While the bid process has been around for a long period of time, challenge process to the award of government contracts has been formalized for only the last 33 years despite the passage of the Contract Disputes Act of 1978. Current bid protests are a far departure from the 1940s when the United States Supreme Court ruled in Perkins v. Lukens Co. v. United States, 310 U.S. 113 (1940) which held that no one had a right to a government contract. This was later revised by the D.C. Circuit Court in 1970 with the passage of the Administrative Procedures Act, finding that while not entitled to a government contract a protestor may challenge the process used by the agency in awarding procurement contracts. This opened the doors of the courts to hear bid protests. While this was eventually restricted with the Administrative Dispute Resolution Act of 1992 which phased out access to the district courts and left all protest claims exclusively within the Court of Federal Claims as of January 1, 2001, it has done nothing to eliminate them.
So, what is a bid protest? This is perhaps the most nebulous question to be asked because the answer is very generic: anytime there is a compromise in the competition that led to the award of a government procurement. Some examples of this that give rise to a protest include:
- Where the contract awarded differs significantly from the product or service solicited, this can include a relaxation of the specifications originally requested without submitting the solicitation a second time.
- Significant cost changes, for example bid was for $100,000 for services but the award was for $1 Million.
If one feels as if there was a compromise in the competition then the next question in deciding whether to file a claim is whether one has the ability to protest. Protesters are often restricted to interested parties (those with an economic interest in the outcome), which is a distinction to prevent anyone from being able to protest as a member of the public who disagrees with the spending of government tax dollars. An example of this could be in a military defense contract: a bidder who did not receive the contract award would have standing but an anti-military tax payer who objects to spending on military activities would not have standing.
Lastly the determination must be made as to where the protest will be filed. Today there are only three forums for a claimant with standing to bring a bid protest with regard to Federal procurements:
- The procuring agency (FAR 33.103)
- Comptroller General (Government Accountability Office) (28 U.S.C. 1491 (a)(1) and (b)(2))
- Court of Federal Claims (31 U.S.C. 3551)
While all venues offer the ability to file the protest pre and post-award there are vast differences in the remedies that can be given by the different entities ranging from any appropriate action to injunction or declaratory judgments. As a result it is important to consider the type of relief is being sought.