Bid protests keep on rising

Protesters filed more complaints with the Government Accountability Office about agency contracting decisions in fiscal 2009 than in the previous four years, continuing an upward trend that has been occurring since fiscal 2007, according to a new report.

The number of bid protests increased 20 percent, reaching 1,989 cases in fiscal 2009. GAO reported 337 more cases filed in 2009 than in 2008, according to the agency’s report to Congress.

GAO’s newly expanded authority accounted for half of the increase in protests in 2009. However, even without that new authority the number of cases would have increased 10 percent. Of 1,989 cases, GAO attributed 168 to the new authority to review task orders and Transportation Security Administration and Office of Management and Budget (OMB) Circular A-76 protests, which pits the private sector against the public sector for government work, according to the report.

GAO sustained 18 percent of the 315 bid protests it considered in fiscal 2009, according to the report, and also sustained 57 of 315 bid protests that officials decided had enough merit to review.

The percentage of sustained protests has been sliding downward since fiscal 2006, when GAO sustained 29 percent of cases, according to the report. GAO also reported that after its lawyers sustained a protest against an agency, 45 percent of those protests, or 26 cases, received some sort of relief from the agency.

The number of protests continues to increase, but the success rate of the cases continues to fall, according the figures.

GAO’s letter to Congress is required under the Competition in Contracting Act of 1994, if an agency doesn’t fully implement a decision that GAO hands down. GAO reported a case in which GAO and the Obama administration disagreed on whether agencies should give certain small businesses priority over others.

The Small Business Administration and OMB Director Peter Orszag contended GAO overreached its authority when it ruled that firms in Historically Underutilized Business Zones (HUBZones) should get priority over small businesses in the SBA’s Section 8(a) program for  small businesses owned by service-disabled veterans.

Orszag wrote in a July 10 memo that GAO’s rulings are not binding on federal agencies and are contrary to SBA regulations.

GAO's then-acting general counse, Daniel Gordon, who’s now the administrator of the Office of Federal Procurement Policy, wrote, “We do not think SBA’s regulatory implementation of HUBZone and 8(a) statutes is reasonable since it fails to give effect to mandatory language of the HUBZone statute.”