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07.01.2006 "Friendly Protests" Against Government Contract Awards
07.2006
A disappointed bidder in a state, local, or federal government procurement can seek review of an agency's contract award decision without suing its government customer.  This "agency-level protest" is worthy of consideration as an alternative to the traditional judicial protest.

Instituting a judicial protest against a government agency's decision to award a contract is akin to biting the hand that feeds you.  Nothing can alienate your customer more than a lawsuit.  For state and local procurements in Virginia, protests are filed in the circuit courts. In federal government procurements, protests can be brought before the U.S. Government Accountability Office ("GAO") and the U.S. Court of Federal Claims. Protests before the GAO are administrative proceedings, but they are just as disruptive to contracting officers as are protests brought in court. Any protest interferes with the contracting officer's efforts to ensure orderly contract performance in support of the agency's accomplishment of its mission.

An agency-level protest is considered "friendly" because it allows the agency to retain control of he acquisition process. It implies that the protester trusts the agency to do the right thing. The protester is asking the awarding agency itself to reconsider its decision rather than putting the agency on report with a third-party adjudicator. If the agency determines that an agency-level protest has merit, it is more likely to view the protest as helpful to its effort to conduct a proper acquisition. Furthermore, an agency-level protest saves an agency from the embarrassment of being ordered by a third party to take remedial action. A traditional protest, on the other hand, takes the matter out of the agency's hands.

A bidder does not forfeit his or her opportunity to file a traditional protest by electing to follow agency-level proceedings.  In Virginia, following a mandatory initial determination from the contracting officer, the disappointed bidder can elect to invoke agency-level administrative appeal procedures or challenge the award by filing a protest in the circuit court.  If the bidder elects agency-level proceedings, judicial review of the decision will still be available, but only after the culmination of the administrative process. Similarly, a bidder on a federal contract who elects agency-level protest proceedings can protest with the GAO within 10 days after initial adverse agency action on the protest or with the Court of Federal Claims at virtually any time.

Typically, if a protest precedes contract award, the agency will refrain from making an award while the agency-level protest is pending. 

Despite the sting of losing a government contract to a competitor, bidders must coolly weigh their likelihood of success against the financial and relationship costs of alienating a desired government customer when assessing whether to file a protest. The agency-level protest should always be considered as an option because it presents a friendlier alternative to traditional protest proceedings.

"'Friendly Protests' Against Government Contract Awards" as reprinted from the July-August 2006 issue of Oyster Pointer.