Bid protests keep pace with DOD spending

The number of protests against the Defense Department's contract awards has grown at the same rate as the department’s spending has increased over the past several years, according to a recent report.

The Government Accountability Office has handled as few as 458 bid protests filed by companies against DOD’s contract awards in fiscal 2004 and as many as 540 protests in 2007, GAO reported April 14. In 2008, the protests increased to 611, a 23.9 percent jump compared with 2007, the largest margin in past four years, GAO said, adding that the greatest increase had been 17.9 percent in 2005.

GAO also said 2008’s increase comes from its expanded protest jurisdiction. The fiscal 2008 National Defense Authorization Act granted federal employees involved in a public-private competition for government work to protest a decision to outsource the work to the contractor.

Excluding protests in the expanded jurisdiction, GAO said the protest number rose to 581, or 17.8 percent, over 2007.

GAO put the increase in context of DOD’s spending. Despite the 17.8 percent jump, DOD spent 15.7 percent more money in 2008, compared with the previous year’s spending. “These similar rates of increase may suggest that the increase in protests was due in part to DOD’s increase in procurement spending,” GAO said.

GAO also said during the last two decades, the number of bid protests against both DOD's and civilian agencies' award decisions has declined. In 1989, companies filed 1,490 protests against DOD's award and 750 against civilian agencies’ decisions. In 2008, there were 611 protests against DOD's decisions and 416 against civilian agencies' decisions. The total number of protests against defense and civilian awards peaked in 1993 with 2,336 and has continued downward since, according to GAO’s figures.

Congress required GAO in the fiscal 2009 National Defense Authorization Act to assess bid protest trends; some members of Congress are concerned about frivolous protests. The House Armed Services Committee wrote that bidders seem to automatically file a bid protest if they lose a competition for a contract.

When a company files a protest, the matter goes before GAO. A group of 30 attorneys in GAO’s Office of General Counsel, who serve as hearing officers, address a company’s allegations that an agency acted contrary to procurement law or its contract solicitation.