Does It Ever Payoff to Protest a Government Bid/Contract Award?

Austin, TX

The value of protests tends to be a point of contention, especially when it comes to government contracts. If a party interested in a government contract believes that an agency has violated procurement law or regulation in a solicitation for goods or services, the award of a contract, or the intended award of a contract, it has the right to challenge the decision through a formal bid protest. But, does it ever payoff (for vendors) to conduct such protest? That depends on your end goal.

The Purpose of Bid Protests

It is important to remember that the bid protest process is intended to be a checks and balances system. The ultimate goal is to ensure that government procurements are completed using the highest level of integrity – within the rules, regulations and statutes set forth for taxpayer-purchased goods and services. As such, the most effective bid protests are those that are legally sufficient and procedurally sound. Yes, you can use bid protests as an opportunity to “express dissatisfaction with the solicitation or award process”, or even to “complain about losing the competitive process.” However, it is going to be difficult to change a bid outcome if you claim agency bias against your company without evidence to support the objection – no matter how disappointed you may be in the contract award decision. 

The Definition of “Fair”

The word “fairness” comes up quite a bit during vendor solicitation or contract award objections. In fact, the majority of protests are submitted due to concerns of prejudice against certain contractors or favoritism towards others. But, they often lack hard, legally-acceptable evidence to support such allegations. Does that mean that such protests are not viable? Not necessarily.

  As many state procurement officials noted in a NASPO-sponsored survey a few years back, bid protests provide “a fair process and a real check on flawed or anticompetitive awards.” Even if the protest outcome does not equate to a change in award decision, the process requires agencies to honestly evaluate their competitive processes and, many times, make improvements to prevent ambiguity or missteps the next time. In other words, bid protests often affect real, and positive change no matter the outcome.

Will My Protest Make a Difference?

The impact of your protest depends on whether or not you can prove that the government agency clearly legally violated the rules set forth for the procurement process or used unfair mechanisms for evaluating bid proposals. Remember, contract awards made using a loophole may still be legally binding and “fair” awards, even though they were based on a technicality. At the same time, vague solicitations may still be viable per minimal government buying standards. In other words, it is important that you can demonstrate agency predilection for another business, or process breakdown, when initiating a protest – especially if your hope is that the contract will be re-awarded to your company. That requires you to thoroughly understand the procurement process and policies.

The best way to confirm the agency’s justification for its solicitation structure or contract award decision is to participate in the standard post-award debriefing. This allows you to inquire about who won and why. It also allows you to understand why they scored your proposal a certain way in comparison. It may be that you provided the lowest price but the agency gave more weight to past performance or proven technical expertise.

7 Things to Consider Before You Initiate a Bid Protest:

  • How much time and resources will it take to prepare a protest? The protest process varies from the federal, state and local government levels. There are even varying requirements between individual agencies. Some allow for oral protests, most require written documentation. There are often cases where protests proceed into hearings, in which case the process can take over a year to resolve. Just be prepared to commit the resources to submit a detailed challenge and see the process through to completion.
  • How much legal support will you require? You should always seek legal counsel to inform your decision and ensure you are taking the proper steps to achieve the desired outcome should you submit a bid protest. Plus, legal counsel can help you protect yourself from potential repercussions for the protest.
  • Will the agency’s legal support costs be passed along to you in some capacity? Some government agencies are forced to absorb their costs to participate in bid protest arbitration, while some state regulations dictate that costs be paid by the unsuccessful party.
  • Will you have to pay a government fee if you don’t win the protest? Again, some agencies allow for vendors to protest a bid at no cost to the vendor. However, given the rising number of legally unsound protests, some agencies are beginning to require a bid protest fee from vendors that unsuccessfully protest. The government’s goal is to minimize frivolous protests or those initiated simply for the sake of trying to hurt the agency or winning vendor.
  • Will the solicitation proceed while the protest is under review? While this will depend on agency-specific protest procedures, just know that a protest doesn’t always stop a contract – or project – from starting on time. At the same time, protests could delay project starts, so be cognizant of the impact your actions will have on agency initiatives, especially if the delay could hinder the ability to deliver valuable services or infrastructure to the community.
  • What do you stand to benefit if you win the protest? Make sure the contract’s value exceeds the cost of resources required to initiate and manage the protest process. Alternatively, make sure that you can build a case that warrants a procedural change related government procurement solicitations or contract awards. If you just want to voice frustration, but are unable to suggest a valid solution, then it may be best to express your opinion in the debrief. 
  • Could frequent protests potentially influence an agency’s consideration of your future bids? Are there any other risks associated with launching a protest? While reputation isn’t technically one of the formal evaluation factors considered for government contract proposals, agencies are more eager to do business with companies that make their jobs easier. Reviewing frequent bid protests, which can stall contract awards and project starts, can be detrimental to many agencies dealing with tight deadlines, increasing workloads and limited resources. Protests can also cost government agencies (and you) a lot of money, which is never welcome. In other words, just because there is an opportunity to challenge a contract award does not mean that you always should. Take the time to weight the very real risks vs. potential rewards.

Final Thoughts

Take advantage of government transparency requirements and request the feedback you are entitled to as a vendor participating in the government bid – and bid protest – process. Even if the outcome is not in your favor, the insights you receive will help you better understand the government procurement process and, thus, prepare better bid responses in the future.

If you’d like more information on bid protests, there are resources available through the GAO (federal level), NASPO (state level) and NIGP (local level). You can also consult with legal advisors who specialize in government contracting matters.