This is the accessible text file for GAO report number GAO-03-427R 
entitled 'GAO Bid Protest Annual Report to the Congress for Fiscal 
Year 2002' which was released on January 29, 2003.

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United States General Accounting Office: 
Washington, DC 20548: 

GAO-03-427R: 

B-158766: 

January 29, 2003: 

The Honorable J. Dennis Hastert: 
Speaker of the House of Representatives: 

Dear Mr. Speaker: 

This letter responds to the requirements of the Competition in 
Contracting Act of 1984, 31 U.S.C.  3554(e) (2000), that the 
Comptroller General report to Congress each instance in which a 
federal agency did not fully implement a recommendation made by our 
Office in connection with a bid protest decided the prior fiscal year. 
There was one such occurrence during fiscal year 2002.

The occurrence concerned a bid protest filed in our Office by Rockwell 
Electronic Commerce Corporation challenging the Social Security 
Administration's (SSA) award of a contract to MCI WorldCom 
Communications, Inc. for network-based call answering services; the 
protest was the subject of a series of decisions by our Office. On 
March 5, 2002 we reported the matter to Congress pursuant to 31 U.S.C. 
 3554(e)(1), which requires our Office to report any case in which a 
federal agency fails to fully implement a recommendation of the 
Comptroller General contained in a protest decision concerning the 
award of a federal contract. Enclosed is a copy of that report, which 
describes the protest decisions and the circumstances of the SSA's 
failure to implement our recommendation. The following is a brief 
summary.

In our first decision, issued on December 14, 2000, we sustained 
Rockwell's protest on the basis that MCI's proposal had failed to 
identify, and the agency had failed to evaluate, certain contract 
costs that would be incurred under MCI's proposal, as required by the 
solicitation. We recommended that the agency reopen the competition, 
amend the solicitation as appropriate, request and evaluate revised 
proposals, and make an award decision consistent with the terms of the 
RFP and our decision. We also recommended that Rockwell be reimbursed 
the costs of filing and pursuing its protest, including reasonable 
attorneys' fees. We denied SSA's and MCI's requests for 
reconsideration on April 19, 2001.

Following the reconsideration decision, SSA allowed only MCI to revise 
its proposal, and limited revisions to the identification of the 
previously unstated costs. Not surprisingly, given the limited nature 
of the "corrective action," MCI's proposal was again selected for 
award. Rockwell then protested this corrective action as being 
inconsistent with procurement law and regulation, and our decision; on 
August 30, 2001, we sustained Rockwell's second protest, reiterating 
the recommendation stated in our first decision and further defining, 
by example, appropriate corrective action. We also recommended that 
Rockwell be reimbursed the costs of filing and pursuing its second 
protest. SSA again requested reconsideration and, on September 20, we 
denied the request.

By letter of November 5, 2001, SSA notified our Office that it would 
not follow our recommendations. We also were advised that the agency 
had declined to reimburse Rockwell's costs of filing and pursuing the 
second protest, although SSA had reimbursed Rockwell's costs of filing 
and pursuing the first protest. In response to a subsequent request 
from Rockwell, we modified our prior decisions to recommend that SSA 
also reimburse Rockwell's proposal preparation costs.

In our March 5 report, we recommended, pursuant to 31 U.S.C.  
3554(e)(1)(B), that Congress consider an inquiry into SSA's failure to 
fully and to promptly implement our December 2000 recommendation. We 
stated that, in our view, the inquiry should also examine the basis 
for the agency's determination to continue performance by MCI 
notwithstanding the protest and thereby incur almost half of the 
potential contract cost of a service contract within the first year of 
a contract with a potential term of over 7 years. We recommended 
that, in any event, Congress take such actions as necessary to ensure 
that Rockwell's costs of pursuing this matter using bid protest 
procedures, and its costs of preparing a proposal, are reimbursed.

With respect to the remainder of fiscal year 2002 bid protest 
activity, during the fiscal year we received 1,139 protests (including 
38 cost claims) and 65 requests for reconsideration, for a total of 
1,204 cases. We closed 1,133 cases: 1,072 protests (including 40 cost 
claims) and 61 requests for reconsideration. Enclosed for your 
information are statistics concerning suspensions of contract awards 
and performance as a result of bid protests.

A copy of this report, with the enclosure, is being furnished to the 
Chairman and Ranking Minority Member of the House Committee on 
Government Reform. A similar report is being furnished to the 
President of the Senate. 

Sincerely yours, 

Signed by: 

Anthony H. Gamboa: 
General Counsel: 

Enclosure: 

Suspension of Award/Performance Data: 

Background: 

CICA contains several provisions whose purpose is to enhance the 
likelihood that protests can be decided before contract performance 
reaches a stage at which corrective action is effectively precluded. 
Where an agency is notified of a protest before award, CICA precludes 
an award unless the head of the procuring activity makes certain 
findings justifying the award. In cases where notice is received 
within 10 days following the date of award or within 5 days after a 
required debriefing, CICA requires the suspension of performance 
unless the head of the procuring activity makes certain other findings 
justifying the continuance of performance despite the protest. 

Data: 

The following tables present data regarding the number of contracts 
awarded after a protest was filed (table A), the number of protests in 
table A in which GAO sustained the protest (table B), the number of 
contracts in which performance was not suspended following a protest 
(table C), and the number of cases sustained by GAO in which 
performance was not suspended (table D). 

Table A: Protests Filed Before Award- Contracts Awarded After Protest 
Filing: 

Defense Agencies: 0; 
Civilian Agencies: 6. 

[End of table] 

Table B: Protests Filed Before Award- Protests Sustained Where 
Contracts Awarded After Protest Filing: 

Defense Agencies: 0; 
Civilian Agencies: 0. 

[End of table] 

Table C: Protests Filed After Award- Contracts in Which Performance 
Was Continued: 

Where agency determined that urgency justified continued performance: 
Defense Agencies: 24; 
Civilian Agencies: 18. 
	
Where agency found that continued performance was in Government's best 
interest: 
Defense Agencies: 7; 
Civilian Agencies: 16. 

[End of table] 
		
Table D: Protests Filed After Award- Protests Sustained Where 
Performance Was Continued: 

Where agency determined that urgency justified continued performance: 	
Defense Agencies: 0; 
Civilian Agencies: 2. 
	
Where agency found that	continued performance was in Government's best 
interest: 
Defense Agencies: 3; 
Civilian Agencies: 3. 

[End of table] 

[End of enclosure] 

[End of report]