Fines for Bid Protests? No Way!

The same Air Force general who got slammed by Defense Secretary Robert Gates for his "borderline insubordination" for publicly saying the Air Force will get its desired 381 F-22s regardless of what the Pentagon leadership says, also told reporters last week that penalties should be imposed on contractors who make unwarranted protests of contract decisions.  Though protests are up a bit, sustainment rates by the GAO are generally up too--meaning the GAO thinks an increasing percentage of a larger number of protests have merit.  This may more likely reflect a failure on the part of the government side of the acquisition equation, not that of contractors.  So this may be a gauge of the continuing weakness of the Air Force's acquisition system, as well as other parts of the government.

One reader of GovExec posted the following, which we've re-posted since it addresses fraud, contracting and the revolving door--things we're interested in:

General Carlson's assertion that penalties should be levied on contractors who protest (unwarranted) is the first step towards corruption. How many Source Selection Authorities have made the correct decisions because of the fear that a protest might uncover fraud or bias if they made the decision based on their personal greed or amorist. The Generals assertion that penalties would prevent unwarranted protest is absurd. What it will do is open the door to widespread corruption and eliminate any hopes of continual oversight of the acquisition process, which by the way is so broken it has been said that to fix it would take a miracle. Protest is the only way to guarantee a fair process and any talk of penalizing the protestor because on someone's opinion that it is "unwarranted" is ridiculous. It shows the disconnect the General has between reality and his high perch of power. It makes one think of the old saying, that power corrupts and absolute power corrupts absolutely. This article depicts the depth that some will go to solidify their power and possible positions after life in the military. Do not blame the contractors for protesting when it is the source selection authorities fault for not making the criteria clear and concise up front (never has there been a source selection where all the requirements were clearly spelled out and available prior to the RFP) making it abundantly clear why the made the selection and the benefit the selection make to the government. Contractors go to great lengths to show features and benefits, but the Source Selection Authorities rarely explain the benefits of their decisions. Is it possible because the SSA's are rarely sure and their selections are made based on influence and possible future job opportunities? One wonders if the two year moratorium is enough. Would decisions be more honest if there was a lifetime ban on working for a contractor???? Mmmmm, interesting…..

Also, here's some data to chew on, showing the amount of bid protests are up, and still-rare sustainments are up too (from GAO):

Interestingly, Alternative Dispute Resolutions (ADRs) occur at about half the rate they used to.  What are ADRs?  The GAO guide to bid protests says that:

At any time during the process of developing the record, GAO, at the request of one or more of the parties or on its own initiative, may determine that the protest is suitable for alternative dispute resolution (ADR). This may take the form of either negotiation assistance, where the GAO attorney offers to assist the parties in reaching agreement on resolution of the matter, or outcome prediction, where the GAO attorney advises the parties of the attorney’s view of the likely outcome based on the record, so that the likely unsuccessful party may take appropriate action to resolve the protest.

Fixing acquisitions problems on the government's side is the best solution to the plague of bid protests that folks are complaining about nowadays.  And maybe ADRs should be utilized as much as they have been in the past--it'd be interesting to find out why they're down.  No doubt this issue will get more attention with the likely bid protests we may see soon in the wake of the Air Force's impending tanker competition.  But that conversation should be informed by data and should be well-rounded, not driven by defenders of a broken system seeking to avoid oversight of their often flawed and sometimes corrupt decisions to spend billions of our dollars.

-- Nick Schwellenbach

Comments

[James V. Tribbett]

Lodging a protest versus lodging a frivolous protest is one of those fundamental acts to ensure integrity and ethics in the acquisition process. Unfortunately, the protest process boils down to keeping laywers busy rather than clearing up the issues, refining requirements, and more basically delaying capabilities the warrior needs.

Having experienced nearly all aspects of the acquisition process and watched senior leaders prepare for exiting after 30 plus years of service, there should be a prohibition for eight years from working in the industry over which they had functional influence, not just acquisition authority. And likewise civilian leaders entering into Government service as either political appointees or SES should be prohibited from working in a position responsible for oversight, control, or acquisition of services, products, or contracts related to their prior position.

[Nicholas Fagan]

The Pentagon's leadership is absolutely right, they should impose penalties for contractors who make threats like that. When a military contractor says such a bold statement. When a military general is so rebelious as to demand you buy what they want then that's a threat and it makes me suspicious about where is loyalties really lye.

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