VIDEO: Trends in Bid Protest Litigation
Budget cuts and a tough economic environment over the past several years have contributed to a rise in bid protests. Cost/price has become one of the primary deciding factors in who wins an award, and government contractors are more willing to fight for the fewer contract dollars that are available today. In fact, bidders are increasingly engaging in multiple rounds of litigation at the agency-level, GAO, or Court of Federal Claims to secure those prized procurement dollars or opportunities to obtain key expertise or establish a customer relationship.
In this two-part video alert series, Crowell & Moring partner Amy O'Sullivan discusses the impact that a smaller pool of procurement dollars has had on bid protest litigation, recent trends in bid protest litigation, and corrective action that is more frequently a procuring agency's response to a bid protest.
Part 1: Overall Trends in Bid Protest Litigation
Part 2: Trends in Corrective Action
What changes have you noticed lately in bid protest litigation?
We've observed over the past couple of years that there have been more of these cases, so we've come to ask ourselves why, if jurisdictional expansion is one reason. But companies are fighting for contracts, and in order to do that, it's not just an initiation of litigation now that we've seen, but they are going to be persistent. They are not only going to file at one of the three forums that are the options out there today, but they will seek—it's almost like an appeals process—but it really is a second bite at the apple.
How are bidders taking multiple 'bites at the apple' in their bid protests?
So, if you start the protest process at GAO, and somebody is unsuccessful, they're not just going to give up. They'll follow on with the subsequent round of litigation now at the Court of Federal Claims. So, instead of these cases just starting and stopping—more of them—there are now multiple rounds of fighting for who is the awardee of the same procurement.
What impact have budget cuts and a tough economy had on bid protests?
Companies are more willing to fight for every last procurement dollar that's out there, but it's also had an impact on the nature of the issues that we have been fighting over, and also in areas where the agencies have made more mistakes. Cost or price has become more and more a deciding factor in who wins an award decision. This is where agencies lack because of inexperience of the acquisition workforce don't understand how to do the evaluations properly, so it's rife with errors, but it also becomes more of a critical factor nowadays for companies. You just can't win on the merit, technical merit, past performance or experience that you've had doing work for that customer in the past.
What advice do you give to clients about bid protest litigation?
Well, price can be a varying weighted factor in procurement, so it's hard to give a bottom line piece of advice on how to consider this. We typically have to advise companies to understand how price is a factor in a procurement upfront. So when they are reading a solicitation, they see what weight is going to be given and then know to reach out to us to help challenge some of them if they are about the terms of a solicitation, you actually have to initiate litigation before the proposals go in. And, so, if a company makes a mistake, it doesn't appreciate an issue, they've lost the opportunity to challenge it.
What trends are you seeing with corrective action in bid protests?
One of the things that we have seen on the rise over the past several years is that after a bid protest is filed, the agency has a chance to look at the arguments, admit that there was a mistake that was made, and go back and fix it. What we've seen now more is, yes, agencies are going and taking that step before waiting for a decision to fix a problem, but it doesn't mean the case goes away. Essentially, it is a delay, and you have the case come back, you have to re-litigate oftentimes over new issues because they've fixed problems previously identified, and they may create new issues.
What advice do you give companies about this sort of corrective action?
It's a win for a protestor initially because it means that the agency will have another chance at an award. But we have to tell them to be prepared to be in for the long haul. And, you can also see the writing on the wall from the agency. You go through this several times. At the end of the day, some of our clients will come to recognize that I can fight, and fight, and fight, but I know now what the agency wants: what's the primary factor driving their decision or if there is a company that they truly want to be the performing entity on that contract.
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