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.
Protest procedures often appear Draconian to the uninitiated–in some jurisdictions, an entire brief, with supporting exhibits, must be filed within two or three days of the government announcing its decision, and deadlines of a week or less are the norm. The public policy animating these procedures is the need to move contracts forward before pricing becomes stale–otherwise, a bidder’s right to file a protest would amount to a veto power for public business. To be sure, there must be a balance between the need to move things quickly and the need for a fair and accurate proceeding, and a two-day deadline may well not strike the right balance. However, the tight deadlines often strike a fair balance between the competing public policies at stake.
Conversely, eleven months is clearly too much time to delay a contract. The 30-day period targeted by the federal government is an admirable goal, and one shared by some local jurisdictions, including Miami-Dade County, which has protest procedures that require a resolution in just over a month’s time. For the protestor, that is a lot of work in a short period of time (over the years, we have developed a number of knowledge-management tools to efficiently draft or respond to bid protests within the very short applicable deadlines). However, the tight deadlines often fairly balance the competing public policies at stake.