The government procurement source selection process and bid protests

¶ … Government Procurement process by which the agency selects a contractor out of a field of offerors. Each step of the procedure was prescribed by Congress through various laws passed in response to repeated instances of corruption in the Government Procurement Process: Truth in Negotiations Act, Competition in Contracting Act, Procurement Integrity Act, Federal Acquisition Streamlining Act, and Federal Acquisition Reform Act.

The Source Selection process is designed to ensure transparency, fair competition, and sound decision-making from the agency.

It seeks to achieve this through highly formalized sub-procedures (stages):

Acquisition Planning Stage -- An acquisition team is established to define the requirements for the project using market research. The team then determines the acquisition strategy, prioritizing price and non-price factors. The team then issues a Request for Proposal to the pool of bidders.

Request for Proposal Stage -- After the RFP is issued, bidders can formally request answers and clarifications. These questions and answers are provided to all bidders, and technical amendments are issued to bidders if necessary.

3. Proposal Submission Stage -- The bidders submit their proposals.

4. 1st Proposal Evaluation Stage -- The proposals are given separate technical and price evaluations. The technical evaluation is done by a Technical Evaluation Board. The price proposal can be done by a Price Evaluation Board, but is often done by the Source Selection Board.

5. Establish the Competitive Range Stage -- Based on the principle of "efficient competition,"a contracting officer limits the number of proposals to the greatest number consistent with an efficient evaluation process. Those offerors eliminated from competition are promptly notified in writing, and the basis must be given on why they were excluded.

They may also receive a pre-award debriefing.

6. Negotiation Stage -- The evaluation team may meet with bidders in the competitive range to discuss alterations to the proposal. Discussions include bargaining over price, schedule, technical requirements, type of contract, etc.

All proposal deficiencies are identified to the offeror and the offeror is given a reasonable time to make proposal revisions.

7. 2nd Proposal Evaluation Stage - The proposals are given separate technical and price evaluations. The Source Selection Board reviews the technical evaluation factors against the price and justifies any tradeoffs to the Source Selection authority on the "Best Value" to the government for the award.

8. Award Contract Stage -- The Source Selection Authority may accept, reject or ask the Source Selection Board to better justify the tradeoffs. After the Source Selection Authority accepts, they make a selection and the Contracting Officer awards the contract.

9. Bid Protest Stage -- Interested parties may challenge the Source Selection Authority's selection.

Bid protests may delay the performance of the contract.

10. Contract Performance Stage -- The bidder begins performance according to the proposal.

Thesis: To prevent costly bid protests, agencies should focus more on compliance than defense, as diligent compliance in itself will reduce opportunities for reasonable challenges. Aside from compliance, Agencies should be proactive in anticipating and neutralizing grounds for bid protests from unsuccessful offerors and bidders. In addition, Agencies should be supportive and conciliatory towards unsuccessful offerors and bidders to allay lingering suspicion and resentment, as resentment itself is enough to motivate a bid protest.

Debriefing Requirements

After the final source selection decision, the agency must give timely notice of their decision to eliminated offerors within 3 days of the decision. The eliminated offerors are also entitled to a debriefing conference, which the agency must provide within five days after receipt of request.

The debriefing must include: 1) An evaluation of the significant weak or deficient factors in the offeror's proposal; 2) The overall evaluated cost and technical ratings of both successful and unsuccessful offers; 3) The overall ranking of all offerors, when a ranking has been developed; 4) A summary of the rationale for award.

Pre-Award Debriefings

When a contracting officer excludes an offeror who feels that he/she submitted a competitive proposal from the competitive range, that offeror may request in writing a Pre-Award Debriefing from the contracting officer. The Pre-Award Debriefings must include: 1) The executive agency's evaluation of the significant elements in the offeror's proposal; 2) A summary of the rationale for the offeror's exclusion; 3) An answer to relevant questions posed by the debriefed offeror as to whether source selection procedures set forth in the solicitation, applicable regulations, and other applicable authorities were followed by the executive agency.

However, the debriefing may not include the number or identity of other offerors or information about the content, ranking, or evaluation of other offerors' proposals.

Best Value Acquisitions

In 1995, FAR removed the requirement that cost-reimbursement contracts be awarded on the basis of lowest proposed cost, lowest proposed fee, or lowest proposed cost plus fee.

This change allowed agencies the flexibility to select higher-cost bids instead of just being required to choose the cheapest proposal, which often entailed a lower-quality project. Agencies which choose to award a contract to a company offering higher quality at a higher cost would be making a Best Value Acquisition, which FAR defines as "the expected outcome of an acquisition that, in the agency's estimation, provides the greatest overall benefit in response to its requirements."

FAR requires such agencies to prove Best Value by documenting the rationale for the business judgments and trade-offs made, including the benefits associated with the additional costs.

Bid Protests Background

Due to the highly publicized abuses of the Government Procurement process, Congress decided to create a check on the considerable authority that agencies exercise in select contractors.

Congress created the bid protest, a legal mechanism where interested parties could challenge the agency's Source Selection decision not only to the agency itself, but also to an independent body outside of the agency: the Government Accountability Office.

Protests submitted to the GAO receive an automatic stay of performance.

Bid Protest Rules

According to the Government Accountability Office, "A bid protest is a challenge to the award or proposed award of a contract for procurement of goods and services or a challenge to the terms of a solicitation for such a contract."

Only "interested parties" may file protests, which means an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of a contract or by the failure to award a contract.

When the bid protest is directed at the agency's evaluation of proposals or award of contracts, the offeror would only be an "interested party" if he is potentially in line for the award if the protest were sustained.

Thus, a party which had no chance of receiving the award would not be an "interested party," no matter how unfairly that party was treated.

Preparing a response to a complaint, no matter how weak, is costly for the agency. Unless the protest is dismissed because it is procedurally or substantively defective, the agency is required to file a report with GAO responding to the protest and to provide a copy of that report to the protester. The protester then has an opportunity to file written comments on the report.

Utilizing Debriefings to Prevent Bid Protests

Officially, Post-Award debriefings are meant to provide transparency to the unsuccessful candidates. Although the prescribed requirements of the briefings are very rigid and formal, agencies should resist the temptation to meet the bare minimum required by the formalities. Agencies should pay special attention to Requirement 1, the "evaluation of the significant weak or deficient factors in the offeror's proposal" because the evaluation is open-ended, unlike Requirements 2-3, which contain definite numerical standards, and Requirement 4, which only requires a simple summary. Open-ended evaluations can vary greatly in quality and also increase the opportunities for the agency to make a mistake.

If it is a particularly confusing or shallow evaluation, an unsuccessful offeror might take issue with the soundness of the agency's decision and later move to Protest the Bid by claiming that the evaluation demonstrated unsound judgment or unfair treatment. Because Bid Protests to the Government Accountability Office receive an automatic stay of performance, even a weak protest could delay a project significantly.

Because of the disruptive potential of Bid Protests, Agencies should use debriefings as an opportunity to resolve any lingering grievances and remove any ammunition that the unsuccessful offeror may have for protesting the bid. Agencies can accomplish this by doing very thorough evaluations which anticipate and address likely grievances from unsuccessful offerors. Rumbaugh recommends that "the debriefings provide offerors with positive, constructive, and comprehensive feedback, demonstrating that the government is interested in their future success."

Offerors should "feel as if they've gotten the "complete story" about their evaluation."

Conclusion

Although bid protests are very annoying the average agency, they seem to have achieved their purpose by promoting agency hyper-compliance with source selection procedures, thereby reducing opportunities for corruption and misconduct among agencies. Because bid protests are costly to both the agency and the contract winners, the mere threat of protest provides incentives for agencies to "design and operate source-selection processes that are transparent in terms of promoting compliance with the law; fair in terms of access to contracting opportunities; and effective in terms of responsiveness to Congressional preferences."

Thus, as long as agencies remain diligent and focused in compliance, the legislative purpose of the bid protest system, and of the source selection system, will be fulfilled.