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By Nick Wakeman

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Nick Wakeman

Bid protesters face uphill climb for success

It’s a given that bid protests have become a fixture on the landscape, and companies are building extra time into their contract pipelines to account for the added delays that protests bring.

But it is important to note that protests are no walk in the park and are not a guarantee of success for the protester.

In fact, if a protest goes through the entire adjudication process at the Government Accountability Office, you’re more likely to lose. In fiscal 2014, GAO only sustained 72 of the 556 cases that went through the full process. That’s a 13 percent sustainment rate. Not good odds.

On the other side of the coin, however, is that GAO closed just under 2,000 cases that never went through the full adjudication process. These cases were mostly dismissed when the agency took some sort of corrective action.

It is winning a corrective action that offers protesters their best hope for a positive outcome. Corrective actions take place when an agency decides to pull back an award. They can add the protester to the contract, as we’ve seen with several large IDIQ contracts. They also take corrective actions to re-evaluate the bids. This can mean, for example, restarting the competition the beginning or simply taking a second look and asking for clarifications.

But again, there is no guarantee that the protester will come out on top. The agency is just as likely or more to give the contract to the original bidders.

How hard it is for companies to win once their protest goes through the full adjudication process is well illustrated in a recent GAO decision denying the protests of two HUBZone small businesses who lost a $107 million contract to support the State Department’s fight against illicit drugs.

Computer World Services Corp. of Washington, D.C., and CompQSoft of Houston both protested the awarding of the contract to TSymmetry Inc. of Washington, D.C. All three companies are HUBZone firms, which was a requirement to bid on the contract.

The State Department was looking for IT services to support the Bureau of International Narcotics and Law Enforcement.

Computer World Services protested the State Department’s technical and past performance evaluations and alleged that the agency conducted misleading discussions. CompQSoft challenged the agency’s price evaluation and best value determination.

I won’t go into the nitty-gritty details. You can read them here But what is instructive and should likely be a warning to companies looking to protest is GAO’s reasoning in denying the protests.

First, you need to remember that this was a best value award, and the State Department listed price as the fifth and last of the five factors that it would consider in making the award. Tops was technical, then management, followed by key personnel. Fourth was past performance.

Being best value is a critical aspect of this decision. It allowed the State Department to pick TSymmetry, even though the company’s $107.2 million bid was nearly $14 million higher than Computer World Services and $21 million higher than CompQSoft.

But TSymmetry was graded “Superior” for its technical, management and key personnel factors. The other two were graded “acceptable.”

Part of the argument from the losing bidders was that the State Department improperly evaluated those key factors, so ultimately they made the wrong decision.

But GAO, however, made it clear that agencies have wide discretion in their conclusions as long as they follow the procedures and processes described in the solicitation.

“An agency’s evaluation of past performance is a matter of discretion which we will not disturb unless the agency’s assessments are unreasonable or inconsistent with the solicitation criteria,” GAO wrote.

The watchdog agency also commented: “A protester’s disagreement with the agency’s evaluation judgments concerning the merits of past performance does not establish that the evaluation was unreasonable.”

Similarly, with the agency’s price-realism, best value tradeoffs and technical evaluations. The protestors could not document what the State Department did wrong or where it strayed from the terms of the solicitation.

GAO sets a high bar for protestors, and they give a lot of latitude to agencies. In reading this and other protest decisions, it is important to realize that GAO sees the agencies as the best judge of what is the right decision for the agency.

Where GAO weighs in on the protestors favor is when the agencies fall short in following the solicitation. Of course, there are exceptions to this, but those are rare.

But it is clear that GAO is not there to re-evaluate proposals.

So, why protest when there is such an uphill climb? There are several.

An incumbent who loses a recompete and protests buys time to stay on the contract. Challengers can get more information and insights on their proposals, particularly in this era of where debriefs are too often deemed uninformative.

For protests involving large IDIQs, a protest often leads to a corrective action and a spot on the contract.

One thing is clear from covering the growth of bid protests over the last several years is that there is little downside to protesting. The only disincentive is paying the lawyer fees, and that doesn’t seem to be much of a disincentive.

Gone is the concern with angering your customer, and so even if the acquisition system improves, I don’t think we’ll see a significant slowdown in bid protests until we start seeing some angry customers.

Otherwise, the high volume of bid protests is likely here to stay.

Posted by Nick Wakeman on Jun 29, 2015 at 11:56 AM


Reader Comments

Tue, Jun 30, 2015 Fairfax, VA

The majority of protests are funded by incumbents who get contract extensions during the protest. Thus protesting can be a big win for them.

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