The Comptroller General (CG) and the U. S. Court of Federal Claims (COFC) are the dominant forums for bid protests. However, since March 1999, less than 400 formal decisions have been issued. There are quite a few that are dismissed. The COFC has issued 6 decisions for the protesters. Three of these have been decisions that turned around Comptroller General decisions. Counting the decisions for the government, there are only a few handfuls of COFC decisions.

I cannot remember the resolution of the District Courts issue but one of the reasons supporting them was that the COFC justices could not travel out of town to hear cases. Maybe they still ride in horse and carriage. Other organizations are using the electronic media. However, it appears that Federal Courts and U. S. Attorneys are just now discovering the internet.

How many forums for bid protests are needed and advisable?

Can their response time be improved using electronic media? Or are they doing a fine job right now?

By Joel Hoffman on Tuesday, November 07, 2000 - 09:48 am:

Bob, I've been involved in approximately 80 source selections. I have been protested three times, 1 GAO protest, 1 GSBCA protest and 1 Agency protest. In each case, the protests were groundless and eventually we prevailed. In the meantime, critical projects or service contracts were held up. On a couple of our other projects (someone else's source selection), despite prevailing in the decision, the US taxpayers were stuck with millions of dollars in delay costs, as a result of our inability to issue notices to proceed. Somebody needs to be looking out for the public, as a whole, in balance with the rights of individual firms. I can't justify in my own mind how the American taxpayer was served by us paying $8+ million dollars in delay costs on one contract (we prevailed in the protest) - not to mention that the delay cost money could have been used to fund one or more other critically needed Air Force construction projects.

I think there are enough forums - we don't need to make it easier to file frivolous protests. Thank God, the GSBCA no longer has a stranglehold on protests involving "FIP" resources. The protesters had their system practiced to a tee. Within minutes of notification of award to the competition, they had filed a protest - we were delayed over a year on one project. When the protestor didn't like the verdict, they went to court. The protestor's attorney admitted he made a living filing frivolous protests. He was very sad when the Brooks Act was repealed.

Yes, there are valid grounds for protest and yes, there are bad, pro-Government GAO decisions. However, we don't need to make it easier to stop a project, waiting for resolution of a protest.

That's my opinion. Happy Sails! Joel

By Vern Edwards on Tuesday, November 07, 2000 - 10:58 am:

Bob:

Protesters currently have four choices of forum: they can protest (1) to the agency, (2) to the GAO, (3) to the Court of Federal Claims, and (4) to the federal district courts.

Congress should act to keep protests out of the federal courts. The courts have better things to do.

By bob antonio on Tuesday, November 07, 2000 - 11:20 am:

In a protest, the probable outcome is defeat for the protester. However, if a protest is sustained, a protester has a shot at a procedural remedy or bid and protest costs. One procedural remedy may be to reopen discussions and apply the principles of the decision. I wonder how many such remedies resulted in a different awardee. On the other hand, the awarded cost of bidding and pursuing a protest soothes some of the successful protester's pain.

I believe Vern's opinion that Courts should be eliminated from the process has merit since they deal with few protest issues.

Here is a possible solution and I think at least some of it was mentioned here before. The awarding agency issues an initial decision. That decision may be appealed to the CG.

Now, who should have the authority to award bid and protest costs in a sustained protest?

Any other ideas?

By bob antonio on Tuesday, November 07, 2000 - 11:46 am:

I forgot to mention one thing. A study needs to be done to see if the procedural remedies result in different awardees to a signficant percent. If they do not, the protest laws need to be changed to prevent the protest forum from having an effect on the instant procurement. The protest forum should be limited to the award of bid and protest costs. With that limitation, our attorney friends would still have clients, a disappointed offeror could still make its point, and the protest forum could continue to provide guidance.

By Ramon Jackson on Tuesday, November 07, 2000 - 11:59 am:

Costs to the taxpayers in delays due to trivial protests are not trivial. I like Bob's idea about preventing a protest from having an impact on the instant procurement. I'd also approve of a penalty for a protest determined to be trivial.

What fixes in law might be desirable to better balance things between the firms' and public's interests?

By John Ford on Tuesday, November 07, 2000 - 03:33 pm:

Although Vern and Bob have advocated for keeping the courts out of the protest arena, there are mechanisms available there to deter frivolous protests/suits. One is the ability of the COFC to award attorney fees to a prevailing party in certain cases. This includes the government. Thus, if the government could recover attorney fees from a protestor this might deter some of them. The second mechanism is the imposition of costs against an attorney if the attorney does not make a good faith inquiry into the merits of an action (s)he brings. Charging attorneys the government's cost of defending frivolous protests could act as a deterrent. Finally, court rules also allow a party to recover some of its litigation costs if it offers to settle a matter, the offer is rejected and the other party ultimately recovers less than what was offered in settlement. The losing party in this situation gets to recover the costs it incurred after the settlement offer was rejected.

By C MERCY on Tuesday, November 07, 2000 - 03:49 pm:

Requiring protest to the agency first is the right way to start this reform. Secondly require protestors to post a bond along with their admin or judicial appeals, as in civil cases(which these are after all is said and done). If a protestor is sustained and there is a remedy other than B&P costs then it is so ordered. If not, than the forum in which the appeal is heard can order B&P expenses. No anticipatory profits however.Suggestatiopns that the matter be further studied are clearly correct. As an aside I remember losing almost 500K in delay expenses in which the protestor was never an interested bidder.

By joel hoffman on Tuesday, November 07, 2000 - 03:53 pm:

John, don't count on it. There seems to be an inbred tolerance by GAO and the Government agency's attorneys of misconduct by the protester's attorneys. In my last protest, we discovered that the unsuccessful offeror's (read: "protester") attorney illegally taped the KO's debriefing without her knowledge. This came out when the protester included a transcript of the debriefing in the protest file. Despite the KO's anger, nothing was done by GAO.

The next problem was an obvious violation by the attorney of the "protective order". A protective order is issued to keep the attorney from disclosing protected information submitted by the Government, such as specific information in the winning proposal, names of source selection officials, names of references contacted for past performance information, etc.

The protester's attorney filed an amended protest, asserting that a reference wasn't qualified, due to the nature of her specific job duties, as it relates to the incumbent (the "protester"). Not only was she well qualified, the attorney didn't contact anyone in the Government to determine what her duties and qualifications were - the very detailed info came from the protester!!!!!! I insisted that action to impose sanctions be taken, our attorney's reluctantly agreed, complained to GAO - and NOTHING came of it.

You may remember that the Contract Disputes Act also contains provisions in case of false, frivolous or pumped up claims, HA HA HA HA HA HA HA HA HA!
Happy Sails! Joel

By joel hoffman on Tuesday, November 07, 2000 - 03:59 pm:

In my opinion, adding a step to require an Agency protest, first, just adds another step, more delays, ties up more agency resources and can result in questionable decisions - depending upon the qualifications of the agency counsel assigned to resolve the protest.

In a GAO protest, our local attorney's can ask for assistance. In an agency protest, the folks they usually get advice from are the ones deciding the agency protest! Happy Sails! joel

By Vern Edwards on Tuesday, November 07, 2000 - 08:20 pm:

Bob, Joel, John, Ramon, CMERCY:

Guys--Are protests really that much of a problem? Notwithstanding the occasional horror story like Joel's, it seems to me that the GAO does a good job. It decides protests pretty quickly using relatively informal procedures, and it's leading the way with time-saving procedures like ADR and electronic filing. Some of its decisions are goofy, but not too many.

The number of protests filed with GAO has been declining precipitously. There were 1,220 protests filed with GAO in in FY 2000, down 13 percent from FY 1999, making for eleven straight year of decline! And that's 1,220 protests out of millions of contract actions if you include small purchases, and over 400,000 actions over $25,000. (See Federal Contracts Report, October 31, 2000.) It doesn't strike me that protests are a significant problem for the government at large, even if a protest does loom large in the mind of a CO who has to deal with it.

As I have said in another thread, requiring firms to protest to agencies first isn't going to cut it. The typical protester already distrusts the agency, that's why it filed the protest. Joel's right--unless the agency decides to see things the protester's way it's going to appeal any denial, so making protesters file with the agency first will do little more that increase the paperwork and the delay. Any agency that wants to settle a protest after it's been filed with GAO can do so easily.

Most "trivial" protests are simply reflections of the fact that many firms just do not understand the contracting rules and COs often do a lousy job of explaining them in plain English. Think about the debates that we have about the rules, and we get paid to understand them.

I say let well enough alone. Get the courts out of it (the district courts are going away soon, anyway) and let the GAO do what it's been doing since the 1920s.

By Vern Edwards on Tuesday, November 07, 2000 - 08:33 pm:

In case you haven't got ready access to FCR, here are the GAO FY 2000 protest statistics:

 

The peak year for GAO protests was 1989; it received more than 3,300 in that year.

By Ramon Jackson on Tuesday, November 07, 2000 - 09:13 pm:

Vern, the statistics you mention are interesting. What may be missing is the more difficult collection and analysis of drag effect. What is the cumulative annual cost of delay? It is a difficult problem, but probably significant.

One example (and I'll reserve comment on the government's "wisdom" in doing things this way) would be a technical development and delivery with interrelated efforts under separate contracts. How many large scale, complex efforts have seen fairly significant impacts beyond the particular effort hit by a protest? We probably don't even know and dollar estimates are probably not collected against a protest cost estimate. I've seen the horror stories of something like a domino effect, but they are stories, not data.

While I have little patience with agency ineptness that often opens the protest door, too many offerors see the protest as a low risk stop work order while they try for another bite. Some seem to treat protest as a bit of punishment for not choosing them or any other slight they think they suffered.

Standard risk assessment might show the penalty is moderate and occurance rate low so protest. I think perhaps the risk level should be raised so that it shows clearly on their screens as they consider such action. Let them do some of the same sweating the agency does on protest risk. The balance could be changed by either changing likleyhood of damage or severity of damage. A firm policy that a protest on weak grounds will result in payment of some of the government's costs would therefore avoid the more draconian punishments sometimes muttered in dark corners by government people faced with significant delay in projects.

By joel hoffman on Tuesday, November 07, 2000 - 09:53 pm:

Vern, I agree with you that GAO does a pretty good job. My pessimism was primarily in response to John's idea that something could be done to penalize frivolous protests.

I would like to see a higher standard established to invoke an automatic stop on the awarded contract, considering the low "sustained" rate. Too much waste when contract performance is held up. The winner often loses key personnel who may have been a factor in the selection. Pricing of key commodities are very time sensitive. Contractors can typically only lock in on price quotes for one to two months. Oh, well. Protect the rights of one firm at the expense of the majority and the taxpayers. Happy Sails!

By bob antonio on Wednesday, November 08, 2000 - 08:17 am:

Vern:

Here is the issue I wanted to discuss.

1. I was asking whether a CG or COFC recommendation for corrective action makes a bit of difference. For example, if a forum recommends that discussions are reopened, does it result in a change in the award. Probably not. However, this needs to be analyzed to determine if the suggested remedies produce results. If nothing changes after the recommended action is taken, we end up with more process without a result.

2. If the CG's and the COFC's remedies produce no results, should something change. If so, what change is necessary. If we keep the status quo, we must accept the fact that the result is to produce process and not results.

3. If we have these two organizations and the district courts making recommendations that delay the award process with no results, are all of these forums needed. If not, which one(s) should remain.

4. Here is one possible change based on a finding that recommended actions produce no results in procurements. First, we keep the current agency process. Maybe we have a contracting officer decision similar to a dispute. We need an appeal forum but only one. That forum may award bid and protest costs only and may not affect the award. There are no stays in the award process and there are no recommeded actions for the instant procurement.

By Vern Edwards on Wednesday, November 08, 2000 - 09:30 am:

Bob:

I do not know of any study of the effect of protest corrective actions. I have often wondered how many times a successful protester has gone on to win the contract. To the best of my knowledge, no one keeps track. There were 63 sustained protests in FY 2000. It may be possible to find out what happened by calling the protesting firms or their lawyers. It may also be possible to find out by checking FPDS or CBD award information. Maybe I'll do it if I have time.

My own belief is that successful protests (i.e., sustained protests) rarely change the outcome of source selections; I am personally aware of only one or two cases in which they have. I think that in most cases a sustained protest merely provides the protester with procedural relief: re-consideration of its proposal, inclusion in the competitive range, another round of discussions and revised proposals, etc.

One argument that has been made in favor of the protest system is that it keeps agencies honest, whether or not it changes outcomes for protesters. A couple of economists advanced that argument in a paper a few years ago. I have a copy of it somewhere and if I can find it I'll post the reference here at wifcon.

I might add that the delays resulting from protests are nothing compared to the delays occasioned by poor acquisition process execution by government agencies. I still see agencies taking two and three years and longer to plan and execute acquisitions for no other reason than simple incompetence. And talk about costs--my industry friends tell me that agency exchanges with industry [RFIs, DRFPs, presolicitation conferences, preproposal conferences, RFP amendments (before and after receipt of proposals), etc.] are costing them a fortune. I see agencies going through two or more rounds of draft RFPs. These things cost agencies money in two ways--first, the government ultimately pays a large part of industry B&P costs through indirect cost allocations; second, they raise administrative costs and delay contract award.

Although I have no data, I believe that the inability of many agencies to get their acquisitions off the ground in an efficient and effective manner is a much bigger problem than the cost of the protest system.

By bob antonio on Wednesday, November 08, 2000 - 09:56 am:

Vern:

You mention 63 sustained decisions by the CG. Check this page of the site

http://www.wifcon.com/protestsGAOcount.htm

When I was keeping score on the "Protests" page, I found that there was a significant difference between the CG's numbers and this site's numbers. So I contacted GAO's bid protest unit several times to try to figure out the discrepancy.

Those 63 decisions may include more than one decision on a procurement. For example, if separate protests are filed for being excluded from the competitive range and for not receiving meaningful discussions, that is 2 protest decisions at GAO. Wifcon.com only considers a printed decision. So the 63 is actually probably 50 written decisions on procurements in which one or more decisions were rendered.

I agree with you and think that things can always be improved. In my line of work, the status quo is always suspect. It doesn't matter if it is a tweak or a major issue. We need constant review and improvement. It is the only way we progress.

By Ramon Jackson on Wednesday, November 08, 2000 - 10:14 am:

Vern, I agree -- with a vengence you might say. I reserved comment about agency wisdom allowing multiple contract dependencies to continue. Sometimes it is difficult to avoid and part of that might be blamed on budget process, but mostly it is lack of desire or ability to plan, integrate and execute effectively.

The hidden cost of the blundering run up to the obvious acquisition actions we most often talk about is probably huge. It is not necessary to swirl to such extent, but it apparently is almost the rule rather than exception. If every agency were required to account for every hour and ODC in those swirling run-ups to take off I suspect there would be general shock.

I believe Bob has put his finger on the real problem. What is the purpose of the protest process if nothing changes? Using it, as your economists thought to keep agencies honest is certainly a blunt and rather useless tool where more precision is needed.

Let's take the case of a really sloppy acquisition. Punishing taxpayers, end users, and other firms doesn't keep the government honest. At best it is point focus on what is probably a systemic problem. I once knew of a high level individual, apparently largely responsible for an earlier protest, loudly stating he didn't want to live through another while doing things that could bring that about despite warnings. Due investigation and removal or other penalties for those responsible for the mess might have long term effect. At least the worst offenders won't be around for deja vu all over again (wasn't that a Yogi saying?) -- and again.

Possibly Bob's #4 with addition of authority by the appeal forum to take direct action on those who made the government less than "honest" would be useful. The only legitimate reason for overturning a selection in my view is when the selection process has damaged the taxpayers, not one of the firms.

By John Huckle on Wednesday, November 08, 2000 - 12:05 pm:

Maybe this should be the start of a separate thread, but Vern makes a statement that his industry friends say agency exchanges with industry during the solicitation process [RFIs, DRFPs, presolicitation conferences, preproposal conferences, RFP amendments] are costing them a fortune. I don't doubt it. Anyone know of any studies on this point?

By Vern Edwards on Wednesday, November 08, 2000 - 12:50 pm:

John:

Let me elaborate about what I hear from industry.

What they say they want in a solicitation is good information about the requirement, the agency's terms and conditions, and the evaluation factors and procedures. They say that in order to respond to a DRFP they have to charge their time to B&P, and that B&P funding is a scare commodity. They want agency personnel to keep in mind that reviewing and commenting on solicitations is not free. It costs time and that time has to be charged to the B&P account.

They complain that many draft RFPs are issued prematurely, before an agency has thrashed out its requirements and problems internally, and that the final RFP is often drastically different from the draft, not because of industry comments but because of changes in agency strategy that were driven by other considerations. They feel that their efforts in such cases are wasted, but that they cannot afford not to at least review a DRFP.

They say the same about presolicitation conferences, that they are often conducted prematurely, with the result that the agency's final strategy and solicitation are significantly different from what was described at the conferences.

When I was doing research for the book about award term contracting that I wrote for NCMA I noticed an interesting phenomenon--procurements in which agencies issued five or six CBD announcements about an acquisition over the course of many months. In these cases the agencies were going to industry while the acquisition was still evolving internally. On the one hand, agencies are told to involve industry early, but on the other they are not told that such involvement can be costly to industry.

By John Ford on Monday, November 13, 2000 - 11:12 am:

Joel, going back to your post of 7 Nov, you should notice that I mentioned vehicles that are available to the courts. Your response focused on fora which may or may not have the authority to impose the sanctions requested. There is no doubt the courts have the power to impose the sanctions I described, and do impose them. As regards, the CDA misrepresentation provision, if you check the COFC decisions, you will find that that provision is frequently used in proceedings before the court. It is one of what I call the Three Amigos of suspected fraud. If fraud concerning a contractor's claim is suspected and can be substantiated with proof, the government will file at least three counterclaims based on fraud. These counterclaims are based on the False Claims Act, the CDA, and the Forfeiture Statute. The courts have jurisdiction to determine fraud while the GAO and the BCAs do not.

By joel hoffman on Monday, November 13, 2000 - 02:07 pm:

John, I originally responded to your November 07, 2000 - 03:33 pm post, regarding sanctions for "frivolous protests/suits." I said I doubted there would be the will to take such actions. In today's post, you responded, describing actions taken by courts against those committing fraud or false claims.

There are huge differences between "fraud", "false claims" and "false statements", which are criminal acts and the "frivolous protests/suits", which are stupid acts or simply poor judgement.

Are you aware of any protests involving alleged "fraud"? I suspect there are very few instances of "fraud", "false claims" or "false statements" in protests. From my readings, I recall these issues usually involve matters of differences in opinion or judgement regarding factual material, rather than arguments about facts.

I understand that the US Attorney's office must prosecute all cases of fraud, false statements or false claims (criminal acts) before the courts. This is something they are very reluctant to do, unless it is a high profile (politically advantageous)case or involves a great sum of money AND if they have an air-tight case. High standards of proof, based on facts, are necessary to prove fraud. My opinion is based on my experience.

As I said, I believe there are very few cases, if any, of suspected fraud in COFC protest suits and likewise, in BCA cases. That leaves "frivolous" issues (weak, groundless, misinformed, misinterpreted issues?).

If a US Attorney is reluctant to prosecute criminal acts, do you really believe they or the forums be interested in pursuing sanctions for non-criminal, "frivolous" protests/suits, if they were given the authority?

Certainly a BCA must have some authority over broken rules, such as violations of their own protective orders, don't they (see the example in my 7 November post where the BCA dropped such a matter) ? Happy Sails! Joel

By John Ford on Wednesday, November 15, 2000 - 05:46 pm:

Joel, my comments about fraud only responded to your comment concerning the misrepresentation provision of the CDA. As regards frivolous protests or claims, the powers granted courts by the Federal Rules of Civil Procedure and the Rules of the United States Court of Federal Claims are unique to the courts. What I suggested originally was that the GAO and the BCAs be given similar powers. As it now stands, they do not have the ability to impose meaningful sanctions on either party. The point I was trying to make is if these fora have explicit powers to levy sanctions short of a dismissal, it would cause contractors to think twice before submitting a fivolous protest/claim.