On January 26, 2010, the Government Accountability Office (GAO) released its annual compilation of bid protest statistics. In brief, the figures for Fiscal Year (FY) 2009 reveal that the overall number of protests increased substantially over the previous year, and protestors achieved favorable results more often. GAO also identified one case from FY 2009 where an agency declined to follow the GAO's recommendations. That dispute highlights a split between the GAO and the Executive Branch over preferences for HUBZone small businesses.
According to GAO's report, contractors filed 1,989 protests, a 20% increase over FY 2008. GAO attributed half of that growth to its new jurisdiction over task orders, A-76 filings and Transportation Security Administration contracts. The weak economy likely contributed to the increase as well. With fewer opportunities in the private sector, contractors likely faced increased pressure to pursue and to protest government awards.
GAO sustained protests that went all the way to a written decision at the lowest rate (18%) in the past five years, yet protesters actually enjoyed more overall successes than in recent years. The agency sustained 57 protests, three fewer than in FY 2008 and one-third fewer than just two years ago. Protesting proved effective, though. More protestors obtained favorable relief in FY 2009 (45%) than in the previous year (42%) or any other recent year. The increase in overall relief and decrease in sustained protests together indicate that agencies took corrective action during the course of the protest more often than in the past. Notably, GAO also held twice as many hearings in 2009 (12%) as compared to 2008 (6%).
Alternative dispute resolution (ADR) also played a more prominent role. Protests were referred to ADR 149 times in FY 2009, nearly a 100% increase over FY 2008 and an increase of at least 50% over any single year since FY 2005. Over 90% of disputes referred to ADR were resolved without a formal decision from GAO, a moderate increase over the past two years.
GAO must report to Congress whenever an agency rejects GAO's recommendations. That occurred one time in FY 2009 in Mission Critical Solutions, B-401057, May 4, 2009, 2009 CPD ¶ 93. In that case, the GAO held 15 U.S.C. § 657a requires procuring agencies to set aside opportunities for HUBZone small businesses when at least two HUBZone businesses will bid and when the winner can offer a fair price. Based on this reading, the GAO ordered the Army to re-open a sole source award to a non-HUBZone, 8(a) small business. The Army refused to follow this recommendation because it, along with the Department of Justice and the Small Business Administration, reads Section 657a as a permissive rather than mandatory preference. The question remains open. In its report, GAO urged Congress to clarify whether Section 657a requires giving preferences to HUBZone small businesses.