Government Contracts Monitor
GAO Bid Protests - FY18 Protest Statistics (Overall Effectiveness at 44%; Sustains at 14%), and a Look Ahead
December 2, 2018
The Government Accountability Office (GAO) last week issued its Annual Report to Congress on bid protests during Fiscal Year 2018 (FY18; 10/1/17-9/30/18). The total number of bid protests filed (including supplemental protests, cost claims & reconsideration requests) increased marginally by less than 1% (2,607 vs. 2,596 protests in FY17 – an increase of 11 protests). GAO closed 2,642 protests during the year (down 30 from the prior year), of which 622 involved merits (sustain or deny) decisions. Of these merits decisions, 92 protests, or 14%, were sustained – down from 17% in FY17, but still above GAO’s historical 10-12% sustain rate. More importantly, the overall “effectiveness rate” – i.e., cases in which the protestor received some form of relief, either as a result of agency corrective action or GAO sustaining the protest – was 44% (down slightly from the prior three years average 46%). Interestingly, hearings were held in only 5 cases (0.51% of all fully-developed cases), continuing a consistent downward trend from 42 cases (4.7%) in FY14.
GAO’s 44% protest “effectiveness rate,” while down slightly from the prior three years, nevertheless is impressive. This is particularly so when one considers and discounts the significant number of meritless protests filed each year that are either outside GAO’s jurisdiction, untimely or otherwise defective, and eliminates the 78 reconsideration requests that are pretty consistently denied. This high effectiveness rate explains, in part, the nominally low “sustain” percentage as to fully-developed cases – i.e., agencies voluntarily took corrective action early on in many cases in which they identified problems that might have led to sustains.
GAO identified the most prevalent grounds for sustaining protests in FY18 as (1) unreasonable technical evaluation, (2) unreasonable cost or price evaluation, and (3) flawed source selection decision. There are two things of interest here: (1) GAO identified only the top three grounds, rather than the top four or five that GAO usually has identified in recent years; and (2) last year’s #2 (unreasonable past performance evaluation) and #4 (inadequate documentation of the record) dropped off the list, with this year’s top three otherwise remaining in the same order as in FY17. Obviously, these grounds may vary from year-to-year, but these lists provide some insight as to the areas in which GAO is finding the most problems.
Further, it is interesting to note that this is the third straight year that “unreasonable technical evaluation” has been the #1 most prevalent ground for sustaining protests. This is somewhat surprising in view of the very high discretion generally accorded evaluators and source selection officials in making technical judgments, suggesting that evaluators may be having issues in properly explaining and documenting their choices. This result also runs contrary to conventional lore, in view of the foregoing high discretion accorded, that technical evaluation challenges are among the hardest protest grounds to win.
GAO states that, as in the prior two years, there were no instances during FY18 where an agency did not fully implement a GAO recommendation, and no instances in which GAO failed to issue a decision within 100 days of GAO’s receipt of a protest.
GAO’s Report conspicuously does not provide any explanation for the slight increase in overall protests filed. However, this increase is consistent with our anticipation for FY18 discussed here last year, including, among other things, the impact of Congress’s late 2016 restoration of GAO’s previous exclusive bid protest authority over civilian agency task order awards having a value of more than $10M, which had expired (sunset) at the end of FY16. Indeed, GAO says that 356 of the FY18 closed cases are attributable to GAO’s task or delivery order jurisdiction under indefinite-delivery/indefinite-quantity (IDIQ) contracts. This compares to only 256 such protests in FY17, when GAO’s jurisdiction over civilian agency task order awards lapsed for several months and Congress increased the DOD threshold to $25M, vs. a higher 375 task order protests in FY16.
One issue not addressed in GAO’s Report and the provided annual statistics is any chilling impact of GAO’s May 1, 2018 implementation of the new Electronic Protest Docketing System (EPDS) and GAO’s new $350 protest filing fee. While it is expected that the impact thereof was de minimis, it would be interesting to see some more detailed “before and after” protest filing stats, to see whether the new fee did cause any measurable drop-off in the number of protests filed, particularly with respect to low-value contracts or task orders.
Looking ahead, one can expect a modest further rise in total protests in FY19, although this may be somewhat restrained by the continuing pressures on agencies to improve the quality of their debriefings. One also can expect a continuing high protest “effectiveness rate,” in the same general range as FY18’s 44%. What will be interesting to watch is whether there is any increase in the number of hearings held, or whether such continue to go the way of the dinosaurs.
In short, GAO’s FY18 Bid Protests Report evidences that GAO continues to provide a valuable, cost-effective, forum in which contractors can obtain review of many procurement actions, on an expedited basis that minimizes procurement delays. GAO’s high “effectiveness rate” shows the important role that protests play in encouraging agency corrective action in appropriate cases, and evidences the value of well-based protests to both protestors and agencies, in ensuring a fair, competitive, procurement process.
Hopewell Darneille is responsible for the contents of this Article.
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