INPUT Government Technology Market Blog

Encore II Awards, Take Two: the Protest Trend Raises Big Questions

Last Friday, The Defense Information Systems Agency (DISA) announced that it had made fourteen awards for their ENCORE II Information Technology Solutions contract for large businesses. Four of the awardees were companies that protested the original awards back in 2007, continuing the trend we have observed lately of companies that protest subsequently receiving awards on those contracts.

Without getting into the details of the merits of individual cases, several questions arise out of this emerging trend of protests on large contract awards:

  • Is Protesting Now a Business Strategy?
    Protesting your way onto large MACs seems to be working. But is this a long-term shift in business strategy or a short-term blip? It may be too early to tell. In fact, may likely take years to see what will be the bottom line impact of this emerging trend.

  • Can Government Avoid Protests with More Diligence?
    One argument in favor of a protest is that the government has in some way mishandled the competition, resulting in inequitable awards. So if government spends more time up-front to ensure a hyper-clean process will this effectively ward off the filing of a protest (or from it being sustained?) Or have procurements become so complex that protest-proofing a procurement is nearly impossible?

  • Do Protests Point to the Government's Human Capital Challenges?
    Is the Award/Protest/re-Award-including-the-Protesters phenomenon really highlighting the human capital issues in government contracting? And will the increased specter of a protest further strain government contracting staff to "get it right" the first time? And what does the future hold as the most experienced staff continue to retire?

  • Does the Pressure for Protest-Immune Awards Further Strain Contract Management Performance?
    With the increased scrutiny of how contracts are managed (and several examples of poorly performing contracts in the news,) will the increased pressure placed on government procurement professionals to avoid protests have an exacerbating negative impact on contract management once awarded?

  • Will Procurement Reform Legislation Increase the Pressure to Protest?
    Will legislation like the Consolidated Appropriations Act enacted last year limiting competitive sourcing further increase the pressure to get on the large MACs, thus increasing the likelihood of the "protest as a completion strategy" by companies? If the opportunities to win business decrease then the value of winning increases even more.

  • Will the Fear of Protest Actually Limit Opportunities?
    Could the fear of a protest actually lead the government to give up and cancel the procurement? When do diminishing returns kick in and it is more advantageous to just cancel the procurement than to try to figure out an acquisition strategy that wouldn't result in immediate protest(s) and/or defections by users of the new vehicle to use another contract?

These questions, and others, underscore the complex environment within which government procurement professionals and industry vendors operate together. And answers to these questions will need to be forged together.

Comments (Comment Moderation is enabled. Your comment will not appear until approved.)
In my conversations with vendor executives, I am hearing the question, "Is the historical aversion to contract protests changing?" My answer is that it increasingly is situational. On a full-and-open bid where the RFP is placed by the ultimate customer, a protest can still sour relationships. However, on the high stakes IDIQ vehicles, like ENCORE or Alliant, customer relationships may not come into play as much. As John stated, work is never won on these vehicles until the Task Order phase, so an end customer may not be impacted by a protest of the award of the original vehicle.

Protests are still expensive and can cause delays which impact potential partners as well as agency customers (which may be why IBM and Lockheed recently agreed to play nice on FBI's NGI). However, the emerging trend seems to be towards protesting when the customers with the dollars to spend aren't immediately impacted.
# Posted By Richard Colven | 5/5/08 4:38 PM