Bid protests, while unpopular, benefit the process

In a recent published article, Steven Kelman, former administrator of the Office
of Federal Procurement Policy, applauded the shrinking number of bid protests. This may be
reason to celebrate, but not for the reasons Kelman cited.

When Kelman was OFPP administrator, he worked assiduously for the elimination of bid
protests, helping to end the bid protest jurisdiction of the General Services
Administration Board of Contract Appeals.

You can make your own judgment about whether, as a lawyer representing vendors, I am
biased, but first give me a fair hearing.

Kelman suggests that, at one time, all large procurements were protested. This is
nonsense. When procurements were protested, they often revealed ineptitude and unfairness.
Then and now, an agency that does a competent and thorough job has little to fear from the
protest process.

Protests are certainly fewer these days. Perhaps some agencies have improved their
acquisition systems in response to the protests they lost.

Another reason for a reduction in protests is surely the improved rules for
debriefings. Earlier, some agencies thought the best way to forestall protests was to
stonewall at the debriefing. The strategy often backfired because the victim assumed the
agency was concealing some horrible defect. Many a protest was brought and then abandoned
when the veil of secrecy proved to hide nothing damaging. Under the new rules, more
disclosure has meant fewer protests.

Kelman’s oddest assertion is that agencies used to choose the wrong vendor,
thinking their exhaustive documentation would survive protest, instead of the right vendor
on more subjective grounds. In a rational source selection, the decision that can be
documented is the right one. And the comment about subjectivity is a red herring. The real
distinction is between judgments that are supported by reasons relevant to the selection
criteria. Such judgments have always prevailed in protests.

But what is truly alarming is Kelman’s glowing approval of a
bidder—let’s call it XYZ—that announced before the source selection that it
would not file a protest. The agency didn’t ask for this apparently gratuitous
promise—such a request would have amounted to the government forcing a citizen to
waive the legal right to petition for redress of grievances.

If the agency didn’t ask for a no-protest promise, why did XYZ make an advance
announcement of its pledge? Why not simply refrain from filing a protest if it lost and
keep its intentions private?

Let’s assume that XYZ was acting rationally and that it wanted to win the
contract. If that’s so, then XYZ must have been seeking a competitive advantage by
promising not to protest, hoping to curry favor with the evaluators. Not protesting,
however, isn’t one of the evaluation criteria listed in the solicitation. Therefore,
the promise cannot be used to discriminate between bidders.

Thus, XYZ’s promise became an invitation to government officials to violate
procurement regulations—hardly laudable conduct. Ironically, if an evaluator thought
the matter through, he or she would have realized that the best way to avoid a protest
would be to award the contract to XYZ’s competitor.

Of course, the protest process isn’t perfect. It would be foolish to say that
there haven’t been some bad decisions, and some protests that probably shouldn’t
have gone past discovery. But neither are protests an unmitigated disaster. They have a
place in a public procurement process.

In a recent court opinion, Chief Judge Loren Smith of the Court of Federal Claims
reminds us why there are protests, so I’ll close with a quote from him:

“The purpose of the bid protest scheme is twofold. First, it is designed to
benefit the taxpayers, and hence the government, by making government procurement both
more fair and more efficient. This is so in various ways. If contractors have an honest
and fair system, they will be more willing to deal with the government at a lower price.
Also, if the government acts honestly and rationally, the government and the taxpayers
will get the best deal for their money and needs. … The other basic purpose is to
benefit those who do business with the government. This is partially based on basic
fairness or justice. People, whether citizens, foreigners or even contractors, should be
treated fairly. It is also based on sound business practice. It is critical to deal with
vendors, suppliers, or customers properly. Otherwise, you may encourage them to treat you
badly.” 

Joseph J. Petrillo is an attorney with the Washington law firm of Petrillo &
Powell, PLLC. E-mail him at jpetrillo@counsel.com.