Amend Protest Rules Background Protests, both before and after contract award, are an important means for objectively reviewing meritorious grievances of disappointed bidders of government actions. Forcing a review of questionable or improper actions strengthens the procurement system and maintains the integrity and accountability of government. However, unless the protest is clearly frivolous, and thus subject to summary dismissal, it delays further action on the procurement no matter how likely it is that the government's actions were correct. This delay can force all competitors and the government to freeze their actions until the protest is resolved unless the government can demonstrate that the acquisition is "urgent and compelling." Even a frivolous protest can cause some delay and additional workload prior to summary dismissal if the agency has to notify all other competitors and the agency and interested competitors have to respond as to whether the protest is frivolous. In 1992, 3,200 protests were filed with the General Accounting Office (GAO). Another 350 protests involving the acquisition of information technology (IT) under the Brooks Act were filed with the General Services Board of Contract Appeals (GSBCA).1 A protester can file a protest under a solicitation with the contracting agency, GAO, the Court of Federal Claims, District Courts, or the GSBCA (if IT is involved). Protests submitted to the contracting officer at the contracting agency are less costly and do not necessarily involve significant delays.2 The various protest forums are set forth in Table 1. Need for Change People in industry and government believe that communication during the procurement process has been curtailed because of the fear that a statement by a government official will be misunderstood and will inadvertently trigger a protest.3 This causes inadequate debriefings of offerors, which in turn creates suspicion and can generate a protest that could have otherwise been avoided. The procurement system cannot improve without better channels of communication between buyers and sellers. In addition, fear of protests has had unintended adverse consequences on the procurement system. Protests have caused procurement officers to redirect their attention away from service to the customer to following rules and procedures rigidly and compiling paperwork in an effort to make their decisions "protestproof." This, of course, results in costly additional paperwork, delays in procurements of goods and services required to meet public needs, and greater administrative costs to the government and taxpayer. Moreover, a highranking Treasury Department Information Resources Management (IRM) official recently said, "The internal costs of increased staff hours [to avert protests] may not be immediately noticeable in the government's budget, but it does become noticeable when the attention and energy of the IRM staffs are diverted from implementing quality systems to merely managing the process."4 Table 1 Statutes Affected and Changes Proposed Forum: Contracting Agency Standard of Review: Administrative review to ensure actions were in keeping with policies, laws, and regulations. Remarks: Allows higher level management to have feedback on how contracting officials are performing. May not be seen as objective. Forum: General Accounting Office Standard of Review: Review to determine whether there is a violation of law or regulation, with presumption of correctness of the agency action and acceptance of agency's version of facts unless disproved. Remarks: GAO has moved toward more formal proceedings, with the possibility of hearings. Forum: General Services Board of Contract Appeals Standard of Review: Review to determine whether there is a violation of law, regulation, or delegation of procurement authority. The GSBCA gives due weight to the statutory goals of economic and efficient procurement with no presumption of correctness of the agency action (i.e., a de novo review). Remarks: 1) De novo review allows GSBCA to review entire record anew; 2) it allows the GSBCA to, in effect, substitute its judgment for that of the contracting officer; 3) more effort is required to prepare and defend such a case; and 4) suspension of procurement freezes parties in place while GSBCA conducts its review. Forum: District Courts Standard of Review: Review to determine whether there was a clear violation of applicable law or regulation or no rational basis for the government action. Remarks: Protesters must show that the government violated a statute that was created to protect their interests (e.g. Small Business Act). Forum: Court of Federal Claims Standard of Review: Review to determine whether there was a clear violation of statute or regulation or whether there was no rational basis for the government action. Remarks: Has nationwide jurisdiction, can conduct hearings around the country, and is more experienced in government contract issues as a result of its jurisdiction to resolve contract performance controversies. End Table 1 A recent survey of over 1,000 line managers confirms these contentions. Over 80 percent of federal managers surveyed believe that their contracting officers cause delays by rigidly following procurement rules, and over 60 percent believe that contracting officers are most concerned about making awards protestproof.5 Evolution of Existing Systems. Prior to 1984, administrative protests were an inexpensive administrative procedure for contractors to force an objective review of contracting agency actions. The system became more complex in 1984 when the Competition in Contracting Act (CICA) vested both GAO and GSBCA with explicit statutory authority to undertake ever more formal reviews using independent standards. Where company presidents or marketing executives once argued their protest cases, attorneys now usually do so. This is primarily because the GSBCA uses more courtlike procedures such as discovery and fact finding and the entire contract record is reviewed anew (or "de novo"). GAO has indicated that if it too employed certain GSBCA practices, like allowing depositions, it could lead to higher costs that could make the protest system less accessible and affordable.6 However, through such practices, the GSBCA, a quasiindependent body, can potentially substitute its judgment for that of agency contracting officials. Many contractors think this allows more effective review of agency actions as was intended by CICA. Most procurement professionals and line managers, however, believe GSBCA should use the same test used by the courts that would protect contractors against abuses of discretion and not secondguess agency judgments. The 1984 CICA changes were to be tested for three years. However, after 18 months, the protest provisions became permanent through other legislation.7 Administrative Protests. The vast majority of protests are filed in the administrative forumsthe GAO or the GSBCA. If a protest is filed in the agency before award, the government must suspend work on the procurement except in urgent and compelling situations. A protest generally can be filed at any time prior to the closing date for receipt of offers (e.g., challenging the fairness of a solicitation document) or within 10 days of contract award (e.g., challenging the award). If the protester wins, the government may be required to resolicit the requirement, reevaluate the offers, cancel the contract (if already awarded), or take other appropriate action. In many instances the protester is entitled to recover his bid or proposal preparation costs, as well as attorney fees. These abovecited remedies were intended to protect disappointed bidders, but do so at the expense of the government. For example, while the government can be directed to pay a protester's legal fees, a protester cannot be assessed any penalty for delaying a government contract award or for the government defense against a frivolous protest. Avoiding delays in government programs is the current incentive for the government to painstakingly document procurement conformance with the many applicable statutes and regulations. However, this practice adds time to the procurement process and ultimately delays contract awardand the delivery of goods and services that line managers critically need. Given the significant consequences of contracting officer decisions, a uniform standard for judging the correctness of those decisions is needed to ensure that accountable decisions are not secondguessed. Further, the Report of the Acquisition Law Advisory Panel to the United States Congress on Streamlining Defense Acquisition Law (Section 800 Panel) reviewed the protest process. A key recommendation of this panel was that the Court of Federal Claims should be the single judicial forum to consider all protests that now can be considered by any District Court or the Court of Federal Claims.8 This change would allow expert judges of the Court of Federal Claims to resolve these sometimes complex contracting issues. Endnotes 1. Section 111 of the Federal Property and Administrative Services Act (40 U.S.C. 759 et seq.). 2. The Professional Services Council has noted that one clearly objective agency protest system is the Headquarters Level Protest Program of the Army Materiel Command (AMC). This alternative dispute resolution program has been very successful as a highlevel agency review of bid protests. The filing times and procedures used by AMC were published in a set of AMC guidelines that are routinely included in AMC procurements. The AMC Pilot Program resulted in effective relief for protesters in approximately 20 percent of the cases filed. Only one AMC decision has been overturned by GAO since initiation of the HQ, AMCLevel Protest Program in April 1991. The Pilot Program has now been made permanent. The AMC procedures provide for 10 working days to file a protest from the date the affected offeror knew or should have known of the grounds for the protest, per FAR 33.103(b)(2). A protester to AMC also agrees not to file a protest at GAO, GSBCA, or any other forum while the AMC protest is pending. AMC review of the protest is made at the headquarters level and the decision is binding on the contracting officer. 3. Interview with Council for Excellence in Government members, May 11, 1993. 4. Broadbent, Steven W., Deputy Assistant Secretary for Information Systems, Department of the Treasury, "Urgent Need for ADP Procurement Reform," Government Workplace Products and Services Report (Fall 1990). 5. U.S. Merit Systems Protection Board, "Workforce Quality and Federal ProcurementAn Assessment," July 1992. This is the report of a followup survey by the Merit Systems Protection Board and the Office of Federal Procurement Policy of line managers on the federal procurement system. 6. Murphy, Robert, Senior Associate General Counsel for Procurement Law, General Accounting Office, and Judge Stephen Daniels, Chair of the General Services Board of Contract Appeals, speeches in the Daily Report for Executives (Professional Services Council, July 28, 1993). 7. Section 961(c) of P.L. 99500. The Paperwork Reduction Reauthorization Act amended the Competition in Contracting Act (P.L. 98369) to make the GSBCA protest authority permanent. 8. Aquisition Law Advisory Panel to the United States Congress, Streamlining Defense Aquisition Law (March 1993), pp. 1214.
You can attach your comments to this document. If you enter your email address in the empty box below and click on the submit button, you will receive via email a form that allows you to link your views to the NPR hypertext.
Subscribe Unsubscribe No Action