GAO Bid Protests: Trends, Analysis, and Options for Congress

Moshe Schwartz
Analyst in Defense Acquisition

Kate M. Manuel
Legislative Attorney

Bid protests on federal government contracts filed with the Government Accountability Office (GAO) have recently received increased congressional scrutiny due to protests of high-profile awards and reports that the number of protests is increasing. The delay of contract award or performance triggered by a GAO protest, coupled with the increasing number of GAO protests, has also prompted concerns about the potential impact of protests upon government agency operations, especially in the Department of Defense. 

GAO is one of three forums with authority to hear general bid protests against the government. The GAO's bid-protest process includes some unique features—most notably, the automatic stay of contract award or performance during a GAO protest—that make GAO a desirable forum for many disappointed bidders and offerors. 

In recent years, the number of protests filed with GAO has steadily increased. Excluding protests from expanded jurisdiction, the number of bid protests increased steadily from approximately 1,150 in FY2001 to over 1,800 in FY2009, an increase of nearly 60%. However, most of these protests were dismissed, withdrawn by the protester, or settled prior to GAO issuing an opinion. Since FY2001, on average, GAO issued an opinion on only 22% of bid protests; on average, GAO opinions sustained the protest 22% of the time. 

From FY2001 to FY2009, on average 5% of bid protests were sustained; neither the number—nor percentage—of protests sustained during this period increased significantly. In FY2001, GAO sustained 66 protests (6% of all protests). In FY2009, GAO sustained 57 protests (3% of all protests) despite a 60% increase in the number of bid protests filed over the same period. According to GAO officials, among the most common grounds for sustaining protests are the contracting agencies not maintaining adequate documentation, errors in how agency officials conduct discussions with offerors, flaws in cost evaluations, contracting agencies not adhering to established evaluation criteria, and organizational conflict of interest. 

Protesters can obtain relief from a protest when GAO sustains a protest or when agencies voluntary act to correct the allegation charged in the protest. The percentage of protesters obtaining relief from an agency is called the effectiveness rate. The effectiveness rate may be a good way to measure the number of protests that have actual or potential merit. From FY2001 to FY2009, the effectiveness rate of GAO protests gradually increased from 33% to 45%, respectively. The increase in the effectiveness rate could indicate that not only is the number of protests increasing but the number of protests that have merit is increasing. 

The number of bid protests filed against the Department of Defense (DOD) consistently increased, from approximately 600 in FY2001 to 1,050 in FY2009, an increase of almost 75%. During the same period, on average, 60% of all bid protests involved DOD contracts even though DOD accounted for an average of 68% of all federal spending. From FY2001 to FY2009, neither the number—nor percentage—of bid protests sustained against DOD has consistently increased. According to data provided by GAO, protests against DOD were generally sustained at a lower rate than the rest of government (5% vs. 6%, respectively). 

This report contains options for Congress related to minimizing the number of protests filed with GAO and the delay of award/execution often associated with protests being sustained.


Date of Report: July 2, 2010
Number of Pages: 27
Order Number: R40227
Price: $29.95

Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.