Final Report (from the executive summary)
As required by the conference report that accompanied the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2021, and in conjunction with the Acquisition Innovation Research Center (AIRC), this study presents an analysis of information on bid protests stemming from Department of Defense (DOD) procurement activities. This report also responds to additional direction from the conferees, regarding agency-level protests in the Joint Explanatory Statement for the NDAA for FY22.
The study is based in part on interviews and written survey responses with senior DOD program and procurement personnel, senior DOD procurement attorneys, representatives of industry, and members of the procurement bar.
The study presents the following findings:
● The majority of responding agencies within the Defense Department do not actively track the rate at which agencies award protesters the contract that was the subject of a bid protest.
● None of the agencies within DOD tracks the time that it takes to implement corrective action after a decision, nor do most agencies track the percentage of corrective actions that are subsequently protested. Agencies’ records of protests’ final dispositions do not generally show any correlation with corrective action.
● None of the responding agencies analyzes the time spent attempting to prevent, address, or resolve a protest or the efficacy of any actions attempted to prevent the occurrence of a protest. This is partly because contracting officials view these steps as part of the normal pre-award process.
● There is no requirement that agencies gather or submit agency-level protest data. Some agencies have internal policies that call for gathering agency-level protest data, while other agencies submit data only on request.
● There is no uniform mechanism to link related solicitations, bid protests, contracts, and corrective actions. While there are manual processes available to extract data from publicly available contract information, the process is labor intensive and yields information on less than 10% of all procurements.
● It is technically feasible and of low time and economic cost, to integrate data collection processes to offer substantive insights and meaningfully inform procurement policy.
This study concludes with recommendations on how to improve the expediency, timeliness, transparency, and consistency of bid protests at DOD, including agency level bid protests, based on the input from stakeholders and the DOD contracting community. The study sets forth ways in which bid protests are used by DOD units as a management tool, and reviews demonstrated strategies for using bid protests to
strengthen the Department’s acquisition system.
Background Research Materials
In the conference report which accompanied section 886 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2021, Congress called for the Defense Department to launch a new study of bid protests.
The conference report called for a study of bid protests to follow up on an earlier congressionally mandated RAND report, published in 2018 and authored by Mark V. Arena, Brian Persons, Irv Blickstein, Mary E. Chenoweth, Gordon T. Lee, David Luckey, and Abby Schendt. The congressional conferees noted that they “continue to support efforts to improve the handling of bid protests,” and directed the “Secretary of Defense to undertake a study through the . . . Acquisition Innovation Research [Center] . . . to examine elements of Section 885 of the National Defense Authorization Act for Fiscal Year 2018 (Pub. L. 114-328) for which the RAND National Defense Research Institute was unable to obtain full and complete data during its analysis.”
Section 885 of the NDAA for FY2018 had called for a study (ultimately undertaken by RAND) on “the extent and manner in which the bid protest system affects or is perceived to affect . . . the development of a procurement to avoid protests rather than improve acquisition.” The earlier legislation also called for detailed statistical data on bid protests. The 2018 RAND study concluded that although there had been an increase in the number of bid protests filed, their numbers remained relatively small – less than .3 percent of contracts awarded. The RAND study found that while DoD personnel “were concerned that the process incentivized protests, potentially preventing the timely award of contracts,” the private sector “viewed bid protests as a way to hold the government accountable for providing information about how a decision was made.”
The RAND study called for improved post-award debriefings, to stem bid protests. The RAND study cautioned against reducing the timelines for resolving normal protests, and against restricting task-order protests. The RAND study called for an expedited process to resolve protests regarding the smallest contracts, and for changes to reduce protests by small business. The RAND study also called for additional data and recordkeeping, to facilitate future studies.
Responding to perceived gaps in the RAND report, in the most recent conference report Congress called for a new study to address:
- The rate at which protestors are awarded the contract that was the subject of the bid protest;
- The time it takes the Defense Department to implement corrective actions after a ruling or decision, the percentage of those corrective actions that are subsequently protested, and the outcomes of those protests;
- Analysis of the time spent at each phase of the procurement process attempting to prevent a protest, addressing a protest, or taking corrective action in response to a protest, including the efficacy of any actions attempted to prevent the occurrence of a protest; and
- Analysis of the number and disposition of protests filed within the Defense Department.
The conferees emphasized “the potential benefits of a robust agency-level bid protest process,” and called for the upcoming study to evaluate the following for agency-level bid protests: “prevalence, timeliness, outcomes, availability, and reliability of data on protest activities; consistency of protest processes among the military Services; and any other challenges that affect the expediency of such [agency-level bid] protest processes.” The conferees said that the study “should review existing law, the Federal Acquisition Regulation, and agency policies and procedures,” and should “solicit input from across the DOD and industry stakeholders.”
The conference report noted a recent academic study (recently republished in the Public Contract Law Journal) led by Christopher Yukins (this blog’s author) at the George Washington University Law School, which examined the agency-level bid protest process at various federal agencies. The study was commissioned as part of an initiative to reform agency-led protests, launched by the Administrative Conference of the United States (ACUS). The conferees directed the Defense Department “to consider these recommendations” from the ACUS-sponsored study “among those it might make to improve the expediency, timeliness, transparency, and consistency of agency-level bid protests.”
Interim Report on Congressionally Mandated Study: In August 2021, the Defense Department submitted an interim report to Congress on the forthcoming bid protest study, which noted that a study had been initiated and the final report is expected in November 2022.
Christopher Yukins (editor of this site) and David Drabkin are to serve as co-principal investigators on the report commissioned by Congress.
Background Materials
GAO Bid Protest Report: In its annual report to Congress on the bid protests it handled over the prior year, the Government Accountability Office (GAO) noted a significant gap in the available data. “It is important to note,” GAO wrote, “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.” These “corrective action” cases fall into an informational gap. GAO noted: “Agencies need not, and do not, report any of the myriad reasons they decide to take voluntary corrective action.”
Section 809 Panel Report: David Drabkin, the co-principal investigator on the DoD report, was also chairman of the Section 809 panel, which delivered a suite of recommendations on reforming Defense Department acquisition, including a recommendation that Congress establish “a purpose statement for bid protests in the
procurement system to help guide adjudicative bodies in resolving protests consistent with said purpose and establish a standard by which the effectiveness of protests may be measured.” That recommendation helped shape the AIRC bid protest report covered above.
Army Approaches to Bid Protests: In an April 1, 2021 presentation through George Washington University Law School, Bruce Mayeux suggested that the Army’s bid protest system (including the Army’s own bid protest tracker) arguably can serve as a model of a risk-mitigation system. (He stressed that his views were his alone, and did not necessarily represent the views of DoD or its components.)
Defense Department Bid Protest Tracker: Background on the Defense Department’s Bid Protest Tracker, established as part of the Defense Department’s Procurement Integrated Enterprise Environment (PIEE), is here.
Air Force Bid Protest Tracker: In a March 25, 2021 presentation to GW Law’s Procurement Reform seminar, Masters of Studies in Law (MSL) candidate Ryan Taft discussed publicly available information on the internal tracking system that the Air Force uses to monitor protests — a potential model for agencies across the federal government. The tracking system is described at Air Force Federal Acquisition Regulation Supplement (AFFARS) Procedures, Guidance, and Information (PGI) 5333, Protests, Disputes, and Appeals, and is coordinated by the Air Force Installation Contracting Center (AFICC). The tracking system, the “AFICC Protest Reporting Tool,” is behind a secure firewall.
Defense Department 2019 Report on Bid Protests: In 2019, the Defense issued to Congress the Department’s Report on Department of Defense Contracting Dispute Matters. Section 822(a) and (b) of the John S. McCain National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Public Law 115-232) required that the Secretary of Defense submit to Congress a study that covered the frequency and effects of bid protests involving the same contract award or proposed award that were filed at both the Government Accountability Office and the United States Court of Federal Claims. The study provided responses with data (summarized in the accompanying chart) covering Department of Defense contracts from fiscal years 2016 through 2018 and in accordance with section 822(a).
Major Bruce L. Mayeux, It Is All About Risk: The Department of Defense Should Use the Army Materiel Command’s Agency-Level Bid Protest Program as Its New Risk Management Tool, 229 Military Law Review 519 (2021) – From the introduction: In an effort to explain why and how the DoD can use an agency-level bid protest program as a risk management tool, this article (1) describes the DoD’s current position that bid protest abuses at the GAO are causing increased program performance risk and the history behind Congress’s enactment of the “loser pays” bid protest pilot program to help the DoD manage this risk; (2) explains how data in a recently published RAND study suggests that the DoD’s concerns regarding bid protest abuse at the GAO may not be completely supported and, therefore, likely changed Congress’s view towards bid protests as a cause of the DoD’s risk; (3) explains the likely reasons Congress seems to be shepherding the DoD to consider a bid protest program as a risk management tool in its leading inquiries for the Acquisition Innovation and Research Center (AIRC); (4) explains how Congress’s endorsement of the ACUS report on agency-level bid protest reforms signals to the DoD that it thinks an agency-level bid protest program would be an effective risk management tool; and (5) suggests that the AMC’s agency-level bid protest program would be an effective model for the DoD to use as a risk management tool because many of the ACUS report recommendations are fully or partially in practice.
On Data Needed to Assess Bid Protests: GW Law student Will Dawson has published Data Scarcity in Bid Protests: Problems and Proposed Solutions in the Public Contract Law Journal; a manuscript version from GovKData.com is linked here; SSRN version. Abstract: The bid protest process is a vital part of a well-functioning government procurement program. While the United States’ federal bid protest system has supporters and detractors, the government does not release enough information to publicly resolve foundational questions about how well the process is working. The few studies which have been carried out have yielded some interesting insights, but they are not sufficiently detailed to inform meaningful change in the long term. The author has written a program which enables the computer-aided analysis of over 7,000 bid protests at the GAO. This Note seeks to articulate the data which that research uncovered and proposes a data collection program which would greatly expand the information currently available. The Note presents a proposed data reporting sheet, designed by the author, which would generate the data necessary, year over year, to effectively monitor the bid protest system’s health with a minimal amount of added work for government personnel and a program which would automate the majority of the necessary collection. The Note concludes with a discussion of the costs and benefits of generating that much data for the government, attorneys, and contractors.
Report on Bid Challenges Across the European Union: Following up on the SIGMA (a joint research unit of the EU and the OECD) 2007 report on bid challenge systems across the European Union, the European Commission published its “Practical Guide on Remedies” (2021), a detailed study of bid challenge systems in many EU member states and the United Kingdom.
Daniel Schoeni, Challenge Procedures Brought By U.S. Economic Operators in EU Member States, 2023 Upphandlingsrättslig Tidskrift (UrT) 1.