Are GAO Protests Increasingly Successful?

Published: November 14, 2018

Acquisition ReformContract AwardsGAOProtest

Well-constructed protests are a valuable tool in the federal procurement process. Recent rule changes allow for greater efficiency.

Protest Overview

The bid protest is a frequently used legal challenge to the awarding of a government contract or the terms of a solicitation.  While some protests are overseen by federal agencies or the US Court of Federal Claims, most are filed with the US Government Accountability Office (GAO).  The GAO provides contractors with an unbiased third-party to review the grounds for a protest and make a determination on whether the case has sufficient merit to be sustained. 

Protests may be filed against procurement actions by federal government agencies during the procurement process including the solicitation and the source selection process.  Only “interested parties” are allowed to file protests.  “Interested Party” is defined in the Competition in Contracting Act (CICA) as “an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of a contract or by failure to award the contract.”  Some examples of interested parties include the following:

  • You submitted a proposal within the competitive range and it was unreasonably evaluated by the government
  • The solicitation was unduly restrictive and you would have submitted a proposal except for the agency’s error
  • The agency made a mistake and you were excluded from further consideration

Not all persons or companies will meet the legal definition of an interested party.

GAO’s FY 2017 Report to Congress

The GAO submits an annual report to Congress with an overview of the protests submitted during the previous fiscal year.  In FY 2017, the GAO received 2,596 cases.  Of these, 2,433 were protests.  There were also 86 requests for reconsideration and 77 cost claims.  This was a 7% decline in submitted cases from FY 2016 – a noticeable reverse in the trend over a three year period which saw a consistent increase in the number of cases.  The GAO sustained 17% of the protests.  Their review identified the most prevalent reasons for sustaining protests:

  • Unreasonable technical evaluations
  • Unreasonable Past Performance evaluations
  • Unreasonable cost of price evaluations
  • Inadequate documentation of the record
  • Flawed selection decisions

GAO also noted a significant number of protests do not reach a decision based on merits because agencies choose to voluntarily take corrective action in response.  It’s worth noting the effectiveness rate reached an all-time high of 47%.  The rate of effectiveness looks at all of the filed cases and measures the percentage of cases in which the protestor receives relief, either from a sustained protest by GAO or from voluntarily corrective action.  While the total number of sustained Protests dropped in FY 2017, the total number of voluntary corrective actions increased.  The FY 2018 report to Congress is expected to be released in late Q1 FY19 or by Q2 FY19.

Protest Data submitted to Congress from GAO (FY 2013 – FY 2017)

The following chart illustrates the total number of filed protests from FY 2013 through FY 2017.  The total amount of cases filed with GAO rose steadily year over year beginning in FY 2013.  It reached its peak in FY 2016, with a total of 2,789 cases filed.

This chart illustrates resolutions and the number of closed protest cases from FY 2013 through FY 2017:

GovWin IQ Opportunity Reports in Protest Status

Over 100 active GovWin IQ Opportunity Reports are currently in protest status.  The following are the top ten based on overall value ($K): 

  Org.

  Program

   Value

   Solicitation

RFP Release Date

Status of Protest

HHS

Chief Information Officer Solutions and Partners On Ramp (CIO-SP3)

$20B

NIHJT2016015

03/14/2016

23 Protests Filed, 1 Not Decided

GSA

Alliant 2 Small Business (ALLIANT 2 SB)

$15B

QTA0016GBA0002

06/24/2016

25 Protests Filed

USAF

Small Business Enterprise Applications Solutions IDIQ (SBEAS)

$13.3B

FA877117R1000

09/28/2017

15 Protests Filed, 3 Not Decided

DoD

Jedi Cloud

$10B

HQ003418R0077

07/26/2018

5 Protests Filed and Not Decided

ARMY

US Army Marketing and Advertising Program

$4B

W9124D16R0046

01/03/2017

2 Protest Filed, 1 Not Decided

NAVY

Fielded Training Systems Support IV (FTSS IV)

$1.75B

N6134015R0052

06/03/2015

Lot 2 Pre-Award Protest Filed

ARMY

Multiple Launch Rocket System M270A1 Improved Armored Cab Kits (MLRS) (IAC)

$970.3M

W15QKN17R0214

08/31/2017

2 Protests Filed and Not Decided

USAF

BLU137B Penetrator Warhead Production

$896.5M

FA868117R0036

06/22/2017

5 Protests Filed, 1 Not Decided

DoD

Global Privately Owned Vehicle Contract IV (POV)

$875.3M

HTC71118RR001

03/06/2018

2 Protests filed, 1 Not Decided

HHS

Public Information and Communications II (PICS II)

$500M

NIHOD201800001

11/29/2017

1 Protest filed and Not Decided

Upcoming Opportunities to Watch

The following are a few upcoming Top Opportunities for FY 2019 in which protests played a role in the previous procurement process:

  • Enterprise Acquisition Gateway for Leading Edge Follow-on (FLASHY EAGLE)
    • Unrestricted: Opportunity ID # 169901
    • Small Business Set-Aside: Opportunity ID # 169902
    • This vehicle for the US Department of Homeland Security is the expected follow-on to EAGLE II.  It is also expected to incorporate elements, like agile methodology, of the cancelled Flexible Agile Support for the Homeland (FLASH) program.  The combined ceiling for the Unrestricted and Small Business tracks of EAGLE II was $22 billion over seven years.
    • EAGLE II saw 65 protests filed over a two-year period by several vendors.  GAO issued decisions on the merits in only seven cases.  The questions related to whether DHS fairly evaluated a company’s corporate experience.  All cases were denied.  One company, Business Integra, filed a protest with the US Court of Federal Claims.  This protest challenged DHS’s ruling that its bid was not compliant because they did not propose labor rates in all of the required categories.  The protest was also denied – with the court stating that DHS acted reasonably when it determined Business Integra’s proposal was ineligible for an award.
  • Pharmaceutical Prime Vendor II (PPV II) Opportunity ID # 173004
    • A recompete of the current PPV contract with McKesson Corporation, this Veterans Affairs requirement provides for the distribution of services for a wide range of pharmaceutical products directly to the VA and other participating government agencies.  Funding obligations on the current contract exceeded $31.6 billion.  A follow-on contract is expected to see a similar level of use.
    • In 2012, two small drug distributors – DMS Pharmaceutical Group, Inc. and PBA Health – filed protests regarding the VA’s decision not to have a portion of the contract set-aside for small businesses.  DMS’s proposal was rejected by the VA because they didn’t meet several of the requirements outlined in the solicitation.  However, the GAO found that this rejection was “reasonably determined.”  PBA filed a similar protest, although the VA requested that GAO dismiss it. 
  • Management and Operation of the Savannah River Site (SRS M&O) Opportunity ID # 36495
    • This requirement for the US Department of Energy provides for the necessary technical, operational and management functions for the Savannah River Site (SRS).  The incumbent contract with Savannah River Nuclear Solutions, LLC has a ceiling value of $12.1 billion.
    • In 2008 the award was protested by Savannah River Alliance, LLC, which alleged there were organizational conflicts of interest, as well as a key personnel conflict of interest, which tainted the evaluation process.  GAO denied the protests, noting that any conflict, if it exists, is personal to the employees and not the organization. 

Familiarity with these previous procurement protests offers the chance to learn about the kinds of challenges faced by vendors and the rationale for filing protests.  It also provides concrete examples of the decisions reached by GAO and the reasoning behind them.  The more a prospective vendor is familiar with a past procurement, potential competitors, and challenges faced, the better prepared they will be once a follow-on solicitation is released.

Recent Rule Changes to the GAO Bid Protest Process

Final Rule 83 FR 13817 took effect May 1, 2018.  This rule amended the bid protest regulations and implemented the Electronic Protest Docketing System (EPDS), as well as some administrative and clerical changes.

The EPDS is now the sole means for filing documents related to a protest.  There are two exceptions to this rule:

  • Documents which contain classified material
  • Documents that are not suitable for filing through EPDS due to the format or the size

Furthermore, a uniform fee of $350 is now required for filing a protest with GAO.  The fee is used to cover the necessary costs of establishing and operating EPDS and is not meant to discourage or reduce the number of protests that are filed.  The fee is considered reimbursable if GAO recommends a federal agency reimburse the costs associated with a protest.  There are no additional fees required for supplemental protests, reconsideration requests, or requests for recommendations regarding cost reimbursement.

Additional rule changes include the following:

  • Filing anything through EPDS “constitutes notice to all parties of that filing.”  This is significant because it eliminates the concern that a protest might not be filed early enough in the day for GAO to notify the appropriate federal agency by close of business that a protest was filed.  Additionally, the agency will receive “real-time” notification of the protest which will satisfy the requirements of the Competition in Contracting Act (CICA).
  • All subsequent filings must be made through EPDS.
  • A redacted public version of the protest must be filed through EPDS within one day of the original protest filing, but filers are only required to propose a redacted version of subsequent protected filings when another party requests a redacted version.  While redacted filings are potentially useful, they are not always worth the investment of attorney resources which are required to create them.
  • Clarification of timeline rules so if solicitation impropriety protest grounds become apparent after proposals are due and there is no opportunity to submit a revised proposal, such protest grounds must be filed within ten (10) days after the alleged impropriety is known, or should be known.
  • When seeking costs after corrective action, vendors need to file comments responding to any agency opposition to reimbursing costs within ten (10) days after receipt of the opposition.  If the protestor fails to do so, GAO will dismiss the request.

Conclusion

The GAO bid protest process is an essential component of the federal procurement system.  It provides contractors with a level of confidence that awards which are not in accord with acquisition regulations can be stopped, impartially reviewed and corrected if necessary.  Filing a protest can be very expensive and significantly extend the acquisition cycle. Vendors need to carefully consider the merits of protests before proceeding. However, when done properly, a well-constructed protest can be a valuable tool and have a strong impact on future procurements.

 

GovWin’s Federal research team has produced a series of reports studying the Top Federal Opportunities for FY 2019 including top unrestricted opportunities, top set-aside opportunities, top civilian opportunities, and top AEC opportunities.  Learn more and request your copy of each exclusive report HERE.