RAND Report Concludes That Protests of Department of Defense Procurements Are Rare, Effective
Last week, the RAND Corporation published a report entitled “Assessing Bid Protests of U.S. Department of Defense Procurements: Identifying Issues, Trends, And Drivers.” In it, RAND analyzed the prevalence and impact of bid protests of U.S. Department of Defense (“DoD”) acquisitions, and concluded that DoD bid protests are both “exceedingly uncommon” and, on the whole, effective in prompting DoD to take remedial actions to address issues identified in the protests. The report, which was commissioned by Congress in Section 885 of the 2017 National Defense Authorization Act (“NDAA”) Pub. L. No. 114-238, is expected to be a driver of changes to the protest process, and includes several recommendations counseling against significant changes that appear to be favorable to protesters.
In conducting its study, RAND undertook a quantitative examination of the DoD bid protest landscape and collected data and case histories from both the Government Accountability Office (“GAO”) and the Court of Federal Claims. It made two significant findings:
First, protests are rare. RAND found that “bid protests are exceedingly uncommon for DoD procurements” and that GAO time trend data shows that protest activity was “much higher in the late 1980s and early 1990s than it is today.” RAND did note a “significant upward trend” in GAO protest activity between FY 2008 and FY 2016 — during that period the number of overall protests (both DoD and non-DoD), has approximately doubled. Even with that uptick, however, RAND found that the “overall percentage of contracts protested is very small — less than 0.3 percent.”
Second, protests work. Even with the increase in filings since FY 2008, RAND concluded GAO bid protests remain an effective means of securing some form of corrective action. Between FY 2008 and FY 2016, RAND found protests had an “effectiveness rate” of about 40%, meaning that 40% of all protests resulted in either a sustain by GAO or voluntary corrective action by DoD. As such, RAND found that “roughly 40 percent of all protest actions result in some change to the initial procurement decision or terms.” RAND noted that this effectiveness rate, which has remained steady with a slight increase over time, “refutes the claim that meritless (some use the term frivolous) protests account for those increases [in the number of protests filed since FY 2008].”
In light of its findings, RAND offered several recommendations regarding reforms to the protest process that appear favorable to protesters. First, RAND echoed many commentators by recommending that the DoD improve the quality of post-award debriefings. (Consistent with this recommendation, the 2018 NDAA directs the Secretary of Defense to provide “enhanced” post-award debriefings.)
RAND also advised that Congress use caution in considering a reduction of GAO’s 100-day timeline for deciding bid protests, which RAND recognized allows GAO to “smooth the workload” around protests. This admonition cuts against a proposed reduction of the GAO’s decision timeline from 100 to 65 days, which was included in the version of the 2018 NDAA passed by the Senate, but did not make it into the final bill.
RAND was similarly skeptical towards proposals to place additional restrictions on protests of task-orders. The 2017 NDAA raised the threshold for DoD task-order protests from $10 million to $25 million, and, as previously reported on Inside Government Contracts, GAO jurisdiction over civilian task-order protests was allowed to lapse temporarily at the beginning of FY 2017. RAND concluded that removing or tightening task-order jurisdiction would not address the issue of ineffective or meritless protests, as task-order protests actually tended to be more effective than other types of protests.
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The RAND report contains several interesting conclusions. Notably, RAND’s data-driven analysis cuts against criticism that DoD’s procurement system is being overwhelmed by meritless bid protests. In addition, the RAND report suggests that certain proposed reforms for the bid protest system — such as a faster decision timeline at the GAO — may not be necessary, and in fact could harm a currently well-functioning system. It remains to be seen what, if anything, Congress will do with RAND’s recommendations as it considers further protest reforms.
 That effectiveness rate has been even higher in recent years. In its annual report to Congress for FY 2017, GAO reported that the effectiveness rate for all protests has risen nearly every year since 2012, and in 2017, was 47%.