Government Contracts Monitor

GAO Bid Protests – FY16 Protest Statistics (Sustains at 22.56% & Overall Effectiveness at 46%) and a Look Ahead

December 20, 2016

The Government Accountability Office (GAO) last week issued its Annual Report to Congress on bid protests during Fiscal Year 2016 (FY16 (10/1/15-9/30/16)). As expected, the total number of bid protests filed continued to increase, reaching a new post-2001 high of 2,789 protests – up 6% from FY15 (but still well below the pre-FASA highs in the late 1980s – early 1990s). GAO closed 2,734 protests during the year, of which 616 involved merits (sustain or deny) decisions. Of these, 139 protests, or 22.56%, were sustained – up sharply from 12% in FY15. More importantly, perhaps, is that the overall “effectiveness rate” – i.e., cases in which the protestor recieved some form of relief from the agency, either as a result of corrective action or GAO sustaining the protest – rose to 46% (up from 45% in FY15, and 42-43% in FY12-FY14).

GAO’s high 46% protest “effectiveness rate” is particularly impressive when one considers and discounts the significant number of meritless protests filed each year that are either outside GAO’s jurisdiction, untimely, or otherwise defective.

GAO’s Report identifies the most prevalent grounds for sustaining protests in FY16 as (1) unreasonable technical evaluation, (2) unreasonable past performance evaluation, (3) unreasonable cost or price evaluation, and (4) flawed source selection decision. This ranking reflects some changes from the prior year where improper cost or price evaluation was the most prevalent sustain ground, while improper technical evaluation was fifth. The FY15 top grounds included failure to follow evaluation criteria at #3 and inadequate documentation of record at #4. Conversely, flawed source selection did not make the FY15 top five. Obviously, these grounds may vary from year-to-year, but these lists provide some insight as to the areas in which GAO is finding the most problems.

GAO’s Report states that there were no instances during FY16 where an agency did not fully implement a GAO recommendation, and no instances where GAO failed to issue a decision within 100 days of GAO’s receipt of a protest.

Looking ahead, one can expect a continuing rise in total protests, although likely at a slower rate due to changes in GAO’s task order protest jurisdiction discussed below. One also can expect a continuing high protest “effectiveness rate,” although not necessarily as high as last year’s 46%. However, 2017 will bring number of significant GAO bid protest changes, including

Congress has re-established, and made permanent, GAO’s prior exclusive bid protest authority over civilian agency task order awards having a value of more than $10M (see our prior 10/05/16 blog article);
Congress has increased the minimum dollar value of DOD task orders that may be reviewed to $25M (from $10M); this change eliminates GAO review of DOD task orders between $10 & $25M, and will reduce the number of DOD task orders that may be reviewed; moreover, this change establishes a divergence between the value of DOD and civilian agency task order awards reviewable by GAO;
Interestingly, this divergence somewhat turns on its head a recent GAO decision discussed here, which held that DOD agency task orders placed under GSA contracts are subject to the civilian agency task order, and not DOD, rules; while in that case such meant there was no GAO review of such a task order, the reinstitution of civilian agency task orders reviewability suggests that, in the future, GAO would be able to review a DOD task order placed under a GSA contract exceeding $10M, but less than the DOD $25M minimum;
Importantly, Congress rejected, and did not adopt, certain Senate proposed changes previously discussed here, that, among other things, would have imposed costs on certain non-prevailing protestors and limited the amounts that could be earned by protesting incumbents whose contracts were extended due to a protest;
Instead, Congress has directed a detailed new study of GAO protests, that may play an important role in future Congressional decisionmaking on bid protests, and will bear watching; and
GAO anticipates introducing its new Electronic Protest Docketing System (EPDS) during FY17; GAO published draft details on the proposed EPDS last April (see our prior 4/27/16 blog article), including a proposed initial $350 protest filing fee; GAO presently is considering comments and preparing final bid protest regulations for publication in the Federal Register, as well as EPDS User Guides for Protesters/Intervenors & Agency Representatives, which will be posted on GAO’s website.

In short, GAO’s Report evidences that GAO continues to provide a valuable, cost-effective, forum in which contractors can obtain review of many procurement actions, on an expedited basis, that minimizes procurement delays. GAO’s high “effectiveness rates” shows the important role that protests play in encouraging agency corrective action where determined appropriate, and evidences the value of well-based protests to both protestors and agencies, in ensuring a fair, competitive, procurement process.