Postscript: The Protest Process by Vernon J. Edwards

[bob7947]

In February, Ralph asked what purpose the protest process served. See The Protest Process: What Purpose Does It Serve?, 38 NCRNL ¶ 10. In this Postscript, I ask what damage it does. My answer is that it is a drag on an essential activity of our Government, the procurement of goods and services.

Our Government relies on contracts and contractors and the goods and services they provide, and the protest system is an impediment. It impedes procurement in three ways. First, protests are expensive from the standpoint of total system cost. Second, protests delay procurements, which affects agency operations. Third, fear of protests and attention to protest “case law” stupefies the procurement workforce and encourages them to adopt inefficient procurement practices.

Please Read - Postscript: The Protest Process.

[formerfed]

Vern, you hit another home run!  Two points I want to make.  First, the procurement process can be changed relatively easy when benefits are obvious.  OTA is an example.  Second, so many protests are based upon questionable issues.  Any company with money can hire a skilled attorney knowledgable in contracting.  It’s easy for them to find faults at some level and raise them even though they might ultimately be considered as not truly significant in the award decision.. 

Congress needs to take the time and effort to examine these points and improve both the procurement process and the subject of protests specifically.  Here’s hoping something positive results.  

[REA'n Maker]

I really like the idea to eliminate the decision itself as grounds for protest, if for no other reason that the current system is based on the premise that two parties can be forced into a contractual relationship without regard to the will of one of the parties.  No one outside government would ever consider such a preposterous concept. The goal of a protest is to win the contract in question, not "increase confidence in the system".

 

“The threat of protest has valuable regulatory effects; it both deters and corrects inappropriate awards”

Nonsense.  How many actual "inappropriate awards" have been deterred by the protest process?  In all of my reading of GAO decisions, I have never seen an award that was deemed anything other than "incompatible" with the forest of laws, rules, regulations, directives, policies, clauses, provisions, and random thoughts of program and policy offices which comprise the basis of the Federal contract award process.   If a protest has ever actually uncovered malfeasance, I'd like to see it.

 

"increasing bidders’ confidence in the integrity of the procurement system"

More nonsense.  A protest is the weapon of the lawyered-up, entitled, corporate entity with the resources to engage in prolonged litigation.  One more advantage for the big guy.  If the one granted the CICA stay is the incumbent as they almost always are, protests do the exact opposite of increasing confidence in the system.

 

"increasing the public’s confidence in the integrity of the system,"

Get over yourself pal; the public has no idea what GAO does or doesn't do.  (And I'm not sure who you think is talking GAO up to the "public" because it sure ain't me.)

 

"He artfully characterized the costs as “real"

Unlike the billions of dollars raked in over the years by undeserving incumbent contractors as the result of frivolous CICA stays? (who by the way have no incentive to do a good job while working under a stay).

 

[Vern Edwards]

I see you were inspired by Daniel Gordon's defense of the system. 😃

[formerfed]

5 hours ago, REA'n Maker said:

"increasing the public’s confidence in the integrity of the system,"

Get over yourself pal; the public has no idea what GAO does or doesn't do.  (And I'm not sure who you think is talking GAO up to the "public" because it sure ain't me.)

😄

[Vern Edwards]

Don't worry. The protest system reassures the public.

https://www.justice.gov/usao-dc/pr/retired-navy-admiral-and-business-executives-arrested-connection-alleged-bribery-scheme

[C Culham]

"We have not seen any accounting or estimate of the total costs incurred due to bid protests and we have few facts, but we guesstimate that the total annual cost of the protest system—including litigation cost, the immediate and collateral effects on agency mission operation costs, and the associated executive and judicial branch administrative costs, and the direct and indirect costs to industry—comes to more than $100 million a year."

I am not completely sold on the idea, yet I cannot quantify my personal reassurance that GAO protest system is good thing but it is something more than 0.   Why?

Having been a CO for several land use agencies (my terminology) I am not completely sold that protests are all filed by a "lawyered-up, entitled, corporate entity".   My experience suggests that some are by the mom and pop that were frustrated by a system that finally drove them to an attempt use an independent body to voice their concerns about the rules of the game.    The 30,000 foot view suggests that "thousands" of protests (2025 in  FY 2023) is a subtle exageration.   By example using 2023 there were the instances where a single case was filed but represented multiple docket numbers to reach the 2025 number.   Likewise only 1,957 were protests with the remaining being cost claims or claims for reconsideration.   

And then there is the guesstimate of $100 million as compared to the $765 billion in procurements in 2023. 

With these two thoughts money alone does seem like a good justification to do away with a system where mom and pop for the cost of a stamp and time to jot their concerns down on a some paper can actually take on the mammoth procurement machine of the Federal government.   

 

[Vern Edwards]

1 hour ago, C Culham said:

With these two thoughts money alone does seem like a good justification to do away with a system where mom and pop for the cost of a stamp and time to jot their concerns down on a some paper can actually take on the mammoth procurement machine of the Federal government.   

Anybody can file a protest. It's another thing entirely to represent yourself pro se, i.e, without a lawyer. Mom and pop would be dealing with GAO and agency lawyers and perhaps an intervenor's lawyer. In today's complex negotiated procurements—the RFQ that I have mentioned elsewhere for grounds maintenance at a small facility was 90 pages long and incorporated a 483 page government document—the notion of many successes by moms and pops jotting down their concerns is laughable. But yes, moms and pops have won protests. on occasion. I can name some.  My personal favorite is The Finlen Complex, B-288280, October 10, 2001.

If a party proceeds pro se they cannot get competing proposals and government information under a protective order.

While mom and pop may represent themselves, I think they have little chance of success if the protest issues involve complex rules and issues. In the days when sealed bidding was used more often many protests were simpler, based on procedural issues, success may have been more possible. I don't know. But negotiated procurement in today's more complex regulatory environment are another matter.

1 hour ago, C Culham said:

The 30,000 foot view suggests that "thousands" of protests (2025 in  FY 2023) is a subtle exageration.   By example using 2023 there were the instances where a single case was filed but represented multiple docket numbers to reach the 2025 number. 

Actually, in FY 2023 GAO received 2,025 "cases", of which 1,957 were protests, the others being associated cost claims and requests for reconsideration. Each docket number in a decision represents issues and paperwork that must be handled. With that in mind, look at B-219956.200, July 10, 2023.  Think of the paperwork that had to be processed by the agency, GAO, and industry in that matter.

1 hour ago, C Culham said:

And then there is the guesstimate of $100 million as compared to the $765 billion in procurements in 2023. 

Well, $100,000,000 is $100,000,000 that could be spent for other things or just not spent at all. Moreover, cost is not the only issue, as I pointed out.

For an example of a recent pro se outcome see ARiA, B-422365, May 28, 2024. Not all pro se cases are "mom and pop'. Two outcomes with which you might be familiar are Crescent Helicopters, B-283469.2, Nov. 30, 1999 and Crescent Helicopters, B-284734, May 30, 2000. Both  protests were denied. Dean H. Shealy, the general manager who represented them, was no "pop". If you're going to see benefits for moms and pops who want to protest, don't exaggerate the number of such cases.

But thanks for reading. I appreciate the time and attention you gave to the article and your opinion. However, I'm not sure what you meant by your conclusion:

1 hour ago, C Culham said:

With these two thoughts money alone does seem like a good justification to do away with a system where mom and pop for the cost of a stamp and time to jot their concerns down on a some paper can actually take on the mammoth procurement machine of the Federal government.   

Did you mean "does [not] seem like a good justification"?

[formerfed]

Someone just made me aware of this from a law firms website targeting government contractors

Quote

Protests ensure that contractors competing for federal contracts are evaluated fairly and in accordance with the solicitation and the FAR. As the budgets of certain federal agencies shrink, the bid protest process becomes an especially important tool for contractors in pursuing or maintaining existing federal work.

Often overlooked perspectives on maintaining the status quo are contractors marketing departments that like the current situations and law firms specializing in this field. 

[Vern Edwards]

31 minutes ago, formerfed said:

Protests ensure that contractors competing for federal contracts are evaluated fairly and in accordance with the solicitation and the FAR. As the budgets of certain federal agencies shrink, the bid protest process becomes an especially important tool for contractors in pursuing or maintaining existing federal work.

Sales pitch.

Protests are a significant source of revenue for some law firms, but I don't object to that. We are a litigious nation. Litigation is in our national DNA.

I object primarily to the delays and collateral effects of protests on the conduct of acquisitions.

I'm not sure how contractor marketing departments view protests.

[formerfed]

1 hour ago, Vern Edwards said:

I'm not sure how contractor marketing departments view protests.

Jobs are often at stake when results are disappointing as well as bonuses are there for bringing in new or sustaining revenue.  Protests are a tool.

[Vern Edwards]

Marketing departments see protests as a marketing tool?

[formerfed]

A way to achieve business

30 minutes ago, Vern Edwards said:

Marketing departments see protests as a marketing tool?

A way to achieve business revenue - saving face, getting a second bite of the apple, or just restarting the process.

[C Culham]

20 hours ago, Vern Edwards said:

While mom and pop may represent themselves, I think they have little chance of success if the protest issues involve complex rules and issues.

 

20 hours ago, Vern Edwards said:

If you're going to see benefits for moms and pops who want to protest, don't exaggerate the number of such cases.

 No intent to exaggerate or even use the thought as a premise to damn the idea.  Just thoughts that I think should be addressed.  The question might be was the decision either way precedent setting?   

I played around just a little and looked at GAO's website and WIFCONs protest by FAR site.  I looked at 15 protests.   By looks but by no means statistically supportable 3 appeared to be in general to be protests by mom and pop.   My discriminating factor was in the 3 only one name was listed as representing the protester and that name did not have an Esq. following it.

20 hours ago, Vern Edwards said:

Actually, in FY 2023 GAO received 2,025 "cases", of which 1,957 were protests, the others being associated cost claims and requests for reconsideration.

Agrees with the numbers in my post.  For everyone I got the numbers from this source which I suspect we are both using.  https://www.gao.gov/products/gao-24-900538#:~:text=During the 2023 fiscal year,and 31 requests for reconsideration.

20 hours ago, Vern Edwards said:

Well, $100,000,000 is $100,000,000 that could be spent for other things or just not spent at all.

Yes but as it goes would it be better spent or just spent away on something less?   I do not have confidence that the saving would be used wisely.  By no means statiscal supportable but by my simple math in the big picture it is  $13.07 for every $100,000 spent in total Federal procurements.

 

21 hours ago, Vern Edwards said:

Did you mean "does [not] seem like a good justification"?

Thank you for catching my omission.   Yes the "not" was intended.   I hope you understand that my thoughts are intended to help narrow the true benefits of revamping how entities can challenge the rules of the game.  And who needs to be best served by the revamp.   Again from probably even higher than 30,000 feet the intent of the Federal procurment process is giving the opportunity for everyone to play, so the question might be should everyone be able to challenge as well?

Both articles have been thought provoking for me, thanks for sharing them with the WIFCON community.

[Vern Edwards]

Thanks for reading them and sharing your thoughts!

[KeithB18]

This comment kind of cuts both ways, but after 19 years of working procurements, I took a job two years ago primarily focused on Financial Assistance. (It was a little bit of a bait and switch situation, but that's a different topic.) I thought that the lack of a protest forum for disappointed Financial Assistance applicants would be a nice feature of the job. It's not--everyone working in and around Financial Assistance is just as scared of getting anything wrong as your average poorly trained contracting officer. 

So I wouldn't necessarily expect CO behavior to change if protests went away, which is one of Vern's points. Protests are not what causes the plodding place, poor solicitations, and bad outcomes our procurement system produces. Rather, it is the byzantine rules, suffocating bureaucracy, and overly risk averse management (among other things) that leads us there. I can honestly tell you that the Financial Assistance regime is way more screwed up than the procurement function. I know that's hard to believe, but it is 100% true. 

That said, the existence of this forum and the people on it, and the lack of a similar forum for Financial Assistance (as far as I know; I can't find one), proves that the best procurement professionals will put the necessary rigor and thinking into their work. That sort of thing doesn't exist on the Financial Assistance side. So, if the protest regime makes some procurement pros think harder about their jobs, maybe it isn't a total loss. (or maybe it is.)

 

[AllGray]

If the procurements weren't incorrect or incorrectly managed to begin with, we wouldn't need the protests, right?

Eliminating a check-and-balance step from something with this much riding on it is nothing short of pure catastrophe. It invites increased "insider" and wildly unethical actions to become more common. 

Have you checked out this recent gem? 

The Billion Dollar Secret: Secrets to Winning Business from a Former Government Executive (ParkerGroup) Paperback – July 23, 2020 

by  Gloria Parker  (Author), Mike Rice  (Author)

This previous ED / HUD CIO outright states that contractors need to take government people to sporting events, buy gifts, and attend children's birthday parties. 

And you want to remove protests? 

 

If you don't have anything to hide, why are you trying to prevent someone from investigating how you did it?

 

[Vern Edwards]

1 hour ago, AllGray said:

And you want to remove protests? 

 

If you don't have anything to hide, why are you trying to prevent someone from investigating how you did it?

I don't know to whom ("you") that comment was addressed or whether it concerned my article or someone's comment about it. But since this thread was about my the article I will assume that AllGray has addressed me, and I respond by saying that AllGray may not have read it carefully, or thought it through.

@AllGray As explained in the article, I would replace the current protest system with a claims/disputes system. Agency source selection decisions would still be subject to investigation, and agencies would also be subject to having to provide monetary compensation for breach of implied contract.

Thus, under that system, incompetence would still be subject to discovery, assessment, discipline, and correction. Criminality would be subject to discovery and prosecution. Grossly improper contract awards could even be terminated.

That is not a scheme to "hide" anything or prevent investigation into how a decision was made.

[AllGray]

2 hours ago, Vern Edwards said:

I don't know to whom ("you") that comment was addressed or whether it concerned my article or someone's comment about it. But since this thread was about my the article I will assume that AllGray has addressed me, and I respond by saying that AllGray may not have read it carefully, or thought it through.

@AllGray As explained in the article, I would replace the current protest system with a claims/disputes system. Agency source selection decisions would still be subject to investigation, and agencies would also be subject to having to provide monetary compensation for breach of implied contract.

Thus, under that system, incompetence would still be subject to discovery, assessment, discipline, and correction. Criminality would be subject to discovery and prosecution. Grossly improper contract awards could even be terminated.

That is not a scheme to "hide" anything or prevent investigation into how a decision was made.

I was speaking to you, and I did read the article. 

Although it's literally just a bunch of "someone else should do x," why not jump all that and say procurement officials SHOULD do things correctly to begin with? Your follow-up even says that the issue needs to be dealt with through better management, correct? 

So now you want better managers, processes, and people, while stripping some of the protections afforded to those who need to push back when this happens. Not really touching on the overloading of GAO or the likely increase to that 180day limit that would affect right? Do you understand the differences in Costs etc for a small business doing an agency-level protest vs GAO  or FC? Would you say providing for the reimbursement for lawyers' fees and proposal preparation fees would be acceptable?

Expect some interesting proposal spending in the future. 

"Protests against the evaluation of bids and proposals and contractor selection decisions should be eliminated entirely." - because of that aforementioned quality management, you point out this is a fun one. You also go into saying you could see paying for proposal preparation costs but no changes of direction to the actual contract, re-evaluation, or re-award. 

It sounds to me like you want to turn the government into an unassailable movement machine that lays to the wayside any concept of checks and balances in favor of moving unethical/incorrect/foolish contracting actions forward simply in the necessity of this "speed" which is already caused by that inefficient management and all the rest you pointed out. 

So yeah man. I read it. I quoted what you said precisely, and I completely disagree. Bringing the fear of a protest to someone who is obviously doing things the wrong way is one of the only ways that we keep this juggernaut on the right track. 

[Vern Edwards]

6 hours ago, AllGray said:

So yeah man. I read it. I quoted what you said precisely, and I completely disagree.

So be it.

I'm glad you got that off your chest, because you seem stressed. I'm also glad that everyone reading this thread can assess my argument and proposal in light of your rants. I'm glad you took up the cudgel.

6 hours ago, AllGray said:

It sounds to me like you want to turn the government into an unassailable movement machine...

Strikeout added.

A movement machine, yes, but not unassailable. My proposal would allow an unsuccessful offeror to "assail" an agency via a claim rather than a protest. A claim need not be costly, and claims would give claimants a chance to negotiate an acceptable resolution with an agency and a chance to recover some costs if the agency did not act property, which most protesters cannot do via bid protest. And a well-written claim might persuade an agency to take corrective action to avoid criticism from IG's and Congress for having to pay costs.

You don't seem very sophisticated about the protest system.

Protesters succeed at the GAO in only about 20 percent of cases that go the distance, and then all the protester usually gets is another chance to spend more B&P money. Winning a protest does not mean that the protester will get the contract. An agency that loses a protest might take corrective action to clean up its act and then choose the same company it chose the first time. And protests to the GAO are not cheap. The chances of winning a protest without professional legal representation are not good.

The protest system has been very costly to businesses who want to sell to the government, even winners, because agencies' fears of protests have given rise to a very costly and time-consuming source selection process. And a century of protests has not done much if anything to improve the way agencies conduct source selections. They're as bad as they've ever been.

The protest system really has got to go, but, trust me, it won't. The politicians will never get rid of it.

[AllGray]

Yes, a negotiation between groups with completely inequal power is always a great idea. I suspect I know why you enjoy this completely inequal distribution of power. 

You seem ignorant of how this works from both ends. The threat of protest is often enough to move the needle where it needs to be, or more importantly, where it should have been if the acquisition was undertaken by someone competent to run it, and who cares enough to do it right.