Bid protests continue slow, steady rise

The Government Accountability Office released their annual bid protest report, and for the fourth year in the last five, we saw an increase in the number of cases filed.

Fiscal 2015 had 2,639 cases, compared to 2,561 in 2014, for a 3 percent increase. The only year in the last five to have a decrease from the previous year was 2013, when the number cases fell 2 percent to 2,429.

In fiscal 2011, the number of cases filed stood at 2,353 cases.

It is worth nothing that GAO counts cases filed, not individual procurements. For example, if company A files a protest, that counts once. If it files a supplemental protest for the same procurement, that gets counted again. Each filing is counted as a separate case.

GAO also closed 2,647 cases during fiscal 2015. The number of closed cases differs from the number filed for the year because it includes cases that were filed during 2014, but not decided or dismissed during 2014.

Of the cases closed, GAO reached a decision on the merits on 587 cases, but only 68 of those cases were decided in favor of the protester.

But GAO also determined that in 45 percent of the cases, the protester received some sort of relief. GAO defines this either as a sustained protest (the 68) or a voluntary corrective action by the agency.

“A significant number of protests filed with our Office do not reach a decision on the merits because agencies voluntarily take corrective action in response to the protest rather than defend the protest on the merits,” GAO General Counsel Susan Poling wrote in her letter to Congress.

Agencies are not required to report what kind of corrective action they have taken.

Of the cases that GAO sustained during fiscal 2015, the agency found that the most prevalent reasons were:

• Unreasonable cost or price evaluation
• Unreasonable past performance evaluation
• Failure to follow the evaluation criteria
• Inadequate documentation
• Unreasonable technical evaluation

The report to Congress is primarily that – a report on the numbers. GAO isn’t making any judgments on the merits of the protests.

GAO reported that only one agency declined to follow its recommendation, and that was the State Department, and it involved a construction contract.

GAO doesn’t have enforcement authority, but it is required to report when an agency doesn’t follow its recommendations.

The rise in the number of bid protests doesn’t surprise me, but it is worth nothing that the rise is a steady increase, not a spike, which might indicate a longer term trend.

The critical state is the 45 percent of protesters who received some form of relief. As long as that number stays high, companies will see that bid protests are worth the trouble.