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By Sam Skolnik
Sept. 14 — Winning bid protests before the Government Accountability Office (GAO) has never been more important to government contractors.
The dollar value of those protests is skyrocketing and raising the stakes. From fiscal 2011 to 2015, the number of bid protests valued at more than $1 billion more than doubled, from 24 to 50, Ralph White, the GAO’s managing associate general counsel for procurement law, told Bloomberg BNA. During the same time frame, the number of protests valued between $100 million and $1 billion jumped by 59 percent, from 171 to 272, White told Bloomberg BNA.
These numbers mean that White is a VIP to federal contractors, their lawyers and consultants, and agency procurement officials. His office has overseen high-value protests involving a wide range of big contractors such as Boeing Co., Lockheed Martin Corp., IBM Corp. and Booz Allen Hamilton Inc.
As this year’s National Defense Authorization Act (NDAA) gets hashed out in conference committee — thick with several bid protest-related provisions — members of Congress have also been paying attention to White, who sat down with Bloomberg BNA recently to talk about a range of issues.
White worked as a Senate staffer for six years, including a stint on the Senate Armed Services Committee. From there, he jumped to Fried, Frank, Harris, Shriver & Jacobson LLP, where he practiced government contracts law from 1985 to 1989. He’s been with the GAO since then and has worked on bid protest cases almost all of that time.
White assumed his current post — where he oversees a staff of 30 attorneys and approves each decision before it’s issued — in 2010. He was joined by a second managing associate general counsel, Kenneth Patton, in 2015. White and Patton now run the GAO’s bid protest unit together.
Contractors filed 2,639 protests to the GAO in fiscal 2015, the agency reported — a number that has steadily risen over the past decade. The number of cases reached its peak in 1993 with 3,377 protests. It dropped after passage of a 1994 law that barred the GAO and the courts from hearing task order-related bid protests. But the numbers began to rise again in 2008, when Congress decided the GAO had jurisdiction over task order protests.
White noted that his unit’s decisions often have real-world consequences, affecting real people — most notably their jobs. Those consequences weigh on him, he said.
These are cases, he said, where “business is moving from one place to another. I try not think about this too much.”
White’s team is now busy designing a new electronic filing system for bid protest cases. For the first time, the GAO will charge a $350 fee to weigh bid protests, designed to offset the implementation and maintenance of the new system.
A Q&A with White follows:
Can you put the rising dollar value of bid protest cases in some perspective?
When I first began writing bid protest [decisions] for GAO in 1989, through the 1990s, you often were aware as a writer if you had a procurement that was valued at over $100 million. There is nothing very unique anymore about a procurement valued at over $100 million. I’m pretty certain that every one of the 30 attorneys in our shop right now has a protest worth over $100 million.
I almost don’t recall seeing a procurement valued at more than a billion dollars in the [1990s], and now we can see that there have been plenty.
The National Defense Authorization Act this year contains ‘loser-pays’ language in the Senate’s version of the bill. Your thoughts?
There are two different provisions in the Senate bill. What you may call ‘loser-pays’ is just for Department of Defense protests where the company has more than $100 million in receipts, and the provision is that if a company in that class files a bid protest and loses, then they have to pay the cost of the protest process to GAO.
Our concern about that, being GAO, is that we care a great deal about our perception for integrity and accountability. So the idea that GAO would get more money for a certain outcome would create an apparent conflict of interest for us, and that, we feel, is not a very healthy situation. In other words, you don’t want to create an apparent conflict of interest whereby we can increase our funding by denying more protests. What we would not like to see is anything [that] raises a concern about our integrity in deciding cases.
The second provision in the Senate bill is a little more complex. It’s targeted at incumbents, those companies currently performing the work ... . In some circumstances, GAO would get money for a certain outcome. And we don’t think that’s healthy for the same reason.
The NDAA also contains two provisions that would affect task order jurisdiction. Where have the House and Senate bills been at odds?
The Senate bill would end jurisdiction over DOD task orders of any value, provided the DOD names an ombudsman who then certifies that the ombudsman has a process in place to review task order protests, or disputes about task orders. This was the scheme that enacted in 1994, and it did not work. So far as I know, there was never any formalized review of task order disputes by a DOD ombudsman.
The House provision does the exact opposite. Civilian agency task order jurisdiction will expire later this month, unless Congress passes a new law either making it permanent or extending it. The House bill has a provision that makes permanent the expiring jurisdiction that exists for civilian agency task orders.
You have the House and Senate going two different ways. The Senate would end it for DOD, and the House would make it permanent for civilian agencies. That would be probably an unhealthy result for the federal procurement system, because the one thing that I think most people agree on is that businesses that deal with the government really don’t want to learn separate rules based on whether they’re dealing with a task order that’s coming out of DOD or out of [the Department of Homeland Security]. The healthier thing for the procurement system would be for us to have one approach.
A Senate Armed Services Committee aide said recently that losing bidders these days often are protesting cases based on the dollar amounts at stake, as opposed to the actual merits of their claims. Is this a fair conclusion?
I’ve heard those concerns, as well. If I could shorthand it: They are concerned that these companies have decided that they have a fiduciary responsibility to pursue a protest if they’ve lost one. Part of what we explained in our 2009 report is that we can’t know what is in someone’s head. All we can know is what they raise to us — and they have to have standing, they have to be on time, and they have to state a valid basis based on what happened in the procurement.
They just can’t come in and say, like in a best-value procurement, “Well, we came in at a lower price than the company you selected.” The answer to that is, “You always knew that. This is a best-value procurement. Tell us something specific about what was done wrong.” Just saying you were lower in price — we’re not even going to develop that.
Doesn’t this go to another area of concern from some in Congress — the allegation that too many frivolous protests are being filed?
It’s difficult for us to tell. I don’t know what [protestors’] motives are, but I can see what their arguments are, and if their arguments state a valid basis for a disagreement, then it’s hard for us to say that they’re acting improperly by raising them.
The other thing you will hear some members [of Congress] say is, “Every procurement is protested now.” [Former Office of Federal Procurement Policy Administrator] Dan Gordon published a paper … and he came up with a number that is something like one-half of 1 percent of federal procurements are protested. I mean it’s a huge number of procurements. But let’s not kid ourselves: I think that as the dollar value of the procurement rises, there’s a higher likelihood of a protest.
What is the status of the $350 filing fee for GAO protests, and the implementation of the new Electronic Protest Docketing System?
It’s very close at hand. It’s hard to know exactly whether there will be some impact on the number of protest filings. Clearly, the companies that are fighting over a contract worth $1 billion or more won’t be slowed by $350. For most businesses, it has not been seen as a concern. We reached out to small business groups last summer and the year before to get their feedback. And many of them were also concerned about frivolous protests. Their thought was that if small businesses are competing for an $8 million contract and they think they’ve been treated unfairly, $350 to have a protest heard is not beyond the pale.
Currently, protests are filed in paper form and they almost all come in by e-mail, in documents that are attached to e-mails. The case is uploaded to an electronic docketing system and it goes forward electronically. Looking forward, the whole case will get initiated electronically. The system could well be up and running by the end of the end of 2016.
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