November 13, 2019

Annual GAO Report Says Bid Protest Activity Down in 2019, but Protestor "Effectiveness Rate" Remains Steady

Holland & Knight Government Contracts Blog
David S. Black | Eric S. Crusius | Terry L. Elling | Gregory R. Hallmark | Christian B. Nagel

On November 5, 2019, the U.S. Government Accountability Office (GAO) issued its annual Bid Protest Report to Congress for Fiscal Year 2019.  The annual report is a requirement of the Competition in Contracting Act and is an opportunity for GAO to provide data concerning its overall protest filings for the fiscal year.  The following are some of our takeaways from this year’s report.

Protesters continued to obtain some form of relief in a substantial number of protests with an “effectiveness rate” of 44% of all protests closed in FY 2019.  This means that of the 2,200 protests that GAO closed in FY 2019, GAO issued decisions sustaining 77 protests and agencies voluntarily took corrective action in response to approximately 891 other protests.  In the past five fiscal years (since FY 2014), GAO’s annual effectiveness rate for protesters has hovered steadily between 44% and 47%

The biggest surprise in the report is a 16% reduction in the number of cases filed with GAO – from 2,607 cases in FY 2018 down to 2,198 cases in FY 2019.  Furthermore, not all of the cases filed with GAO were protests.  Of the 2,198 cases filed in FY 2019, 2,071 were protests, 60 were cost claims, and 67 were requests for reconsideration.  GAO did not offer any explanation for the reduction in protest filings, but possible causes may include:  (1) the full implementation of GAO’s Electronic Protest Docketing System and $350 filing fee, which may be deterring protests of smaller value awards; (2) the 35-day partial government shutdown from December 2018 – January 2019, which may have delayed awards of some contracts and task orders until the end of the fiscal year; and (3) the Department of Defense’s “enhanced debriefing” procedures which became effective in March 2018, and were in effect for their first full fiscal year in FY 2019.  Under DoD’s enhanced debriefing process, unsuccessful offerors generally receive more detailed information concerning the evaluation of their proposals and meaningful answers to their questions, which may result in a decision not to file a protest.

The recent increase in the dollar value of GAO’s jurisdiction over task order protests is not overtly responsible for the reduction in GAO protest.  The 2017 NDAA increased GAO’s task order protest jurisdiction for Department of Defense procurements from $10 million to $25 million.  That increase was effective December 23, 2016.  Thus, FY 2019 is the third fiscal year in which this increased jurisdictional threshold was in effect – and as such does not appear to be the reason for the FY 2019 decrease in protests filed.  Indeed, GAO’s annual report confirmed that the number of closed cases attributable to GAO’s bid protest jurisdiction over task orders increased from 356 cases in FY 2018 to 373 cases in FY 2019.  However, it is possible that DoD may be effectively (but not necessarily intentionally) shielding certain procurements valued under $25 million from protest review by moving them from stand-alone contracts to task orders under multiple award IDIQ contracts.

GAO’s data shows that agencies are adept at screening and assessing protests.  Although agencies voluntarily took corrective action in 891 protests, they chose to defend and fully litigate 587 protests – meaning that GAO issued a “sustain” or “deny” decision on the merits.  When agencies made the judgment to litigate, they were right in their assessment 87% of the time.  Of the 587 protests that concluded with a GAO decision on the merits, only 77 (or 13%) resulted in sustained protests.  GAO issued protest denials in the remaining 510 merit decisions.

The report also addresses reasons for sustained protests; GAO’s compliance with its 100-day deadline; and agencies’ compliance with GAO’s recommendations.  GAO’s report states that the most prevalent reasons for sustaining protests remained the “usual suspects” in FY 2019:  (1) unreasonable technical evaluation; (2) inadequate documentation of the record; (3) flawed selection decision; (4) unequal treatment; and (5) unreasonable cost or price evaluation.  The report also states that GAO rendered a final decision within 100 days of protest submission in compliance with CICA’s requirement, which included the modest extension of decision deadlines for eight protests involving civilian agencies affected by the partial government shutdown.  Finally, GAO’s report confirmed that agencies fully implemented all of GAO’s recommendations in sustained protests during FY 2019.

Finally, it is important to note that the other venues for filing protests including the Court of Federal Claims and procuring agencies are not obligated to and do not publish statistics regarding the number or effectiveness of protests.

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