In the latest Weekly Wright Report:
ASBCA Makes Headway
The Armed Services Board of Contract Appeals (ASBCA) released its annual report describing its case activity for FY 2018 on Oct. 10, 2018. It presented some mindful statistics for contractors wishing to pursue claims with the DOD.
- Of the 139 cases decided on the merits, the Board found merit in 69%.
- Demonstrating the success of the Board’s promoted ADR process, of the 420 cases dismissed, the vast majority were dismissed only after the parties reached an amicable settlement and there were 21 resolved utilizing the Board’s ADR process.
- Although the ASBCA started the year with 970 pending appeals, its total pending appeals decreased to 901 pending appeals which is considered the lowest level since Oct. 1, 2013.
- Contractors also requested expedited or accelerated appeals under Rule 12 for 20 appeals in FY18.
- Not surprising, the majority of cases still originate from contracts with the Army Corps of Engineers. USACE has the highest percentage of active appeals at 30.4 percent. The following table illustrates the breakdown of cases per agency:
Agency FY17 FY18
Army 138 75
Navy 77 93
Air Force 48 61
Corps of Eng. 161 127
DLA & DCMA 92 89
Other Agencies 8 20
- Out of 559 cases disposed of in FY18, including 129 decisions determined on the merits, only nine appeals were docketed with the Federal Circuit.
The process of pursuing claims from the government can be influenced by where you file. Your decision can be influenced by how you wish to handle discovery, the use of alternative methods of dispute resolution as well as the success of various issues before the various Board of Contract Appeals. Reach out to WCS’ Government Contracts group to discuss the relative merits before you make an election.
2018 GAO Bid Protest Annual Report
On November 27, 2018, the Government Accountability Office (“GAO”) issued its annual Bid Protest Report to Congress for Fiscal Year 2018. During 2018, the GAO received 2,474 protests. Of the protests resolved on the merits during 2018, only 15% were sustained. The most prevalent reasons for sustaining protests during 2018 were: (1) unreasonable technical evaluation – for example, finding that the agency unreasonably found the awardee’s proposal was technically acceptable, where the acceptable rating was contingent on remediation of several issues that were not remediated; (2) unreasonable cost or price evaluation – for example, finding that the agency’s evaluation and adjustment of direct labor rates for only those employees for which government verified rates were available was inadequate to assess the realism of the offerors’ cost proposals and (3) flawed selection decision – for example, finding that the selection official failed to demonstrate a reasonable basis for finding that awardee’s strengths to be beneficial while not finding similar strengths of protester to be similarly beneficial.
The GAO noted that a significant number of protests filed with the office do not reach a decision on the merits because agencies voluntarily take corrective action in response to the protest rather than defend the protest on the merits. Agencies are not required to report the reasons for deciding to take voluntary corrective action. The GAO also reported that its “Effectiveness Rate” for 2018 was 44%. The Effectiveness Rate is based on a protester obtaining some form of relief from the agency, as reported to the GAO, either as a result of voluntary agency corrective action or the GAO sustaining the protest. Of interest, the Report notes that alternative dispute resolution (“ADR”) was used in 86 cases and that the ADR process was 77% successful in resolving the cases. If you were looking forward to having your day in “court” regarding your protest with the GAO, don’t count on it, in 2018 the GAO conducted merit hearings in just 5 cases.
While the direct sustain rate at the GAO is low at 15%, perhaps the more accurate measure of results is the Effectiveness Rate, which reflects the percentage of time that a protester obtains some form of relief. Thus, protests result in some form of relief almost 50% of the time.
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