Even though the number of protests is going down overall, two huge contracts at the Defense Department are in two different stages of protest. Amazon Web Services has opened up a new front in its protest of the JEDI cloud contract. Perspecta lost a second round in its protest of the Navy’s award of its NGEN-R contract to Leidos.
Joe Jordan, CEO at Actuparo and former Administrator of Federal Procurement Policy, talked to Francis Rose of “Government Matters” about what to expect with government protests in 2021.
Companies generally protest for a few different reasons, Jordan explained. First is that losing a contract award can feel unfair. Beyond that, there are legitimate reasons, including errors in the solicitation or award decision. “About 2,100 cases were filed with GAO, and 15% of those protests were sustained,” said Jordan.
Another reason is that because the value of these contracts is so high – $8 billion for NGEN-R and $10 billion for JEDI, for example – that the expected value calculation is worth the legal fees, Jordan explained.
Lastly, if you are an incumbent and know protesting will delay the award of the follow-on contract by a hundred days or so, “that’s revenue to you for a hundred days that you wouldn’t have gotten, because the new contractor can’t come in until that protest is decided usually,” said Jordan. “This is the one I hate the most, honestly.”
Numbers from GAO indicate an approximate 85% protest dismissal rate that has been relatively consistent over the past four years or so. Jordan said there is no reason to believe that will change in the near future.
“There was a bit of an outlier back in 2016, where you had 2,800 cases filed, and 23% of those were sustained, so both a peak in terms of number of cases and a peak in terms of sustain rate,” said Jordan.
Jordan will pay close attention to three things in 2021. One is what happens with the big, multiple-award, multi-vendor contracts. He referenced GSA’s “disaster with Alliant 2,” adding, “I can’t tell you how many small businesses come up to me and say, I spent tens of thousands of dollars to put my proposal together … and then for GSA to say, oh, just kidding, we’re canceling and rethinking all of this, that was a real disaster.”
The second thing Jordan plans to watch is what will happen with COVID-related contracting that was done quickly, follow-ons to that work and potential increases in protests. The third is how the JEDI contract will play out.
“It’s the one protest in the history of my time in this space that has come up at cocktail parties, and not just with my procurement nerd friends, but with normal people too,” said Jordan.