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Every year the General Accounting Office publishes statistics regarding bid protests filed with GAO the previous fiscal year.  Yesterday, GAO released those statistics for FYs 2007-2011.  These statistics show some interesting trends.

There was an 2% increase in protests filed in FY 2011 – 2,353 as compared to 2,299 in FY 2010.¬† The number of protests filed has increased every year since GAO began collecting these stats in 2007.¬† The 2% increase for FY 2010 is the smallest increase yet and somewhat surprising as the increase from FY 2009 to FY 2010 was significantly more than that – 16% and the increase from FY 2008 to FY 2009 was even greater – 20%.¬†¬†¬† It’s hard for this Northern Virginia government contracts lawyer to say what this means – the steady increase in protests over the last few years was easy to interpret as a signal that our industry was getting more competitive, that businesses were more comfortable using protests to keep or seek business and, in a recession,¬†that companies were¬†more willing to fight to keep existing business.¬† The fact that the increase was minimal this year is unusual to me.¬†I’d be¬†interested to hear y’all thoughts on this.

From my perspective, the most important statistic published by GAO is the sustain rate; that is, the percentage of protests that are granted by GAO.  I generally tell clients that the average sustain rate is about 20% or 1 in 5.  The FY 2011 statistics, however, are bringing this average down.  In FY 2011, only 16% of the protests filed were sustained.  Compare this sustain rate with rates for FYs 2010 (19%), 2009 (18%) and 2008 (21%).  This statistic does not surprise me and is consistent with both my personal experience and experience of others in my field.  But it is worrisome.  As budgets shrink and the acquisition workforce is thinned out or overworked, mistakes will be made.  I just do not believe that the quality or merit of protests filed in FY 2011 is substantially different than those filed in previous years; accordingly, I have to conclude that GAO is just less inclined to grant protests.

Another statistic is worth noting:  the percentage of protests that resulted in hearings.  For FY 2011, GAO held hearings in 8% of the protest cases filed, down from 10% in FY 2010 and 12% in FY 2009.  It used to be that in close cases or when something in the record looked suspicious, GAO would hold a hearing.  The downward trend in the percentage of hearings held suggests that GAO is giving the agencies the benefit of the doubt in close cases, which seems consistent with the lower sustain rate for FY 2011.

What do these statistics mean as a whole?¬† Well, it’s a bit like reading tea leaves and I’m no psychic, but I know for sure GAO attorneys’ rosters are very full.¬† I suspect GAO has not increased its hiring practices to reflect the growing number of protests filed over the last five years.¬† With limited resources and a statutory deadline for resolving¬†protests, GAO cannot hold a hearing in every case.¬†The statistics could also reflect the economy.¬† While a tighter economy often means more litigation because companies want to keep what they have, sometimes it means that other companies will not expend the additional resources necessary to get another bite at the apple.¬† More companies are willing to walk away from protests or not press to have a hearing.

Ultimately, I don’t think the statistics matter much because the decision to file a protest is different for each company and depends on the situation in which the company finds itself at the time.¬† There are many reasons to file a protest and many reasons to walk away.¬† These statistics are just one factor to consider, but as a whole they are not very instructive.¬† GAO, in fact, may be more likely to sustain a certain type of case in a certain context.¬† If a company has that type of challenge and is in that type of position, these statistics are meaningless.

Instead, I think this area is truly an area where  a company will benefit from consulting a government contracts attorney familiar with protests.  After participating in nearly 100 protests over 20+ years, I know which protests are likely to succeed and am familiar with the issues a company considers in taking this route. And, of course, I am not alone.   In these situations, experienced protest attorneys can help make you make a more informed decision (which is well worth the paltry fees you will pay us for this invaluable advice!).

If you want a copy of the stats, email me.