Penalties for “Unwarranted” GAO Protests?Feb 25, 2008 17:39 UTC by Defense Industry Daily staff
In “General bemoans glut of Air Force contract protests“, Government Executive magazine quotes Gen. Bruce Carlson, the commander of US Air Force Material Command [link added by DID]:
“[he said] that the contract for the huge airborne tanker program will be awarded by the end of this month, but he also expressed confidence that the protest against the decision already has been written. The reason… is that there are no penalties for a losing bidder to protest, even though the appeals delay vital acquisition programs and cost the military hundreds of millions of dollars. The protest of the November 2006 decision on the Air Force’s new combat search and rescue helicopter, won by the Boeing CH-47, has cost the Air Force $800 million, Carlson said… The general told reporters at a forum sponsored by Aviation Week that there should be some form of penalty instituted for protests that are found to be unwarranted. He said that some losing bidders file protests with 20 or 30 elements when perhaps only one part has any foundation…”
The general is correct concerning the costs, and some US Government Accountability Office protests do appear to cross the line between customer and supplier in attempting to dictate the criteria as well as the process. The near-certainty of protests around major awards has also had the effect of shutting smaller firms out of the bidding altogether for key contracts. There are considerations on the other side of the ledger as well, however…
Gen. Carlson is describing an environment that, unsurprisingly, looks a lot like the USA’s legal tort system – not exactly considered a model among civilized countries. In contrast, countries using the “English Rule” can force losing plaintiffs to reimburse part of the defendants’ costs, especially if the suit is deemed to be frivolous.
Having said that, the environment surrounding government defense contracts is very different. Consider, for example, how the presence of a single-buyer monopsony, the level of future interactions among the players, and the fact that public funds are involved affects where the balance must be struck. How can a fair playing field be ensured, and corruption prevented – without creating an environment where the customer begins to lose control of the requirements, procurement timelines for major programs are lengthened by litigation no matter what is done, and the ability to exercise judgment is curtailed?
Project on Government Oversight has a few heated opinions, of course. They also have a useful chart that looks at GAO protests filed and decisions sustained from 2001-2007.