Highly Anticipated Report on Bid Protests is Finally Here!RAND Corporation recently issued its much-anticipated report on the prevalence and impact of bid protests. The report, which was issued at the direction of Congress, contains a plethora of important—and interesting—findings, including:

  • Despite a “steady increase” in bid protests filed between fiscal years 2008 and 2016, “[t]he share of contracts protested remains very small—less than 0.3 percent.”
  • A “concern” shared by federal contractors “was the quality of post-award debriefings.” According to the report, “[t]he worst debriefings were characterized as skimpy, adversarial, or evasive and failed to provide reasonable responses to relevant questions.”
  • “[S]mall protest rates per contract imply that bid protests are exceedingly uncommon for DoD procurements.”
  • “Task-order protests have a slightly higher effectiveness rate than other types of protests.”
  • “The stability of the bid protest effectiveness rate over time—despite the increase in protest numbers—suggests that firms are not likely to protest without merit.”
  • “Cases in which legal counsel is required (i.e., a protective order was issued by GAO) have higher effectiveness and sustained rates.”

A complete copy of the report is available here. If you have any questions about any of the topics discussed in the report, please do not hesitate to contact Aron Beezley.

GAO Bid Protest Sustain Rate Remains High in FY 2017The Government Accountability Office (GAO) recently issued to Congress its annual bid protest report. Of particular note, the report states that, “[o]f the protests resolved on the merits during fiscal year 2017, [GAO] sustained 17 percent of those protests.” By comparison, in fiscal year 2016, GAO sustained 22 percent of the protests resolved on the merits, and in fiscal year 2015, GAO sustained 15 percent of the protests resolved on the merits—a percentage that is in line with GAO’s historical protest “sustain rate” of approximately 10-12 percent. Thus, while the percentage of fiscal year 2017 “sustained” protests—i.e., protests in which the GAO found in favor of the protester on the merits—is not quite as high as last year’s sustain rate, the fiscal year 2017 sustain rate is still very high by historical standards.

In addition, protesters received some relief in 47 percent of the protests (up from 46 percent in fiscal year 2016). GAO reports this statistic as an “effectiveness rate”—i.e., the percentage of protests where the protester obtained “some form of relief from the agency . . . either as a result of voluntary agency corrective action or [GAO] sustaining the protest.” In fiscal year 2017, protesters thus received some form of relief from the agency in nearly half of the protests filed with GAO.

The report states that the “most prevalent reasons” for sustaining protests during the 2017 fiscal year were (1) unreasonable technical evaluation; (2) unreasonable past performance evaluation; (3) unreasonable cost or price evaluation; (4) inadequate documentation of the record; and (5) flawed selection decision. By comparison, in fiscal year 2016 the “most prevalent reasons” for sustaining protests were (1) unreasonable technical evaluation; (2) unreasonable past performance evaluation; (3) unreasonable cost or price evaluation; and (4) flawed selection decision.

Here is a link to GAO’s fiscal year 2017 bid protest report: http://www.gao.gov/assets/690/688362.pdf. If you have any questions about GAO’s report or the bid protest process in general, please do not hesitate to contact Aron Beezley.

Colorado recently overhauled its Procurement Code. The legislature changed rules governing bid protests of state-funded procurements. We offer a user-friendly overview of the “new” Colorado bid protest process in this blog post.

Bid Protests in Colorado: Important New ChangesOverview of “New” Bid Protest Process

 

A. Who May Protest and When

The Code now grants the right to protest to “[a]ny aggrieved party,” CO ST § 24-109-102(1) (2017) instead of “[a]ny actual or prospective bidder, offeror, or contractor who is aggrieved,” CO ST § 24-109-102(1) (1996), expanding the pool of potential protesters. The revisions also enlarge the time for filing protests from seven days to ten business days after the party knows or should have known of the facts giving rise to the protest. CO ST § 24-109-102(1) (2017). However, the protest of a small purchase solicitation or award of a contract must be submitted within three business days, unless the procurement official extends the time period to ten business days.

B. Stay of Procurement

The Code now also expressly provides for the stay of procurements pending resolution of the protest.  Specifically, the revised Code states that “[a] contract resulting from a request for proposals is not awarded until any protest made in connection with the request for proposals has been resolved pursuant to section 24-109-102(2).”  CO ST § 24-109-103 (2017).  Given the Code’s specific reference to stay of procurements in connection with a , though, it appears that the stay may not apply to other types of procurements, including those issued under an invitation for bids.  It also appears that the stay under this section is only applicable to the initial protest, and not to any subsequent appeal because, as discussed below, the Code sets a $1,500,000 threshold for the stay of a contract award on appeal.

C. Decision on the Protest

The procurement official or his or her designee has the power to settle the protest. If the official chooses not to do so, then he or she must issue a written decision within ten business days after the protest was filed.  CO ST § 24-109-102(2) (2017).  The decision is to be based on and limited to a review of the material issues raised by the protester, and must set forth each factor taken into account in reaching the decision. Id. If a written decision is not issued within the required time period, then the protester may continue with the protest as if the procurement official or his or her designee had rendered an adverse decision.

D. “Appeal” Procedures

The procurement official’s decision is final and conclusive unless the aggrieved party appeals the decision to the Executive Director of the Colorado Department of Personnel and Administration or commences an action in court.  CO ST § 24-109-107. Accordingly, protesters have two options for appealing an adverse protest decision — either file an appeal with the Executive Director or file an action in the district court of the city and county of Denver. On appeal, the stay of contract award remains applicable for contracts issued under a request for proposals valued at $1,500,000 or more, unless the Executive Director or his or her designee determines that an override of the stay is in the best interest of the state. CO ST § 24-109-201(2).

An appeal to the Executive Director must be filed within ten business days of the date that a decision is mailed or otherwise furnished to the aggrieved party. CO ST § 24-109-203(1). The Executive Director must then issue a written decision within thirty business days after receipt of the appeal. CO ST § 24-109-204. An adverse decision of the Executive Director may also be appealed to the district court for the city and county of Denver.  CO ST § 24-109-205. Any such appeal must be initiated within ten business days after the decision was rendered. CO ST § 24-109-206(1).

E. Remedies

The remedies available to protesters are limited by the revised Code as follows:

If, prior to the awarding of a contract, the procurement official determines that a solicitation or the proposed award is in violation of the Code, then the solicitation or proposed award must be cancelled or revised to comply with the Code. The procurement official’s determination to do so is not subject to further administrative or judicial review.

After award, if the procurement official determines that the solicitation or award violates the Code, the procurement official may cancel or terminate such solicitation or award, and direct the governmental body to modify such solicitation or award to eliminate the violations.  Additionally, if the procurement official determines that the solicitation or award is in the best interests of the state, the procurement official may submit the recommendation to ratify the solicitation or award to the executive director or the chief procurement officer or a designee of either officer.  If the executive director or chief procurement officer elects to ratify the solicitation or award, the aggrieved party who should have been awarded the contract under the solicitation, but was not, will be entitled to its reasonable costs incurred in connection with the solicitation, including bid preparation costs. The costs, however, do not include attorney fees. The acceptance of costs by the aggrieved party constitutes a waiver of the right to appeal the determination of the executive director or the chief procurement officer.

If a protest has been appealed to the court, and upon judicial review it is determined that a solicitation or proposed award violates the Code, then the court will direct the executive director to determine whether the best interests of the state require ratification, termination, or cancellation of the solicitation, award, or contract. The executive director or his or her designee must issue a determination in writing, within ten business days of the court’s direction, and direct the purchasing agency to comply with the determination. The executive director’s determination under the direction of the district court will not be subject to further administrative or judicial appeal or review.

If the executive director ratifies a solicitation or award in violation of the Code, the aggrieved party who should have been, but was not, awarded the contract under the solicitation will be entitled to their reasonable costs incurred in connection with the solicitation, including bid preparation costs. The costs, however, do not include attorney fees.

Conclusion

If your company performs—or is thinking about bidding or proposing on—State of Colorado-funded contracts, you need to know how to protect your company from a defective solicitation or from an unreasonable evaluation and award. More specifically, you and your lawyer must be familiar with the “new” Colorado bid protest process. If you have any questions about the Colorado-unique bid protest process, please feel free to contact Aron C. Beezley or Lisa A. Markman.

Aron Beezley is licensed to practice law in Colorado and the District of Columbia, and Lisa Markman is licensed to practice law in California and the District of Columbia.