Kate M. Manuel
Legislative Attorney
Moshe Schwartz
Specialist in Defense Acquisition
Bid protests, especially bid protests filed with the Government Accountability Office (GAO), have been a topic of congressional and public interest due, in part, to reports that the number of such protests is increasing. GAO recently reported that the number of bid protests, cost claims, and requests for reconsideration filed with it increased 5% between FY2011 and FY2012. This comes after increases of 2% to 20% in each of the prior four fiscal years, for an overall increase of approximately 50% between FY2008 and FY2012. GAO also recently requested that Congress approve the agency’s first-ever bid protest filing fee (potentially $240 per protest). In addition, in 2011-2012, the Department of Veterans Affairs (VA) declined to adopt the recommendations made by GAO in a series of 18 bid protests. GAO construed certain amendments made to the Veterans Benefits Act in 2006 as requiring VA to make certain purchases from veteran-owned small businesses. VA disagreed, and refused to modify its procurement practices. GAO noted VA’s noncompliance in a November 13, 2012, report to Congress. However, shortly thereafter, on November 27, 2012, the U.S. Court of Federal Claims found that the relevant statute was ambiguous and that VA’s interpretation was entitled to deference.
GAO, the contracting agencies, and the Court of Federal Claims all have authority to hear bid protests. However, GAO hears more protests annually than the Court of Federal Claims, the only other forum for which data are readily available. Legislation and regulations establish what issues may be protested with GAO and who may bring a protest. GAO may hear claims of alleged illegalities or improprieties in solicitations, cancellations of solicitations, or awards or proposed awards of contracts. However, it is barred from hearing certain issues, such as challenges to small business size certifications. Any “interested party”—or actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by failure to award it—may file a protest. Procedures for filing and conducting GAO protests are designed to ensure “inexpensive and expeditious resolution of [bid] protests.” Protesters need not file formal briefs or technical pleadings, can represent themselves, and can have protests decided without hearings. All protests are to be resolved within 100 calendar days of filing, and deadlines for mandatory and optional events within the GAO bid-protest process ensure decisions can be reached within this time frame.
Filing a GAO protest generally triggers an automatic stay of contract award or performance during the pendency of the protest. A similar stay does not result when protests are filed with the Court of Federal Claims. However, agencies can override stays because urgent and compelling circumstances will not permit waiting for GAO’s decision, or because performance of the contract is in the best interests of the United States. Agencies must inform GAO of their override decisions, but GAO cannot prevent an agency override.
GAO may deny or sustain a protest. A denial allows the agency to proceed with the challenged award. When GAO sustains a protest, it also makes recommendations to the agency about the challenged award, such as re-competing the contract or issuing a new solicitation. GAO’s recommendations are not legally binding upon the agency because the “separation of powers” doctrine precludes legislative branch agencies, such as GAO, from controlling the actions of executive branch agencies. However, the agency is to notify GAO if it does not fully implement GAO’s recommendations. GAO is, then, to inform Congress of agency noncompliance. Agencies comply with GAO recommendations in most protests. Protesters disappointed with GAO’s decision can seek reconsideration from GAO. They can also “appeal” GAO’s decision by filing a bid protest with the Court of Federal Claims.
Date of Report: December 17, 2012
Number of Pages: 23
Order Number: R40228
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