Bid Protests in the Defense Department: An Analysis of Recent Trends

Abstract

The Government Accountability Office (GAO) provides an objective, independent, and impartial forum for the resolution of disputes concerning the awards of federal contracts. Today, filing a bid protest is easy, inexpensive, and does not require the services of an attorney (although protesters may be represented by counsel). In general, the bid protest process takes significantly less time than the alternative of court litigation. Recently there has been a perceived increase in the number of protests and, more disconcertingly, that firms may be protesting government contracts as a strategy to either negotiate their way into contracts or derail an award process already in place. Are these perceptions accurate? Are firms protesting more frequently? An examination of this phenomenon is important as bid protests could have significant detrimental effects to the cost and schedule of defense programs. Our study examined and evaluated some 5,763 bid protests by analyzing data we collected from GAO bid protest decisions and reports, Department of Defense (DoD) reports and press releases, corporate press releases, and other publically-available sources of information. Our research focused on bid protests occurring between FY01 and FY08. The data were segregated by military Service, the Defense Logistics Agency, and all other DoD organizations. Further, we also reviewed the total number of dollars spent on contracts during the period of inquiry, because we believe it is a key factor to consider when evaluating any change in bid protests. To illustrate the significance of sustained bid protests on particular programs we examined three large sustained cases: the Logistics Civil Augmentation Program (LOGCAP) IV (with an estimated maximum value of $50 billion per contractor, if all the options are exercised); Information Technology Enterprise Solutions 2 Services (ITES-2S) program (with an estimated value of $20 billion); and, the Iraq Translation and Interpretation program (with an estimated value of $4.65 billion). Each case study includes background information, an overview of the contract, the items being protested, the result of the protest and the lessons learned in the process.