Losing contract bidders increasingly turn to protests

By Marjorie Censer
Monday, June 14, 2010

If at first you don't succeed -- protest!

A growing number of government contractors are appealing contract awards that don't go their way.

When the Army failed to select Oshkosh and its team to take part in a competition for the next-generation Humvee, the Wisconsin-based company saw enough problems with the process that it backed an official protest with the Government Accountability Office.

The appeal failed, and it was not long before Oshkosh found itself on the defensive after BAE Systems and Navistar filed protests over Oshkosh's win in another competition for Army trucks.

BAE and Navistar prevailed, only to lose to Oshkosh again when the contract was rebid.

Appeals are now an accepted part of the process, a chance to win work that seemed lost or at least to pressure the government into further negotiation.

"Oshkosh has been on both sides of that," said R. Andrew Hove, president of Oshkosh's defense business.

Many protesters say appeals are necessary when the goverment makes flawed assessments or doesn't follow its own rules.

The GAO represents the first line of appeal. Once a protest is filed, the agency has 100 days to hear the case and make a ruling. Though the process is typically a paper exercise, the GAO holds hearings in about 10 percent of cases. Its recommendations are not binding, but they are almost always adopted.

According to a GAO report, the agency saw 1,989 bid protests filed in fiscal year 2009, up 20 percent from the 1,652 filed a year earlier. And the 2008 numbers were up 17 percent from the year before.

Stanton D. Sloane, president and chief executive of Fairfax-based contractor SRA International, said many competitors -- particularly incumbent contract-holders -- find little reason not to appeal to the GAO.

"If they lose a contract, there's almost a strong incentive to protest," said Sloane, who supports adding disincentives to the process. "If you can delay changeover from one company to the next -- however long you delay it, that's additional revenue."

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