Last week we looked at the process of getting to contract award, introducing the Purse String Index for HHS and DHS. This week we’re taking a peek at what sometimes happens post-award – protests. A protest is an official challenge to the award or proposed award of a contract, or a challenge to the terms of a solicitation for a contract. The Government Accountability Office (GAO) puts out an annual report each fiscal year that provides a high-level summary of protest activity. We wanted to go a little deeper and see who’s getting protested and who’s doing the protesting.
For this analysis, we looked at 18 months of protest data (September 2012 through the present). In that time, 4,048 protests were submitted.
There are four possible outcomes for a protest. According to GAO, a protest can be:
- Dismissed because of a technical or procedural flaw (such as lack of timeliness or jurisdiction) or because the agency takes corrective action that addresses the protest
- Denied based on merit of the protest following an evaluation
- Withdrawn by the protester
- Sustained because GAO agreed with the protest arguments following an evaluation
Protests By Agency
We should note that GAO reports a sustain rate of 17%. However, it calculates the sustain rate against only the protests that were evaluated for merit. It does not consider Dismissed and Withdrawn protests for that metric. Because all protests, regardless of the eventual outcome, have the potential to draw out the contract award process or otherwise hold up project start dates, we’re considering all protests in this analysis. Protests by Agency
The Department of the Army had the highest number of protests (891) during this period. For context, it posted over 12,000 award notices on FedBizOpps. Thus, as a percentage of award notices the Army maintained a 7% protest percentage*. The Navy and Air Force, the second and third most protested agencies, had a 3% and 5% protest percentage, respectively.
The Department of Veterans Affairs (VA) was the most protested non-defense agency and had a protest percentage of 6%. The VA had nearly twice as many protests as the second most protested non-defense agency, DHS.
It’s interesting to note that, for all agencies (defense and non-defense), the distribution of outcomes is relatively consistent. That is, the percentage of Dismissed, Denied, Withdrawn and Sustained protests for each agency are about the same as the overall average.
The most interesting thing about the vendor perspective on protests is that one company, Latvian Connection LLC, protests far more than any other company. It submitted more than twice as many protests in the past 18 months as the second most frequent protester, Booz Allen.
Latvian Connection is an interesting case and delving in to the background of this company could fill a blog post of its own. Suffice to say, it does not appear to have ever successfully executed a government contract. (It apparently won an Army contract in 2011, but the full award amount was deobligated in 2013).
However, Lativian Connection submits between 60 and 70 protests per year – all defense contracts, and mostly Air Force and Army. The owner of the company seems to be retired Air Force Master Sgt. Keven L. Barnes, who was detailed to the Defense Contract Management Agency. All we could find that may shed some light on the protest activity of Latvian Connection is a three-part article, written by Mr. Barnes in 2010.
Another other notable point is that most of the frequent protestors have few or no sustained protests.There is no apparent, at least with this sample size, correlation between frequency of protests and winning protests. Aldevra has won the most protests over the previous 18 months with 8 sustained protests against Veteran’s Affairs.
Finally, our analysis did indicate a minor seasonality effect. While the volume of protests does pretty consistently fluctuate with the volume of awards, the protest percentage increases by a couple of points at the beginning of the fiscal year. In other words, a slightly higher percentage of bids are protested in October and November than at other times of the year.
GovTribe is going to continue to roll out statistical nuggets and analyses that provide insight into the government contracting market. We can’t get to everything on our blog, but please don’t hesitate to reach out if you have a request. For targeted analysis we can write you a Custom Report. But if you have an interesting question we may respond to it for free on our blog.
* A Note on the Protest Percentage
The protest percentage isn’t necessarily the percent of awarded contracts that were protested. Sometimes there are multiple protests against the same procurement, and too often contract awards are not posted publicly for us to mine. There are also occasionally protests of task orders issued against previously awarded contract vehicles.