1. © 2012 Noblis, Inc. Noblis proprietary Federal Procurement Protests Risk Management presented by Paul R. Astiz Principal, Enterprise Services Mission Area April 18, 2012

2. 2 © 2012 Noblis, Inc. Noblis proprietary Introduction  Federal acquisition protest can significantly impact a government program  The impact is greater if the protest is sustained  A protest can put a program several months behind schedule and may result in significant additional costs Objective— Provide a basis for understanding and managing protest risks

3. 3 © 2012 Noblis, Inc. Noblis proprietary Agenda  Protest Statistics  Protest Types/Protest Outcomes/Protest Timeline  Risk Management  Risk of Having a Protest  Risk of Having a Protest Sustained

4. Protest Statistics

5. 5 © 2012 Noblis, Inc. Noblis proprietary GAO Protest Statistics TotalMeritSustain Merit/ Total Sustain/ Merit Sustain/ Total FY2002 12042564121.26%16.02%3.41% FY2003 13522905021.45%17.24%3.70% FY2004 14853657524.58%20.55%5.05% FY2005 13563067122.57%23.20%5.24% FY2006 13272517218.91%28.69%5.43% FY2007 14113359123.74%27.16%6.45% FY2008 16522916017.62%20.62%3.63% FY2009 19893155715.84%18.10%2.87% FY2010 22994418219.18%18.59%3.57% FY2011 23534176717.72%16.07%2.85% Source: WWW.GAO.GOV – Annual Reports to CongressWWW.GAO.GOV

6. 6 © 2012 Noblis, Inc. Noblis proprietary Volume Trends

7. 7 © 2012 Noblis, Inc. Noblis proprietary Merit/Sustain Trends

8. Protest Types/Protest Outcomes/ Protest Timeline

9. 9 © 2012 Noblis, Inc. Noblis proprietary  An award or proposed award of a contract/task order  Solicitation or other request by a federal agency for offers for a contract for the procurement of property or services  The cancellation of such a solicitation or other request  A termination of such a contract, if the protest alleges that the termination was based on improprieties in the award of the contract Protest Types

10. 10 © 2012 Noblis, Inc. Noblis proprietary  Withdrawn  Dismissed Technical or procedural reasons ─Timeliness ─Jurisdiction Agency takes corrective action  Denied  Sustained Protest Outcomes

11. 11 © 2012 Noblis, Inc. Noblis proprietary  Solicitation protests – Must file prior to bid opening or initial proposals due dates  Other protests – No later than ten calendar days after basis of protest is known or should have been known (whichever is earlier) If debriefing is requested, then 10 days after debriefing  GAO may consider untimely protest if it determines that protest raises issues significant to the procurement system  Agency must file report to GAO with 30 days  Deadline for GAO to reach a decision within 100 days Protest Key Deadlines

12. Risk Management

13. 13 © 2012 Noblis, Inc. Noblis proprietary Risk Management Risk  Impact  Likelihood Protest risks  Having a protest  Protest sustained Impact  Delays in procurement results in program delays Program delays result in higher costs to an agency Will impact dependencies of program  Cost of defending the protest  Costs of corrective action Re-issue the solicitation, re-evaluate, re-open discussions  Cost of extending older contracts  Political fallout

14. 14 © 2012 Noblis, Inc. Noblis proprietary  Avoid risk  Transfer risk  Accept risk  Mitigate Reduce impact Reduce likelihood Risk Management Strategies

15. Risk of Having a Protest

16. 16 © 2012 Noblis, Inc. Noblis proprietary  Plan for protest and for protest being sustained  Budget Contingency fund Fiscal year boundary  Schedule Possible 100 days delay More than 100 days if sustained Dependencies  Internal resource availability  Prepare for contract extensions Impact on budgets  Don’t put the program on hold Consider program activities not affected by outcome of protest Reducing Protest Risk Impact

17. 17 © 2012 Noblis, Inc. Noblis proprietary  Reduce likelihood of protest Understand why vendors protest  Reduce likelihood of sustained protest Understand why protests are sustained Reducing Protest Risk Likelihood

18. 18 © 2012 Noblis, Inc. Noblis proprietary Why Do Vendors Protest? Reasons Reasons  Decision maker expects to win  Government makes mistakes  Delay the award - Incumbents  Yelling at the referee (next competition)  Prove we did everything possible  Confusion over award criteria  Poor debrief  Protest as a matter of policy  Expectations of a side agreement  Obtain competitive Intelligence  Hurt the winner  Steve Roemerman (Lone Star Aerospace) 2010 Informal Survey Why DOD contractors file protest? Survey of vendors and government officials (59 participants) Source: Defense AT&L, November-December 2010

19. 19 © 2012 Noblis, Inc. Noblis proprietary Why Do Vendors Protest? Environmental Factors Environmental Factors [not reasons, but conditions]  No new procurement in sight  Marketplace decline Desperate times call for desperate actions  Government spends too much time and efforts trying to prevent a protest  Decline of experience among government staff  Poor government communication leads to suspiciousness Award criteria poorly communicated Debrief is delayed without explanation CO missteps  Poor legal advice from retained counsel Source: Defense AT&L, November-December 2010

20. 20 © 2012 Noblis, Inc. Noblis proprietary Why Do Vendors Protest? Another Perspective  Analysis conducted by RAND Corporation on Air Force protests  Analysis of various Air Force procurement databases, GAO case outcomes, and Federal Procurement Data Systems-NG  Government makes mistakes Faulty evaluations (62 percent) ─Inconsistent with rules, regulations, policies, procedures, or RFP performance parameters Faulty sourcing decision (18 percent) ─Variety of reasons (sole source, small business, etc.) Faulty RFP (17 percent) ─Unfairly disadvantage vendor’s ability to respond ─Restrictive specifications/requirement favor one/some over others Faulty/unfair treatment of offerors (8 percent) ─Faulty determination of out of competitive range ─Improper closed discussions, with some bidders ─Faulty determination to exclude proposal from consideration Source: RAND® Corporation - Defense Analysis of GAO Bid Protests in Air Force Source Selections Over the Past Two Decades, 2012 http://www.rand.org/content/dam/rand/pubs/technical_reports/2012/RAND_TR883.pdf

21. 21 © 2012 Noblis, Inc. Noblis proprietary Reducing Likelihood of a Protest Government makes mistakes  “ …day wise and month foolish… ”  Team knowledge/experience  Process/process discipline  Train/educate evaluation team  Avoid us vs. them mentality Communication  Confusion over evaluation criteria Solicit industry input Less is better in Section M ─Simplify evaluation criteria ─Avoid including rating method - FAR 15.304(d)  Award/debrief Timely notice of award/non-award Timely debriefing Method of debriefing  Communicate accurately Treat vendors fairly

22. Risk of Having a Protest Sustained

23. 23 © 2012 Noblis, Inc. Noblis proprietary  Evaluation and Source Selection  Price and Cost Evaluations  Discussions  Past Performance Why Are Protests Sustained? Selected Cases—GAO Decisions Source: GAO Bid Protest Overview, Dec/2009, Selected Recent GAO Bid Protest Decisions, Aug/2007

24. 24 © 2012 Noblis, Inc. Noblis proprietary  Did the government adhere to procurement laws and regulations?  Did the government adhere to the solicitation?  Was the government consistent with its evaluation?  Was the government fair and reasonable in its evaluation and decisions? Key Principles for Rulings

25. 25 © 2012 Noblis, Inc. Noblis proprietary Evaluation and Source Selection Decisions Unsupported evaluation and selection decisions  Source selection decisions and rationale are required to be documented  Rationale must be consistent with solicitation stated source selection strategy, factors, and weight of factors  Must be factual, consistent, supported by findings, and adequately documented  Must be reasonable Relaxation of requirements  Offeror’s must be informed and given an opportunity to change their proposals if requirements are changed or relaxed Failure to follow solicitation evaluation criteria  Must evaluate on what was stated in the solicitation  Use and apply consistently the criteria specified in the solicitation Unequal treatment/bias  Giving strength to one offeror for something and not another for the same thing  Giving a weakness to one offeror and not another for the same thing  Providing information to one offeror and not another  Source Selection Official’s decision to reject evaluator’s recommendation must have reasonable basis

26. 26 © 2012 Noblis, Inc. Noblis proprietary Price and Cost Evaluation Decisions  Price/cost evaluation must be reasonable and meaningful Consider all elements of price in the context of how they may apply; e.g., If price for location then evaluate all locations and not just some Reasonable basis for determining overall cost to the government; e.g., don’t consider only certain unit prices and not others without reasonable basis Cost Realism - Consistent with accounting standards  Adjusting vendor’s prices for comparison purposes without verifying with the vendor the assumptions/reasons for doing so  Lack of justification for higher price/technical superiority decision Give adequate consideration to similarity of approach Ensure technical superiority is adequately justified  Can not exclude technically acceptable proposal from competitive range based on technical rating without considering price

27. 27 © 2012 Noblis, Inc. Noblis proprietary Discussions Decisions Offerors must be treated fairly and equally  Provide offerors the same opportunity to revise technical or price proposals  Provide the same information to all offerors  Affording one offeror different submission leeway not stated in the solicitation and not offered to others Discussions must be meaningful  Discussions can not be meaningful if the offeror is not advised of significant weaknesses or deficiencies that must be addressed in order for its proposal to be in line for award  Discussions are not meaningful if they are limited to cost without addressing significant weaknesses and deficiencies identified in the technical proposal Proper and Not Misleading  Adequately convey to the offeror the findings and concerns so that they can be understood and acted on  Inform of concerns in one area and not in another which is also of concern and may make the proposal unacceptable

28. 28 © 2012 Noblis, Inc. Noblis proprietary Past Performance/Experience Decisions  Evaluation must be consistent with evaluation criteria  Evaluation must be reasonable in its consideration of relevant experience  Can not downgrade past performance evaluation based on lack of relevant past performance Grade as neutral if no relevant past performance  Equal effort must be applied to contact references Reasonable conclusions for past performance if contact is not reached

29. 29 © 2012 Noblis, Inc. Noblis proprietary... things to keep in mind...  Fair and equal treatment of offerors  Consistency across all aspects of the process  Source selection decisions are required to be documented Factual and supported by findings Adequately supported best value trade-off decisions  Evaluation must be reasonable and consistent with solicitation  Price Evaluation Reasonable and meaningful price evaluations consistent with accounting standards Adequate consideration of price and technical In Summary...

30. 30 © 2012 Noblis, Inc. Noblis proprietary Reducing Likelihood of a Protest Sustained  Clear and documented source evaluation process and procedures  Train/Educate Evaluators Reasons why protests are sustained Evaluation process/procedures Identifying/Documenting findings & Justifying ratings  “…day wise, month foolish…” Allow adequate time to familiarize evaluators with proposal Evaluation time consistent with size and complexity of solicitation Take time to prepare discussions/communication with offerors  Use acquisition support tools  Use consultants/experts to support evaluation and guide the process  Use technical SMEs in support of price analysis  Compare proposals  Embrace risk management

31. Protest Denied!!!