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Federal Procurement Protests Risk Management

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  1. Federal Procurement ProtestsRisk Management presented byPaul R. Astiz Principal, Enterprise Services Mission Area April 18, 2012

  2. 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

  3. Agenda • Protest Statistics • Protest Types/Protest Outcomes/Protest Timeline • Risk Management • Risk of Having a Protest • Risk of Having a Protest Sustained

  4. Protest Statistics

  5. GAO Protest Statistics Source: WWW.GAO.GOV – Annual Reports to Congress

  6. Volume Trends

  7. Merit/Sustain Trends

  8. Protest Types/Protest Outcomes/Protest Timeline

  9. Protest Types • 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

  10. Protest Outcomes • Withdrawn • Dismissed • Technical or procedural reasons • Timeliness • Jurisdiction • Agency takes corrective action • Denied • Sustained

  11. Protest Key Deadlines • 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

  12. Risk Management

  13. Risk Management

  14. Risk Management Strategies • Avoid risk • Transfer risk • Accept risk • Mitigate • Reduce impact • Reduce likelihood

  15. Risk of Having a Protest

  16. Reducing Protest Risk Impact • 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

  17. Reducing Protest Risk Likelihood • Reduce likelihood of protest • Understand why vendors protest • Reduce likelihood of sustained protest • Understand why protests are sustained

  18. Why Do Vendors Protest?Reasons • 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

  19. Why Do Vendors Protest?Environmental Factors Source: Defense AT&L, November-December 2010

  20. 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, 2012 http://www.rand.org/content/dam/rand/pubs/technical_reports/2012/RAND_TR883.pdf

  21. Reducing Likelihood of a Protest

  22. Risk of Having a Protest Sustained

  23. Why Are Protests Sustained?Selected Cases—GAO Decisions • Evaluation and Source Selection • Price and Cost Evaluations • Discussions • Past Performance Source: GAO Bid Protest Overview, Dec/2009, Selected Recent GAO Bid Protest Decisions, Aug/2007

  24. Key Principles for Rulings • 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?

  25. Evaluation and Source Selection Decisions • Source Selection Official’s decision to reject evaluator’s recommendation must have reasonable basis

  26. 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

  27. Discussions Decisions

  28. 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 contactis not reached

  29. In Summary . . . • . . . 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

  30. 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

  31. Protest Denied!!!