Bid protests have nearly doubled since 2008 but don't blame contractors. Poor debriefings are the most likely cause, according to a new Rand Corp. study.
There are many findings in the Rand Corp.’s bid protest study but two things are clear: The bid protest process is not necessarily broken but contract debriefings certainly are.
The study was a requirement of the 2016 National Defense Authorization Act and Rand looked at a variety of factors involving Defense Department protests since 2008. The nonprofit looked at protests both at the Government Accountability Office and at the Court of Federal Claims.
But one of things I found most interesting was how the views of government diverged from industry.
When Rand talked to government officials, they heard complaints that there were too many protests and that incumbents who lost often were protesting to get more time on the contract before giving it up to the winner.
Rand also talked to industry and that included companies, lawyers and trade associations. Industry's response was that bid protests were a “healthy component of a transparent acquisition process.” The feeling was that government needed to be held accountable and provide information on how contracts awards were made.
This tracks with the findings of our 2016 Insider Report on the debriefings and bid protests where more than half of the respondents said they had filed bid protests because they wanted to learn more about why they lost the contract.
Rand backed up the industry perspective in their report with several data points.
First, there is the low percentage of contracts that are protested. Rand found that less than 0.3 percent of Defense Department procurements were protested.
The second and more meaningful finding is that while bid protests have doubled since 2008, the effectiveness rate of the protests (measured as the number of procurements that resulted in some change to the initial procurement decision) was found to be stable.
The effectiveness rate held at about 40 percent and actually increased slightly as the number of protests increased.
In fact, Rand called the stability “striking.”
“The stability (or slight increase) in the effectiveness rate while the number of protests is increasing refutes the claim that meritless (some use the term frivolous) protests account for those increases,” Rand wrote.
Rand cautions against wholesale changes to the bid protest process but does make some recommendations for modest improvement.
Their first recommendation is to enhance the quality of post-award debriefings. Congress took some action here in the 2018 NDAA and actually seems to anticipated Rand’s recommendation that DOD adopt an extended debriefing process. The 2018 NDAA requires more sharing of source selection documents and allows losing bidders to ask questions.
Rand also warned against restricting protests of task orders. Rand found that task order contracts are actually sustained at a higher rate than contracts. “This results suggests that task order protests fill an important role in improving the fairness of DOD procurements,” Rand wrote.
A significant number of protests at 8 percent also involve contracts worth less than $100,000. A streamlined process such as alternative dispute resolution for these protests may save resources while still ensuring fairness.
Since Congress just acted on bid protest issues with the 2018 NDAA, I’m not sure how much impact this Rand study will have in the next year or so. But it does put an important marker down on what is going on with bid protests.
But the study also mentions a significant challenge to improving the process. In addition to finding how different the government and industry view the effectiveness of protests, Rand also found that there is a lot of distrust between the two sides.
While it is not entirely surprising, the finding exposes another reason why it is so hard to improve the procurement process.