GAO Issues Annual Report to Congress – Shows Sharp Drop in Bid Protest “Sustain Rate,” But “Effectiveness Rate” Remains Unchanged
Today, the U.S. Government Accountability Office (GAO) issued its annual report bid protest report to congress. The report shows a sharp decline in the rate of protests sustained by GAO. For several years the “sustain rate” at GAO had consistently hovered between 16% and 19%. Today’s report shows the “sustain rate” dipped to 13% in FY2014. This is easily the lowest “sustain rate” since GAO started reporting that rate to Congress.
Does the drop in the “sustain rate” mean that protests are now less likely to succeed at GAO? Probably not, as the “sustain rate” is not a particularly reliable figure for measuring the chances of success at GAO.
For one, the “sustain rate” is an inherently misleading statistic due to the manner in which it is calculated. GAO calculates the “sustain rate” by dividing the number of protest “cases” sustained by the number of protest “cases” decided on the merits. However, the manner in which GAO counts a protest “case” can easily skew the sustain rate. GAO counts each “B” number accorded to each decision as a separate “case.” A protest is issued a new “B” number every time an additional protest is filed involving the same procurement, including supplemental protests or protests filed by additional parties. As a result, while some protest decisions involve a single “B” number and are counted as a single “case,” others involve numerous “B” numbers and are counted as multiple “cases”. Thus, GAO’s “sustain rate” can easily be skewed by a protest decision involving multiple “B” numbers. For example, one GAO denial decision this year included twelve separate “B” numbers, and thus was counted as twelve different protest “cases” in GAO’s statistics, even though only one procurement was protested and only one decision was issued. Had that one decision been a sustain rather than a denial, the “sustain rate” would have jumped to 15%.
The more reliable measure of success at GAO is the “effectiveness rate,” which measures the percentage of cases in which the protester obtains “some form of relief from the agency” either as result of voluntary corrective action by the agency or GAO sustaining the protest. That rate remained unchanged at 43% in FY2014 (i.e., 42% of protests filed at GAO resulted in corrective action or a GAO sustain). In fact the “effectiveness rate” has barely moved in the past seven years.
So what conclusions can be drawn from the drop in the sustain rate combined with no change effectiveness rate? On their face, the new statistics appear to show that agencies are more willing to take voluntary corrective action in the face of a potentially meritorious protest. This ultimately may be good news for protesters, as corrective action is usually far cheaper to obtain than a sustained protest, and studies have shown that a protester’s chances of winning the contract after GAO sustains its protest are not much different than the protester’s chances of award following an agency’s voluntary corrective action.