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By Nick Wakeman

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Nick Wakeman

What's behind the increasing number of bid protests?

I don’t want this to be a rant, but can someone explain to me what’s going on with bid protests?

I’m not trying to bash any individual companies. I respect Unisys Corp. and General Dynamics. I think they do good work and have good people working for them.

I’m sure, too, that they used sound business principles when they decided to protest the Transportation Security Administration’s award of its infrastructure contract to Computer Sciences Corp.

But my question is, what has changed in the market that makes protesting a lost bid more attractive? What makes a filing protest a good business decision?

Even in a down economy, spending continues to grow, though at a slower pace. But you would think there are opportunities to win new business to offset any losses. So I don’t think fear of lost business is the main motivator.

The change has happened over the last two years, according to Government Accountability Office data. In fiscal 2008, GAO received 1,652 bid protests, up 17 percent from the 1,411 the year before. Part of that increase was from GAO’s increased jurisdiction, but even if you took those cases out, the increase is still 10.9 percent.

In 2007, protests were up 6 percent. But in 2006 and 2005, protests were down 2 percent and 9 percent, respectively.

So what happened? Did contractors suddenly become sore losers? Or is there something else at work when executives make the decision to protest?

We’ve seen some cases where the protester gets added to the prime’s team as way of resolving the dispute. That’s what Lockheed Martin and IBM did with the huge FBI fingerprint contract last year.

So I guess a protest could be a ploy to grab a share of the prize because the winner is often motivated by the desire to get work and start the revenue stream.

But I don’t get the sense that a lot of protests are resolved that way. If I’m wrong, let me know.

Consultant Bob Guerra wrote a column earlier this year about a company offering a seminar on bid protests as part of a company's strategy. Apparently, according to the seminar, there are different types of losses, and there are some kinds of losses a company should always protest. Huh?

So I go back to my original question. What gives? To misquote Shakespeare, Why doth thou protest so much?

Posted by Nick Wakeman on Oct 23, 2009 at 7:23 PM


Reader Comments

Mon, Dec 21, 2009 Small Business Subcontractor

On the upside, protest potential can drive accountability and fair contracting practices. However, it's a double edged sword. I also tend to think agencies don't want to endure the headaches, hassles and scrutiny of going through a protest and as such, are held more hostage by protest potential.

Thu, Nov 12, 2009 Dr. Stanton Sloane Fairfax, VA

Nick, You started a dialog that I am keenly interested in, and have been actively participating in for some time. Notably that while the rules governing protests are reasonably clear, I believe the current bid protest process has limitations and inefficiencies. It is expensive; it results in delays, fielding needed capability in the federal government; and limits discretion of government acquisition executives. You already noted the uptick in protests over the past two years. There is not a simple solution to these problems, but I do offer up some suggestions for federal government procurement process improvement: * Make the procurement system more agile and flexible. It makes no sense to buy IT capabilities in the same fashion that we buy nuclear submarines. * Give government acquisition executives more discretion in reaching conclusions. Protesters should not be able to force the game to restart if they don't like the umpire's call in the 8th inning. * Levy consequences for protests that are without merit, or where the protesting company has a track record for filing protests that exceed some norm. * Increase the number of contracting officers, with a commitment to train and retain that talent. * Establish a Public Service Academy to train our future government leaders and workers. Successful precedents already exist with the Military Service Academies. Why do we feel that we can invest in four armed forces service academies to develop leadership for an employment base of about 1.4 million, but we do not have a comparable investment for the nation's largest employer with a 1.8 million-member-plus federal civilian workforce? We need to provide the necessary training and development for our future civil government leaders, and then institutionalize a meritocratic employment model. * Broaden the "federal pay for performance" system and hold acquisition executives accountable for the quality of their decision making. Thanks for the chance to air my views. Best Regards, Dr. Stanton Sloane, SRA International CEO & President

Wed, Oct 28, 2009

Often bidding on contracts is like buying a house from a newspaper ad...sound good until you get there and see what you're really getting. A few, sometimes uninformed or uninterested, people end up writing the proposal and when it is awarded, it is done so to a vendor that really doesn't know it is getting into. So many interested parties come out of the wood work once a contract has been awarded that now have a very real interest in the project and its outcoming and can greatly influence how the contracting folks perceive the success or failure of the project.

Tue, Oct 27, 2009

I've been in government, but for the last 15 years a contractor to the government. Whatever may be motivating companies now, I have seen protests for two reasons only: 1) The business is imperiled as a going concern if they lose the contract - it's a last ditch effort to remain viable or simply stay in business. 2) With larger companies, protests I have observed have been accompanied by genuine shock on the part of the losing company - the rank and file genuinely believe the process was unfair or that the work was "wired". Certainly, when I was in government I saw work awarded to "favorite" contractors through a proposal assessment process that was rather murky, so it's unfair to suggest that greed is the only motivating factor.

Tue, Oct 27, 2009

There are always consequences for protesting, although they are often neither directly observable nor clearly related to a protest. That said, as a bid preparation professional, I have observed over the past ten years a significant decline in solicitation quality, with the concommitant rise in protestable mistakes propagated by the solicitation issuer. I suspect, but cannot prove, that the root cause is the "brain drain" as senior baby boomers retire out of service, and often join the bidder community. They know what to look for in protestable situations, and thus can identify areas where the solicitation issuer has made critical mistakes. So, less solicitation quality and more knowledgeable bidders equals more protestable situations. As to why the bidders choose to ignore the potential downstream consequences of protesting, that ia a case by case situation.

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