing to file a complaint at the same time they are developing a bid.

Government officials contend bid protests aren’t a problem, and the outcomes of the process are exactly as intended — acting like a check and balance for the system.

Both sides are correct, and both sides are simplifying the issue and adding to a growing challenge across government.

If you only look at bid protests by the numbers, a very small percentage of federal procurements actually are brought before the Government Accountability Office or the Court of Federal Claims.

GAO reported in December that vendors submitted 2,639 protests in fiscal 2015 — up 3 percent over 2014 and an increase of only 286 since 2011 — out of tens of millions of transactions worth about $440 billion.

But at the same time, as vendors see more multiple-award, high-dollar contracts, and the continued shrinking of the federal procurement pie, they are more apt to protest those high-dollar, long-term and high-profile programs, thus creating the current perception that there are too many protests.

What we have here is a case of perception is reality, and the issue is on a path to get worse before it gets better.

“Whether or not this level of protest will increase, that’s a real speculative prospect. I just don’t know,” said Sean O’Keefe, a former NASA administrator, Navy Secretary and chairman of Airbus Group, during an event March 2 in Washington, sponsored by the Center for Strategic and International Studies. “There is a limited number of opportunities, a limited number of competitive occasions and it’s always part of a structured strategy to develop your recourse on the front end at the same time you are developing your proposals. That behavior will not stop until such time that there is some dramatic shift in how that ought to be proposed.”

O’Keefe’s last point on the dramatic shift comes back to something I’ve written about several times over the last few months — the ongoing communication breakdown between government and industry.

Former Office of Federal Procurement Policy Deputy Administrator Rob Burton, now an attorney with Venable, offered a window into an interesting experience he had for how a little more communication could solve a host of problems.

The CSIS event drove home a similar point.

“The mechanism that is most useful for the purpose of avoiding a misunderstanding or reinterpretation is, of course, an opportunity for a lot more dialogue during the course of proposal development,” O’Keefe said. “That, in turn, has the effect of clarifying what the intent is, what the approach the department may be seeking in terms of the results of the outcome they are looking for, and ensuring there be no language within the RFP that would be open for really drastic reinterpretation or misinterpretation in a way that prompts a bidder to go down the wrong alley on determination of how to do this.”

While dialogue seems like a rational course of action, O’Keefe said too often it becomes part of the structured process, meaning the lawyers outnumber the contracting officers and acquisition experts.

“As a result, it is structured purposely to say there is nothing that could be possibly interpreted so therefore you are driven, more often than not, to say as little as possible, so therefore you’ve just defeated the objective of what could be one of the best preventative measures because of the litigious nature of those who feel they didn’t get a fair shot or heard it wrong,” he said. “The opportunity is there to structure it differently, something, anything, just to get human dialogue underway in a more fulsome manner would be a blow for freedom in that particular case. Because as it stands from the point the RFP is released, there is a proverbial cone of silence that seems to descend and you are left to your own devices to figure out what exactly is asked for on the other side of this, which lays the ground work for exactly these kinds of debates going forward.”

Elliott Branch, the deputy assistant secretary of the Navy for Acquisition and Procurement, said his service recognizes the barriers during the development of requirements.

“Some of it is our fault because in trying to preserve that system integrity we say we have to treat everyone equally so we have to talk to everybody. We don’t have a workforce that allows us to talk to everybody. We have to have this entire infrastructure to make sure this dialogue takes place in a procedurally proper manner, where my friends the lawyers come in, and their answer is don’t talk to anyone,” Branch said. “Industry often comes in, and as a friend of mine says, ‘It’s not that you’re not good Americans, you are better capitalists.’ Your job is to prepare the ground. You are coming in and instead of holding an honest dialogue about the requirement with us, you are holding a dialogue with us about your solution to the requirement, which may or may not help us. Unless you have a system set up that is designed to collaborate and communicate from the beginning of the time that we have a requirement and industry prepares to bid on that requirement throughout the process of source selection and contract formulation, until the end, we will continue to focus on the feedback mechanism.”

Branch said one of the ways the Navy is trying to fix this problem is by reducing the amount of time contracting officers spend filling out forms and checking the boxes to ensure they are following all the regulations perfectly.

“We are going back through the rules and regulations and asking if we are doing something based on custom and usage or because the rules say so,” he said after the event in an interview with Federal News Radio. “When we can strip out the extra things that contracting officers have to do today and get it down to the irreducible minimum, then that will allow them to have time to talk to vendors and do better market research — the more strategic parts of the job.”

It’s all about reducing the complexity of the job and free up time for better and more valuable dialogue.

Maybe the Navy’s effort could act as a pilot program for the rest of government. Even if 60 percent or 70 percent of the what the Navy is doing is similar to the rest of government, it would be a great start to opening up lines of communication between industry and government. Meanwhile, it might also free up resources for other big problems — most notably, the training of current acquisition workers and the hiring of new ones because neither is happening fast enough.

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