Bring accountability to contract protests

Government and industry need to take a new approach to procurement before bid protests spiral out of control, writes Jaime Gracia.

Jaime Gracia is president and CEO of Seville Government Consulting, a federal acquisition and program management consulting firm.

An article in the November/December 2010 issue of Defense Acquisition University’s Defense AT&L magazine discussed why companies file protests against contract awards and illustrated the realities of the federal contracting environment. Budgets are tightening, competition for those shrinking dollars is ferocious, and protests have seemingly become standard operating procedure. Further exacerbating the issue are poorly trained acquisition workers and poor government communications. So what are we to do in this environment?

The issue hinges on the seemingly endless cycle of protests with no consequences or accountability on the part of government or industry. More protests mean an even higher rate of program disruption, with the result that users and warfighters will continue not getting the products and services they need to perform their missions. Industry often looks at protests in terms of return on investment and might find it worthwhile to fight a contract award that a competitor wins. Given the risk-averse nature of government, that approach can open additional revenue sources or further opportunities for a company to compete.

Nonetheless, the government does make mistakes and should be accountable because the point of a protest is to prevent the government from causing harm to the protesting firm.

There needs to be a measure of accountability on both sides. A protest should not be taken lightly. It is typically a disruptive and costly matter. Although a company expects to win and files its protest accordingly, the number of protests that are upheld remains less than 25 percent. Some firms file just to see what will happen. What if a firm loses repeatedly? We need a measure of financial accountability to recoup the costs borne by the government from repeat offenders. By holding companies accountable for fishing expeditions, agencies could ensure that the protest process is used for its intended purpose: ensuring fair competition.

The government also has gotten into the habit of not wanting to upset firms that have a history of protesting awards. Indeed, some procurement officials automatically award contracts to such companies to avoid the cost of resolving disputes if the company were to protest and the government were to lose. Procurement officials must be held accountable for that behavior. And firms should be reimbursed for protests that are upheld to help put the pressure on the government to award contracts fairly.

Protesting is a right that industry must continue to have. But it must be weighed against the real costs when accountability is finally added into the equation. Furthermore, the government must stop allowing itself to be bullied into awarding contracts to firms with a history of protests. And more importantly, the government must be held accountable for following procedures and executing sound acquisition strategies to ensure that protests don’t happen in the first place.

We can accomplish all that if reform actions match the rhetoric coming out of the 112th Congress. However, without some much-needed accountability, we can expect to see a continued rise in protests, to the detriment of all involved.