Could penalties for frivolous protests protect agencies?

Companies that file protest after protest only to have them tossed out should pay for their abuse of the system, recommended a procurement expert in a new report released June 11.

Steven Maser, professor of public policy and public management at Willamette University, said Congress could authorize the Government Accountability Office to require companies that repeatedly file baseless protests to compensate the agency for the costs that go along with protesting an award. The company would have to pay after specific number of meritless protests, such as three in three years, he wrote in his report, which was released by the IBM Center for the Business of Government.

When a company protests a contract award, it can cost an agency time and money as the work is postponed. Successful protests can lead to the need for an entirely new procurement, while unsuccessful ones simply add to the time and cost.

If Congress won’t agree to the penalty system, Maser suggested that GAO begin tracking meritless protests. Agencies then could use the information as part of past performance information before they make an award.

“This merely makes transparent and systematic something contractors already believe transpires in obscurity and episodically,” he wrote.

The report looks closely at bid protests, which have increased 18 percent since fiscal 2009. Across the government, contractors filed 2,353 protests with GAO during the fiscal 2011, when federal spending on contracts peaked. He said those figures suggest that protests will become more common as the federal budget declines. More specifically, he analyzed bid protests submitted to GAO that involved the Defense Department and its agencies between 2001 and 2009.

In his report, Maser offered more suggestions to agencies on preparing to avoid protests and dealing with those that come along.

• Appoint someone to a role that is akin to a company's chief risk officer in each source selection.
• Share the same detailed information—the level of details where specifics about the winner must be redacted—when debriefing losing bidders.
• Record debriefings “to mitigate the fear that company attorneys will mine disclosures for opportunities to protest.”
• Alleviate perceptions of bias with justifiable and documented procedures.
• Make requirements and evaluation criteria clear and simple. “If contracting officials do not understand the requirements, they can set up a protestable situation without realizing it,” he wrote.
• Develop simulations of source selections for training and experience.
• Make it worthwhile for an employee to work on a source selections board.
• Taking advantage of a contracting officer’s expertise in supply chain management early in the procurement process.
• Measure performance of a source selection board by considering whether it was on schedule, on budget and had no protests.