Bid Protests Decrease for Third Straight Year

The number of bid protests filed by industry in fiscal 2021 was the fewest since fiscal 2008, according to the Government Accountability Office.

GAO, which adjudicates protests, handled 1,897 protests in fiscal 2021, down 12% from the 2,149 protests filed in fiscal 2020, according to the agency’s annual bid protest report submitted to Congress on Nov. 16.

Fiscal 2021’s protest tally is the lowest from industry since fiscal 2008 (1,652 protests filed) and marks the third straight year of declining bid protests following nearly 2,800 protests filed in fiscal 2016—the high watermark over the last decade.

Ralph White, managing associate general counsel for procurement law at GAO, told Nextgov one reason for the recent decline in protests could be the government’s increased use of enhanced debriefings. For years, Congress has been pushing the Defense Department to take the time to perform thorough debriefings—especially for larger procurements—which White said “can take away a lot of the guess work for a company on whether to file a protest.”

A House Armed Services Committee report on the National Defense Authorization Act of 2022  released in September specifically calls out enhanced debriefings as successful for some Defense agencies in “improving dialogue with companies to increase the transparency of the procurement process and dissuade unsuccessful offerors from filing bid protests.”

“I’m a big proponent of enhanced briefings,” Kenneth Patton, managing associate general counsel for procurement law at GAO, told Nextgov. Patton added that enhanced debriefings provide companies more information upfront that they can then use to decide whether a protest makes sense.

Patton suggested that protests may have declined in recent years due to the government’s increased spending. The government’s total spend and contract spending have increased significantly, “and as a result, more people may have been getting more of a pie, so there may be less incentive to sue your customer,” Patton said. He added that increased use of multi-award indefinite-delivery, indefinite-quantity contracts—where awardees receive a guaranteed minimum—could also lead to fewer protests.  

White said an increased use of other transactional authority, or OTA, contracts, which leaves fewer avenues for firms that disagree with awards, could impact the number of protests, though GAO’s audit does not delve into OTAs. OTAs are contracts designed for cutting-edge or prototype technologies, not traditional technology or professional services.

Though GAO instituted a filing fee of $350 in 2018 for firms filing protests through the agency’s Electronic Protest Docketing System, White and Patton said they did not believe the fee—nominal compared to legal fees that usually go into protests—was deterring protestors. Further, small businesses continue to file almost half of all total protests handled by GAO and federal courts. The EPDS system represents a standardized way for companies of all sizes to file protests as opposed to previous eras, wherein companies could file protest via email.

Over the last fiscal year, GAO sustained 85 of 581 cases decided on merit, resulting in a sustainment rate of about 15%, the same sustainment rate as fiscal 2020. According to GAO, the most prevalent reasons for sustained protests in fiscal 2021 were unreasonable technical evaluations, flawed discussions, unreasonable cost or price evaluation and unequal treatment. 

The “effectiveness rate”—defined by GAO as a protester obtaining some form of relief from the agency either as a result of voluntary agency corrective action or a sustained protest—was 48% for protests filed in fiscal 2021, on par with previous years.

GAO’s report also notes that “a significant number of protests filed with our Office do not reach a decision on the merits because agencies voluntarily take corrective action in response to the protest rather than defend the protest on the merits.” Agencies are not required to report why they opt to take corrective action.