From the U.S. Government Accountability Office, www.gao.gov

Transcript for: GAO’s Bid Protest Process

Description: Audio interview by GAO staff with Ralph White, Managing
Associate General Counsel, Procurement Law

Released: June 2015

[ Background Music ]

[ Narrator: ] Welcome to GAO's Watchdog Report, your source for news and
information from the U.S. Government Accountability Office. It's June
2015. In addition to GAO's regular audit work, the agency also handles
protests from companies that object to how a federal contract was
awarded. Last fiscal year, GAO heard and decided more than 2,000 such
bid protest cases. Ralph White, GAO's Managing Associate General Counsel
for Procurement Law, leads the agency's handling of bid protests. GAO's
Jacques Arsenault sat down with Ralph to learn more.

[ Jacques Arsenault: ] What is a bid protest? And how does the bid
protest process work?

[ Ralph White: ] Well, actually a bid protest is a challenge to the
award of a contract or the solicitation for the award of a contract
filed by a party who has standing to bring that kind of case meaning
mostly they have to have a direct economic interest in the outcome. It
can't just be a public citizen interested in how the government is
spending money. The GAO bid protest process is actually authorized by
statute now, but it didn't begin that way. The statute requires that the
Comptroller General provide for the inexpensive and expeditious
resolution of protest, and it actually does something very unique in
government. It actually sets out a very finely balanced set of
interests. There are really three interests. That is there is a very
limited time for filing a bid protest. When a bid protest is filed,
there's automatic suspension of contract performance when those time
frames are met. And that is coupled with an automatic stop work order
required by law for the agency that’s doing the contracting. But they
are also given authority, in that same statute, to override that
stop-work order for urgency or the best interest of the government. And
then the third thing is, in addition to providing this to contractors
and stopping the work, GAO is then required to issue a decision in no
longer than 100 calendar days from the time the protest is filed.

[ Jacques Arsenault: ] So, this work is pretty different from a lot of
GAO's other audit and evaluation work. Can you talk about why GAO
handles bid protests?

[ Ralph White: ] One of the things about the U.S. government is we do
not have, for the most part, much political involvement in the award of
federal contracts. We have agreed to principles of competition. We have
agreed to rely on the open market forces for the placement of federal
contracts. And so, you know, having GAO be an arbiter of that dispute in
some ways serves the Congress in that they can trust GAO to go in and
without regard to the political interests involved, without regard to
what state is involved, simply review the competition and come to a
conclusion about whether or not those contracts were awarded in a way
that is consistent with federal procurement law. And that mostly
translates to: did the agency follow the procurement laws that apply,
and did the agency treat offers fairly by following the terms of the
solicitation that they issued to guide the competition?

[ Jacques Arsenault: ] And there clearly seems to be a lot of demand for
these bid protest cases. In fact, GAO has heard and decided over 2,000
cases a year over the last 5 years. What are some of the reasons for
such a high number of protests?

[ Ralph White: ] Well, I'm glad you asked the question. I'm glad you
asked it in that way. Actually, the number is not really that high when
looked at over the 30-year time since the passage of the Competition Act
in 1984. We had higher numbers than these. In fact, we had numbers that
approached 3,500 from the late '80s into the mid-'90s. There was a big
change in 1994 that lasted until 2008, so about 14 years, in which
Congress experimented with the award of multiple award contracts on
building schedules. They're called government wide acquisition
contracts. And you pre-establish the contracts, and then you have a
mini-competition amongst the contracts holders, and you place task
orders for those. From 1994 to 2008, no one in government, not GAO and
not the federal courts, had jurisdiction to hear a challenge to the
award of a task order. And what we saw is that that led to some
problems. In fact, our audit teams, in particular our acquisition and
sourcing management team, documented real problems that were coming out
of the fact that there was no oversight or scrutiny of the award of task
orders is that a task order was used under a multiple award contract to
purchase interrogators for use at the Abu Ghraib Prison. And they were
actually purchased under an IT contract. The cases are now back up
closer to where they were in the 1993, '94 time period. We had 2,500 bid
protests filed last year.

[ Jacques Arsenault: ] And can you talk about a few noteworthy examples
of bid protests decisions that GAO has issued recently?

[ Ralph White: ] So, there was extensive media coverage of a protest
filed by Sierra Nevada last year in which Sierra Nevada challenged the
award by NASA of two contracts, one to Boeing and one to SpaceX to
develop a commercial crew vehicle to go back and forth to the Space
Station so that we no longer have to rely on the Russians to carry U.S.
astronauts to the Space Station. There was a lot of coverage of it in
part because of the dollar value of those contracts, the high visibility
of the commercial crew program for NASA, and the fact, truthfully, that
these were a tremendous amount of jobs and aerospace spending that was
going to happen in one of three states. So, that's a big one. But then
there are a couple of others, right now there are two GAO bid protest
cases that are pending for cert in front of the Supreme Court. One of
them, a very small dollar value case, it started with a case called
Aldevra. It followed with a case called Kingdomware. But they involved
the service disabled veteran-owned small business set aside that
specifically exists for VA procurements. The first case Aldevra I think
involved a $600 piece of kitchen equipment. A procurement of that size
is not really going to capture the interest of the media generally, but
it had an important precedential value for interpreting that specific VA
statute involving set asides for businesses owned by veterans who became
disabled in the course of their service. In the 30 years since we have
had jurisdiction to hear protests, I cannot recall a time in which bid
protest cases are pending at the Supreme Court. That is a, or the
petition for cert is pending. But that is evidence of a level of
contentiousness in society right now perhaps, but about the awarded
contracts and how much businesses value the opportunity to have a
contract with the U.S. government.

[ Background Music ]

[ Narrator: ] To learn more, visit GAO.gov and be sure to tune in to the
next episode of GAO's Watchdog Report for more from the congressional
watchdog, the U.S. Government Accountability Office.