Last week, the Rand Corporation, which just completed an analysis of the federal bid-protest system, announced that one thing the federal government has been doing particularly well is resolving bid protests quickly–the majority within 30 days.
As we’ve explained in a prior post, a bid protest is a proceeding where a bidder for a government contract can challenge the government’s selection process or decision. Bid protests generally take place before the contract has been officially awarded by the government agency in order to give the government the opportunity to consider the issues raised and correct its course if required. Although the government sometimes has the ability to award a contract before resolving the protest–such as in the case of a public emergency–in general, the protest must be resolved first. That means that a prolonged protest delays the award, execution, and performance of the contract.
Unfortunately, delays in the award decision can be fatal to the final contract. Because the cost of labor, materials, etc., can fluctuate, a bidder may not be able to hold its price firm for a prolonged period. In the public-private partnership (P3) context, the risk of a prolonged bid protest is even more severe, as the winning proposer will have financial commitments with firm expiration dates. In the event that the financial commitment expires before the contract is awarded, the deal could fall apart. As a recent example, the P3 procurement for the I-395/Signature Bridge project required private financing commitments, but the state took nearly a full year to resolve the protest filed by the second-place proposer. The hearing examiner ultimately upheld the agency’s decision, but renewing the financial commitments after the lengthy delay will surely be a challenge. Continue Reading