federal procurement protests risk management

© 2012 Noblis, Inc. Noblis proprietary

Federal Procurement ProtestsRisk Management

presented by

Paul R. AstizPrincipal, Enterprise Services Mission Area

April 18, 2012

2© 2012 Noblis, Inc. Noblis proprietary

Introduction

Federal acquisition protest can significantly impact a government program

The impact is greater if the protest is sustained

A protest can put a program several months behind schedule and may result in significant additional costs

Objective—Provide a basis for understanding and managing protest risks


Agenda

Protest Statistics

Protest Types/Protest Outcomes/Protest Timeline

Risk Management

Risk of Having a Protest

Risk of Having a Protest Sustained

Protest Statistics


GAO Protest Statistics

Total Merit Sustain Merit/Total

Sustain/ Merit

Sustain/Total

FY2002 1204 256 41 21.26% 16.02% 3.41%

FY2003 1352 290 50 21.45% 17.24% 3.70%

FY2004 1485 365 75 24.58% 20.55% 5.05%

FY2005 1356 306 71 22.57% 23.20% 5.24%

FY2006 1327 251 72 18.91% 28.69% 5.43%

FY2007 1411 335 91 23.74% 27.16% 6.45%

FY2008 1652 291 60 17.62% 20.62% 3.63%

FY2009 1989 315 57 15.84% 18.10% 2.87%

FY2010 2299 441 82 19.18% 18.59% 3.57%

FY2011 2353 417 67 17.72% 16.07% 2.85%

Source: WWW.GAO.GOV – Annual Reports to Congress

http://www.gao.gov/


Volume Trends

FY 2002

FY 2003

FY 2004

FY 2005

FY 2006

FY 2007

FY 2008

FY 2009

FY 2010

FY 2011

0

500

1000

1500

2000

2500

Total Merit Sustain


Merit/Sustain Trends

FY 2002

FY 2003

FY 2004

FY 2005

FY 2006

FY 2007

FY 2008

FY 2009

FY 2010

FY 2011

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Merit Sustain/Merit Sustain/Total

Protest Types/Protest Outcomes/Protest Timeline


An award or proposed award of a contract/task order Solicitation or other request by a federal agency for offers for

a contract for the procurement of property or services The cancellation of such a solicitation or other request A termination of such a contract, if the protest alleges that

the termination was based on improprieties in the award of the contract

Protest Types


Withdrawn Dismissed

• Technical or procedural reasons─ Timeliness─ Jurisdiction

• Agency takes corrective action Denied Sustained

Protest Outcomes


Solicitation protests – Must file prior to bid opening or initial proposals due dates

Other protests – No later than ten calendar days after basis of protest is known or should have been known (whichever is earlier)

• If debriefing is requested, then 10 days after debriefing

GAO may consider untimely protest if it determines that protest raises issues significant to the procurement system

Agency must file report to GAO with 30 days Deadline for GAO to reach a decision within

100 days

Protest Key Deadlines

Risk Management


Risk Management

Risk Impact Likelihood

Protest risks

Having a protest Protest sustained

Impact

Delays in procurement results in program delays• Program delays result in higher costs to an agency• Will impact dependencies of program

Cost of defending the protest Costs of corrective action

• Re-issue the solicitation, re-evaluate, re-open discussions

Cost of extending older contracts Political fallout


Avoid risk Transfer risk Accept risk Mitigate

• Reduce impact

• Reduce likelihood

Risk Management Strategies

Risk of Having a Protest


Plan for protest and for protest being sustained Budget

• Contingency fund• Fiscal year boundary

Schedule• Possible 100 days delay• More than 100 days if sustained• Dependencies

Internal resource availability Prepare for contract extensions

• Impact on budgets Don’t put the program on hold

• Consider program activities not affected by outcome of protest

Reducing Protest Risk Impact


Reduce likelihood of protest

• Understand why vendors protest

Reduce likelihood of sustained protest

• Understand why protests are sustained

Reducing Protest Risk Likelihood


Why Do Vendors Protest?Reasons

Reasons Decision maker expects to win Government makes mistakes Delay the award - Incumbents Yelling at the referee (next

competition) Prove we did everything

possible

Confusion over award criteria Poor debrief Protest as a matter of policy Expectations of a side

agreement Obtain competitive Intelligence Hurt the winner

Steve Roemerman (Lone Star Aerospace) 2010 Informal Survey • Why DOD contractors file protest?• Survey of vendors and government officials (59 participants)

Source: Defense AT&L, November-December 2010


Why Do Vendors Protest?Environmental Factors

Environmental Factors[not reasons, but conditions]

No new procurement in sight Marketplace decline

• Desperate times call for desperate actions Government spends too much time and efforts trying to prevent a

protest Decline of experience among government staff Poor government communication leads to suspiciousness

• Award criteria poorly communicated• Debrief is delayed without explanation• CO missteps

Poor legal advice from retained counsel

Source: Defense AT&L, November-December 2010


Why Do Vendors Protest?Another Perspective

Analysis conducted by RAND Corporation on Air Force protests Analysis of various Air Force procurement databases, GAO case

outcomes, and Federal Procurement Data Systems-NG Government makes mistakes

• Faulty evaluations (62 percent)─ Inconsistent with rules, regulations, policies, procedures, or RFP

performance parameters• Faulty sourcing decision (18 percent)

─ Variety of reasons (sole source, small business, etc.)• Faulty RFP (17 percent)

─ Unfairly disadvantage vendor’s ability to respond─ Restrictive specifications/requirement favor one/some over others

• Faulty/unfair treatment of offerors (8 percent)─ Faulty determination of out of competitive range ─ Improper closed discussions, with some bidders ─ Faulty determination to exclude proposal from consideration

Source: RAND® Corporation - Defense Analysis of GAO Bid Protests in Air Force Source Selections Over the Past Two Decades, 2012http://www.rand.org/content/dam/rand/pubs/technical_reports/2012/RAND_TR883.pdf


Reducing Likelihood of a Protest

Government makes mistakes

“ …day wise and month foolish… ” Team knowledge/experience Process/process discipline Train/educate evaluation team Avoid us vs. them mentality

Communication

Confusion over evaluation criteria• Solicit industry input• Less is better in Section M

─ Simplify evaluation criteria─ Avoid including rating method - FAR 15.304(d)

Award/debrief• Timely notice of award/non-award• Timely debriefing • Method of debriefing

Communicate accuratelyTreat vendors fairly

Risk of Having a Protest Sustained


Evaluation and Source Selection

Price and Cost Evaluations

Discussions

Past Performance

Why Are Protests Sustained?Selected Cases—GAO Decisions

Source: GAO Bid Protest Overview, Dec/2009, Selected Recent GAO Bid Protest Decisions, Aug/2007


Did the government adhere to procurement laws and regulations?

Did the government adhere to the solicitation?

Was the government consistent with its evaluation?

Was the government fair and reasonable in its evaluation and decisions?

Key Principles for Rulings


Evaluation and Source Selection Decisions

Unsupported evaluation and selection decisions Source selection decisions and rationale are required to be documented Rationale must be consistent with solicitation stated source selection strategy, factors, and

weight of factors Must be factual, consistent, supported by findings, and adequately documented Must be reasonable

Relaxation of requirements Offeror’s must be informed and given an opportunity to change their proposals if

requirements are changed or relaxed

Failure to follow solicitation evaluation criteria Must evaluate on what was stated in the solicitation Use and apply consistently the criteria specified in the solicitation

Unequal treatment/bias Giving strength to one offeror for something and not another for the same thing Giving a weakness to one offeror and not another for the same thing Providing information to one offeror and not another

Source Selection Official’s decision to reject evaluator’s recommendation must have reasonable basis


Price and Cost Evaluation Decisions

Price/cost evaluation must be reasonable and meaningful• Consider all elements of price in the context of how they may apply;

e.g., If price for location then evaluate all locations and not just some• Reasonable basis for determining overall cost to the government;

e.g., don’t consider only certain unit prices and not others without reasonable basis

• Cost Realism - Consistent with accounting standards Adjusting vendor’s prices for comparison purposes without verifying with

the vendor the assumptions/reasons for doing so Lack of justification for higher price/technical superiority decision

• Give adequate consideration to similarity of approach• Ensure technical superiority is adequately justified

Can not exclude technically acceptable proposal from competitive range based on technical rating without considering price


Discussions Decisions

Offerors must be treated fairly and equally Provide offerors the same opportunity to revise technical or price proposals Provide the same information to all offerors Affording one offeror different submission leeway not stated in the solicitation and not

offered to others

Discussions must be meaningful Discussions can not be meaningful if the offeror is not advised of significant weaknesses or

deficiencies that must be addressed in order for its proposal to be in line for award Discussions are not meaningful if they are limited to cost without addressing significant

weaknesses and deficiencies identified in the technical proposal

Proper and Not Misleading Adequately convey to the offeror the findings and concerns so that they can be

understood and acted on Inform of concerns in one area and not in another which is also of concern and may make

the proposal unacceptable


Past Performance/Experience Decisions

Evaluation must be consistent with evaluation criteria

Evaluation must be reasonable in its consideration of relevant experience

Can not downgrade past performance evaluation based on lack of relevant past performance• Grade as neutral if no relevant past performance

Equal effort must be applied to contact references• Reasonable conclusions for past performance if

contact is not reached


. . . things to keep in mind . . . Fair and equal treatment of offerors Consistency across all aspects of the process Source selection decisions are required to be documented

• Factual and supported by findings• Adequately supported best value trade-off decisions

Evaluation must be reasonable and consistent with solicitation

Price Evaluation• Reasonable and meaningful price evaluations consistent with

accounting standards• Adequate consideration of price and technical

In Summary . . .


Reducing Likelihood of a Protest Sustained

Clear and documented source evaluation process and procedures Train/Educate Evaluators

• Reasons why protests are sustained• Evaluation process/procedures• Identifying/Documenting findings & Justifying ratings

“…day wise, month foolish…”• Allow adequate time to familiarize evaluators with proposal• Evaluation time consistent with size and complexity of solicitation• Take time to prepare discussions/communication with offerors

Use acquisition support tools Use consultants/experts to support evaluation and guide the process Use technical SMEs in support of price analysis Compare proposals Embrace risk management

Protest Denied!!!

federal procurement protests risk management

Documents