From the U.S. Government Accountability Office, www.gao.gov Transcript for: Watchdog Report: An Overview of GAO’s Handling of Bid Protests Audio interview by GAO staff with Ralph White, Managing Associate General Counsel for Procurement Law Released on: December 8, 2010 [ Background Music ] [ Narrator: ] Welcome to GAO's Watchdog Report, your source for news and information from the Government Accountability Office. It's December 8, 2010. In addition to GAO's regular audit work, the agency also handles bid protests from companies that object to how a federal contract was awarded. Last fiscal year, GAO heard and decided 2,226 such cases. Ralph White, GAO's Managing Associate General Counsel for Procurement Law, leads the agency's handling of bid protests. GAO's Jeremy Cluchey sat down with Ralph to learn more. [ Jeremy Cluchey: ] GAO is known primarily for its reports and testimonies, but the decisions it issues on bid protest cases can have major implications for both the government and private sector companies, as well. Can you talk about what a bid protest is? [ Ralph White: ] A bid protest, in essence, is a dispute challenging the award of a federal government contract. This dispute process really arose informally; the first bid protest happened in the 1920's. GAO developed an informal procedure over the years until 1984 when Congress passed the statute, the Competition and Contracting Act, that formally spelled out and set into statute and strengthened the GAO bid protest process. So, our role in this process is to increase transparency and accountability in the award of federal government contracts. What we are hearing when we hear a bid protest are the arguments brought to us by the protester in which the protester must argue that the agency violated federal procurement law or some regulation in the selection of a contractor for this federal contract. [ Jeremy Cluchey: ] The number of bid protests has grown considerably over the past few years. What are some of the reasons for this? [ Ralph White: ] It's hard sometimes to know the real reason for why protests increase in a given year or decrease in another year, but we see sort of three basic reasons. Number 1, Congress increased GAO's jurisdiction to hear bid protests in fiscal year 2008. They granted a 3-year increase in jurisdiction to hear protests of the award of task and delivery order contracts; and in last year alone we had close to an increase of about 300 cases between fiscal year ‘09 and fiscal year ‘10; 189 of those cases were actually task and delivery order cases. There are two other areas that have caused—I think there bear some reason for the increase in protests. One is economic conditions generally are such that companies are more willing to bid for government work and perhaps more willing to fight about government work that they do not win. The second is that there has been a significant increase over the last 7 or 8 years in both the number of contract actions by the federal government and the amount of spending done by contract by the federal government. [ Jeremy Cluchey: ] The public may not be aware always of the ins and outs of the contracting process, but these decisions can have a major effect on government operations. Can you talk about a few noteworthy examples of bid protest decisions GAO has issued recently? [ Ralph White: ] Sure. One of the things that the U.S. Procurement System does, there is a fair amount of transparency in that these opportunities must be published; and with the GAO bid protest system there's an opportunity to challenge not only the selection of a contractor but the method by which the government is going forward. In a recent case that I think exemplifies this kind of situation was filed by a company called Missouri Machinery and Engineering Corporation in St. Louis, Missouri. It was decided on November 18, 2010. The case is available on our bid protest page within the GAO Web site, but in essence, this protest was sustained after the company filed a challenge that it was not being allowed to compete for repair work on Coast Guard vessels—large Coast Guard vessels longer than 110 feet in length. Basically, the agency had limited the pool of competition and this company in St. Louis wanted a chance to compete. At the end of hearing their challenges and giving the Coast Guard an opportunity to respond and reviewing all the materials, we came to the conclusion that, in fact, the company should be given an opportunity to compete for the award. GAO has no view on who should win such a competition; we're not in the business of telling an agency what to buy. But, what we did at the end of that case was say this small business in St. Louis should have an opportunity to compete and that's an important right to provide to businesses all over the country; and we're here as a forum to see that they have the right to do that. [ Background Music ] [ Narrator: ] To learn more, visit GAO's Web site at gao.gov and be sure to tune in to the next edition of GAO's Watchdog Report for more from the congressional watchdog, the Government Accountability Office.