As required by the Competition in Contracting Act, the Comptroller General recently issued the FY 2014 annual report regarding bid protests at the Government Accountability Office ("GAO").1 The report included statistics regarding bid protests, an account of any agency failures to fully implement recommendations2 and, for the first time this year, “a summary of the most prevalent grounds for sustaining protests.” The GAO also included a section on the effect of the government shutdown in October 2013 on the resolution of bid protests.
According to the report, the number of bid protests filed in FY 2014 rose 5% from FY 2013, with 2,561 cases being filed.3 In FY 2014, 2,458 cases were closed, and of those closed cases, just 292 were related to the GAO’s limited bid protest jurisdiction over certain task or delivery orders placed under ID/IQ contracts.
The GAO’s sustain rate dropped from 17% in FY 2013 to just 13% in FY 2014.4 Nonetheless, the overall “effectiveness rate” remained consistent at 42-43% between FY 2010 and FY 2014. The effectiveness rate is calculated “[b]ased on a protester obtaining some form of relief from the agency, as reported to GAO, either as a result of voluntary agency corrective action or our Office sustaining the protest. This figure is a percentage of all protests closed this fiscal year.”
The number of cases for which alternative dispute resolution (“ADR”) was used dropped from 145 in FY 2013 to just 96 in FY 2014. Although ADR cases were down significantly, the ADR “success rate,” which was 83% in FY 2014, remained within the range of the past five years (80-86%).
The most prevalent grounds for sustaining a bid protest were listed as “(1) failure to follow the evaluation criteria; (2) flawed selection decision; (3) unreasonable technical evaluation; and (4) unequal treatment.” Four specific cases were cited as representing each of those four grounds.5
These numbers seem to confirm the commonly held perception that when federal spending decreases, competition for awards, including the filing of protests, increases. Contractors receiving high-dollar, long-term awards should expect them to be protested and should account for protest delays in their revenue projections. Contractors considering whether or not to protest should keep in mind that, although the sustain rate is down from past years, that rate does not reflect agency determinations to take corrective action. And, the overall effectiveness rate has remained relatively consistent in recent years. However, contractors should recognize that agencies often take corrective action to correct problems with the current protest record. The “corrective action” can be a thinly veiled “do-over” to allow an agency to better support its initial decision so that when the earlier award is reaffirmed, the protester’s likelihood of success will be significantly diminished.
1Available at http://www.gao.gov/legal/bids/bidproan.htm.
2It is rare that agencies fail to implement recommendations triggering this reporting requirement. In FY 2014, the GAO noted one such instance but does not describe why the agency, specifically the Air Force, failed to implement the recommendation or what action the Air Force took instead.
3Cases also include cost claims (of which there were 50) and requests for reconsideration (of which there were 66). In FY 2010, there were 2,299 cases filed — a 16% increase from the previous year — and between FY 2010 and FY 2014 there was only one year with a decrease in the number of cases filed (between FY 2012 and FY 2013). In FY 2014, there were 262 more cases filed than in FY 2010.
4The sustain rate was 19% in FY 2010.
5The GAO noted that that this list did not include the numerous instances that would cause an agency to take voluntary corrective action prior to the GAO reaching any decision on the merits.