Congressionally Commissioned Rand Report Says Perceptions About DoD Bid Protests Are Overblown

Bid protests have been a key element in the U.S. defense industry procurement process for nearly a century. Defense contractors, and other companies can file a protest if they think that the U.S. Department of Defense (DoD) has made an error in soliciting or awarding contracts.

Companies are able to file protests with the U.S. Government Accountability Office (GAO), the U.S. Court of Federal Claims, or with the contracting DoD agency.

Critics have asserted that abuse of the bid protest process has significantly encumbered DoD, leading to costs and delays. In response, Congress mandated “a comprehensive study on the prevalence and impact of bid protests on DoD acquisitions.” The study was included in the 2017 National Defense Authorization Act.

The Rand Corporation conducted the study released in January.

Key findings include:

• The DoD isn’t overwhelmed or slowed by frivolous bid protests.
• While there has been an increase, “firms are not likely to protest without merit.”
• Protest activity was much higher in the late 1980s and early 1990s than it is today.
• There is a lack of trust on each side between DoD personnel and the private sector.
• Though there was a doubling of bid protests between 2008 and 2016, protests remain a small percentage of contracts overall – less than 0.3 percent. Many of these contracts were valued at less than $100,000.
• The 11 largest DoD contractors filed few protests. More than half were filed by small businesses.
• The protest process itself proved to be more effective than believed. Agencies were found to revise their original decision in light of a protest.
• “Policymakers should avoid drawing overall conclusions or assumptions about trends from one case when it comes to the efficacy of the bid protest system.”

The Rand report recommended that the DoD and its agencies provide more information in its debriefings after it awards a contract. It also suggested that new approaches are needed to reduce protests by small companies including an improvement in how they are processed. The enhanced debriefing process mandated in the 2018 NDAA should help in this regard.

Summary:

Critics rightfully question the effectiveness of the bid protest process. But assertions that protests are frivolous and lead to significant demands on DoD staff do not stand up to close scrutiny. The facts are unambiguous. Protests are rare as a percentage of overall bids. There is no evidence of rampant abuse. Our experience in filing and defending against hundreds of bid protests aligns with the Rand Report’s conclusions.

Source:

“Assessing Bid Protests of U.S. Department of Defense Procurements,” Rand Corporation, 2018