Third-Party Protest Regime and GAO Protest Statistics: DoD vs. Other Federal Agencies

Abstract

Abstract : The independent third-party protest regime began 83 years ago in 1926 when the General Accounting Office, the Government Accountability Office's (GAO) predecessor, began deciding federal contract award protests. Thirty years later in 1956, the Court of Claims established the judiciary's protest jurisdiction in Heyer Products Co. v. United States. Currently, the two primary third-party protest forums include the GAO and the Court of Federal Claims (COFC). Most disappointed offerors' file their protests with the GAO which considers approximately 1,300-1,400 protests annually. The advantages generally cited for filing with the GAO include efficiency, procurement law expertise, and low cost. A number of recent high profile federal contract protests, including the Air Force's KC-X program, as well as an increase in the number of protests annually, have brought both the Department of Defense (DoD) procurement process and the GAO protest system under increased scrutiny. The Duncan Hunter National Defense Authorization Act of 2009 requires the GAO to review protests over the past five years to determine if frivolous protests represent a significant problem and recommend any reforms for improving the system. A review of the quantitative data over the past five years indicates the DoD experienced protest, dismissal, and sustainment rates similar to, if not more favorable than, those of other federal agencies. However, the high dismissal and low sustainment rates for both the DoD and other federal agencies may indicate a need to reform the GAO protest rules and procedures to discourage the filing of frivolous protests. Three possible reform initiatives include revising the requirement to stay a contract award upon the filing of a protest with the GAO, assessing a financial penalty, and tracking a contractor's protest history.