On November 1, 2022, the U.S. Government Accountability Office (“GAO”) published its Annual Report to Congress, which contains the statistics for bid protests filed at GAO in Fiscal Year 2022. We have highlighted below several items worth noting from our review of the GAO’s report.
- Protests Filed: Notably, the number of protests filed before GAO has decreased each year since 2018, with 2022 marking a 12% decline from 2021 and a 37% decline from 2018. Prior to 2018, the number of protests filed had been steadily increasing, with the number reaching almost 2,800 in FY 2016 – nearly twice the number filed in FY 2022. However, we continue see a decline in the number of protests actually filed, with 2022 showing numbers similar to those in 2008 (1,652 protests).
- Sustain Rate Decreases, but Effectiveness Rate Increases: We see a small decrease in the rate of protests that are sustained in a written decision addressing the merits (13% in FY 2022 vs. 15% in FY 2021), but the rate has been generally consistent over the last five-year period. However, we see a continued increase in the effectiveness rate for protesters (51% in FY 2022 vs. 48% in FY 2021). The effectiveness rate indicates that protesters obtained some form of relief from the agency, either through a written decision sustaining the protest or voluntary corrective action from the agency. Accordingly, in FY 2022, more than half of all protests resulted in some form of relief for the protester.
- ADR Success Rate: Interestingly, we also see a fairly significant increase in Alternative Dispute Resolution (“ADR”) success (92% in FY 2022 vs. 84% in FY 2021). This means that more cases were resolved without a formal written GAO decision after an Outcome Determination by the GAO Hearing Officer. In our own bid protest practice, we have noticed an increase in agencies seeking ADR – a trend we expect to continue in the foreseeable future. ADR can be beneficial in resolving protests sooner and avoiding source selection information and prices from being published in written GAO decisions. However, because most, if not all, protests are under a protective order, the protester usually does not get to hear GAO’s full analysis given during the ADR process – nor do future protesters have the opportunity to rely on GAO’s analysis in their future protests. This process can leave some protesters without a fully satisfactory resolution to their protest, even if they receive some form of relief.
- Most Prevalent Grounds for Sustaining Protests: GAO also included in its report the three most prevalent reasons for sustaining protests during FY 2022: (1) unreasonable technical evaluation, (2) flawed selection decision, and (3) flawed solicitation. Though the reasons vary somewhat each year, they are fairly consistent. For example, in Fiscal Year 2021, the most prevalent reasons were unreasonable technical evaluations, flawed discussions, unreasonable cost/price evaluations, and unequal treatment. In Fiscal Year 2020, the reasons were unreasonable technical evaluation, flawed solicitation, unreasonable cost/price evaluation, and unreasonable past performance evaluation. In Fiscal Year 2019 the reasons were unreasonable technical evaluation, inadequate record documentation, flawed selection decision, unequal treatment of offerors, and unreasonable cost or price evaluation. In Fiscal Year 2018, the reasons were unreasonable technical evaluation, unreasonable cost or price evaluation, and flawed selection decision. Insofar as these bases are all common grounds of protests, the prevalence of the sustains on these bases does not provide a potential protester with much insight as to the best arguments to raise.
- Failure to Follow Recommendation: GAO noted one protest where the agency did not implement GAO’s recommendation: Northrop Grumman Systems Corporation – Mission Systems, B-419560.6, Aug. 18, 2021, 2021 CPD ¶ 330. GAO explained this was the first time an Agency did not implement GAO’s recommendation since 2015. GAO explained, however, that after GAO issued its decision, the protester filed a protest at the United States Court of Federal Clams and, as a result of the Court’s oral opinion, the agency agreed to take corrective action, which was consistent with GAO’s earlier recommendation.
When viewed across the past five years, FY 2022 is notable in that is shows a continuing decline in the number of protests filed at GAO. However, the sustain rate and effectiveness rate are roughly consistent with numbers from the past five years. Potential protesters should consider that approximately half of all protests in the last three years resulted in some form of relief for the protester – a promising statistic for any future protester. Finally, it will be interesting to see if the increase in ADR success incentivizes GAO to conduct more Outcome Determinations in years to come. Either way, the statistics demonstrate that bid protests continue to be a viable, effective option for government contractors.