By now, anyone who has had their finger on the pulse of government contracting is keenly aware of the impact the Trump administration’s Department of Government Efficiency (DOGE) has had on acquisitions. As of this writing, DOGE claims the amount of dollars saved because of the 13,000-plus contracts terminated to be greater than $58 billion. And while that figure has been debated and, even if accurate, would represent only a small fraction of the hundreds of billions of dollars the U.S. government spends each year purchasing goods and services, DOGE’s mission of terminating contracts and cancelling procurements appears here to stay, at least for the foreseeable future.
What does this mean for government contractors now that we’re quickly approaching the end of the federal fiscal year, when thousands of contracts normally are awarded as agencies hurry to obligate the rest of their funding for the year? For one thing, there are no more guarantees when it comes to federal procurement revenue streams. Even if a particular requirement survives getting chopped or becoming consolidated with other needs during the acquisition planning stage, there is no reliable way to predict which contracts DOGE may target next for termination or non-renewal. Indeed, at many agencies, including the Department of Defense, certain types of contracts like IT services contracts will need high-level approval from the DOGE representative going forward before contract actions like modifications and the exercise of options may be taken.
This raises the stakes for each procurement. Every contract won is made more valuable in relation to what, for those contractors impacted by the DOGE effect, is a waning universe of contracting opportunities. And every bid or proposal lost cuts a little deeper into contractors’ profit margins, particularly when they have fewer contracts to allocate their indirect bid and proposal preparation costs to.
Consequently, to protect their interests as offerors during this first end-of-fiscal-year following the creation of DOGE, contractors should consider all their options when it comes to filing a bid protest. After all, the bid protest process available at the Government Accountability Office (GAO) and the U.S. Court of Federal Claims (COFC) provides contractors the opportunity to weigh in on the procurement decision-making process. For disappointed offerors, that means getting the chance to overturn an award and gain a second bite of the increasingly competitive procurement apple.
This article explores reasons to file a bid protest and explains why protesting is becoming more important than ever in the wake of the DOGE effect. In the next post, we will explain why the same is true for protest interventions, as well as the reasons why awardees should, in perhaps all cases, intervene in protests challenging their contract awards.
Obtain a Stay of the Issuance or Performance of a Contract
Perhaps the most immediate effect of filing a protest at the GAO is the automatic stay required under the Competition in Contracting Act (CICA). By statute, if the agency receives notice of a protest filed at GAO before an award is made, then the agency is prohibited from issuing the award pending resolution of the protest. In the post-award context, if the agency receives notice of a protest filed at GAO within 10 days of the date of award, or within five days of a requested and required debriefing, whichever is later, then the agency must suspend performance of the contract pending resolution of the protest.
While CICA allows agencies to override the stay if there are urgent and compelling circumstances, overrides are difficult to obtain due to how high up the chain of command agencies have to go to obtain approval. Essentially, a timely filed protest at GAO in most cases will result in the award being suspended until the protest is resolved, which can take up to 100 days.
At the COFC, CICA’s automatic stay provision does not apply, meaning that a mandatory stay of the issuance or performance of a government contract pending the resolution of the protest can occur only if the court grants preliminary injunctive relief. Such relief is rarely granted and can be difficult to obtain, because it requires the protester to demonstrate the likelihood of success on the merits and evidence of irreparable harm, among other things. But the government may be amendable to voluntarily staying an award pending resolution of a COFC protest, particularly if the protest was filed pre-award or at a relatively early stage of contract performance.
If you are the incumbent contractor, then the value of a stay of performance – whether mandated by CICA, an injunction or granted voluntarily by the government – cannot be overstated. The work still needs to be performed, and oftentimes the government decides to take the path of least resistance by issuing a bridge award to the incumbent while the protest is pending. So, if an incumbent loses the follow-on competition, filing a protest challenging that award could extend the incumbent’s performance while the protest of the follow-on contract is pending.
Even if you are not the incumbent, a stay of issuance or performance of a challenged award is valuable because it prevents revenues from a contract you may have spent hundreds of thousands of dollars bidding on from going to a competitor that may win or may have won perhaps only because of unreasonable or arbitrary conduct by the government. Thus, the stay preserves the status quo in the event the protester prevails and gets that precious second bite at the procurement apple.
Provide Your External Counsel Access to the Procurement File
Losing an award after spending a substantial amount of time and money on your proposal is disappointing enough. But that disappointment is often exacerbated by the fact that agencies many times may provide paltry explanations about why you lost – and why your competitor won instead. Granted, efforts have been made to improve the debriefing process for unsuccessful offerors, including with the implementation of enhanced debriefing procedures in defense procurements. The fact remains that agencies are constrained by law by what information they can share during the debriefing process. Details about the awardee’s proposal and a point-by-point comparison with the unsuccessful offeror’s proposal will not be shared. Nor will pricing information other than the awardee’s total evaluated price normally be provided as part of the debriefing.
The obligation to share information is even less forthcoming in Federal Supply Schedule procurements, where only a “brief explanation” of the basis for the award decision is required to be provided upon request. As a result, many times offerors only receive a rundown of their and the awardee’s adjectival ratings, total prices, and a one sentence best value tradeoff justification with their notices of unsuccessful offer, leaving them scratching their heads about what went wrong.
Engaging external counsel to protest the award decision, however, can enable offerors to have their lawyers gain admission under a protective order so that they can peek under the covers and examine the procurement file on their clients’ behalf. Gaining access to the procurement file is a powerful tool your counsel can utilize to analyze the merits of your case and identify supplemental grounds of protest, including grounds attacking the evaluation of your competitor’s proposal.
But contractors should be aware that the scope of information that external counsel may gain access to differs between which forum you bring your protest in. GAO will limit the contents of the agency report to only those documents that are “relevant” to the asserted grounds of protest, which agencies oftentimes construe narrowly to prevent protesters from engaging in a fishing expedition for supplemental protest grounds. At the COFC, however, Appendix C of the Court’s Rules identify a long list of documents that are considered “core” to a protest, which Department of Justice (DOJ) attorneys oftentimes include wholesale into the administrative record to obviate the need for motions to complete or supplement the record. Given these differences then, it is important to engage external counsel who are familiar with the rules of procedure applicable to each forum, and who can tailor protest grounds and arguments in a way that maximizes the number of “relevant” and “core” documents required to be produced by the government.
Get a Second Bite at the Procurement Apple
The most compelling reason to file any protest is to obtain corrective action, which in the post-award context means getting a second chance at competing for a government contract award. According to GAO’s annual reports to Congress, while only a small fraction of protests are sustained each year (typically 13% to 16%), the effectiveness rate – which measures whether the protester obtains some form of relief from the agency, either as a result of voluntary agency corrective action or sustainment – hovers around 50% of protests filed each year. Unfortunately, the COFC does not similarly track the effectiveness rate of protests filed before that forum. But the fact that approximately half of all protests filed at GAO results in some form of corrective action shows that bid protests can, indeed, be an effective means of influencing federal procurement decision-making.
The form of corrective action can take many shapes. Ideally for the protester, the agency can cancel the challenged award and issue it to the protester instead. While perhaps not the most common outcome, “flipped” awards do occur. But even if the corrective action is something other than a “flipped” award, that may have value, too. A reevaluation with a new source selection decision forces the agency to take a second look at the protester’s proposal. Amendment with solicitation of revised proposals, or the opening or reopening of discussions, allows the protester to correct issues in its proposal that may have resulted in its elimination in the first place. Even the cancellation and complete redo of a procurement from scratch has its benefits. It allows the agency to clarify and update its needs, thereby allowing for competition on a more equal footing.
Any way one looks at it, then, getting that second bite at the procurement apple through corrective action can be of tremendous importance to unsuccessful offerors that felt they were denied a fair opportunity to compete. Given that agencies are also experiencing the DOGE effect in their procurement offices, with tightened budgets and reduced headcount, there may be plenty of opportunities to question whether agencies have adequately documented and justified their evaluation findings this protest season. Seeking corrective action in a protest thus represents an important check to hold the government accountable as it rushes to make awards before the end of the federal fiscal year.
Conclusion
What the Trump administration decides to cut next remains largely unknown. But, for better or worse, DOGE appears here to stay. While Elon Musk may no longer be serving at its helm, DOGE now has employees staffed throughout the government, ready to initiate the next phase of cost-cutting measures. With each new contract terminated and procurement cancelled, the contracting opportunities that remain become that much more valuable to the pool of offerors competing for a piece of the government pie.
As a result, whereas before a procurement may have attracted a dozen or so competitors, now 30 or 40 are competing for an award. The consolidation of requirements under the General Services Administration’s governmentwide acquisition contracting vehicles (another one of the Trump administration’s procurement-related initiatives) has only exacerbated this trend, with hundreds of offerors competing at once for a spot on these long-term vehicles. The combination of increased competition per procurement, with fewer revenue-generating contracting opportunities to compete for overall, means that the upcoming end-of-fiscal-year could see a lot of protests filed in the wake of the DOGE effect. Contractors should start preparing their protest strategies now in case they find themselves passed over for awards that they feel they should have won.
Opinions and conclusions in this post are solely those of the authors unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The authors have provided the links referenced above for information purposes only and by doing so, do not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the authors to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the authors if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.
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