Government Contract Protest Process: Everything to Know
A government contract protest process arises when a party believes that the competitive bidding process for a government contract was violated.3 min read
A government contract protest process arises when a party believes that the competitive bidding process for a government contract was violated. The competitive bidding process for government contracts, whether at the state or federal level, contains standard steps regulating the way contracts are accepted and awarded.
These standards have either been developed over the years through government contract case law or can be created through statutes to ensure fairness in dealings between companies and the government. They also seek to establish that no partiality has impacted the final decision, for example through previous business dealings or, as can be the case, improprieties arising from favoritism or even graft.
Typical Competitive Bid Standards
Although the exact language in any government contract may vary, competitive bidding standards decree that:
•The bidding process is open to all parties and will be conducted in a transparent manner.
•All final decisions must be unbiased and based purely on the criteria established in the .
•All bidders are placed on an even playing field, meaning that all bidders must be treated fairly and judged on an equal basis.
For instance, RFPs may insist that hiring quotas based on race or gender be met by companies bidding on the project, specify certain construction materials that must be used on the project, or set requirements that small business subcontractors be included in all general construction contracts. If any of these standards are not met, the government has the right to automatically turn the bid down. The government can only waive any contract bidding standards if they are waived for all bidders, and in effect, the RFP is amended.
If on the other hand, the government fails to comply with the standards in the competitive bidding RFP when awarding the contract, then the resulting contract can be determined to be invalid or even illegal as a matter of contract law. If a party believes that it lost out on a contract because it was wrongfully awarded, that company has the right to file a government contract protest.
The Difference Between a Protest and a Dispute
In terms of questioning the awarding of a government contract, two processes apply. A party can either “protest” or “dispute” the contract according to government contract law. While on the surface there may seem to be little difference between the two options, in practice, they are not the same. It essentially boils down to the status of the party taking the action.
•A “protest” occurs when a party that has lost out on a bid files a claim that the contract was awarded unfairly.
•A party to a “dispute” is one that has been awarded a contract but has a disagreement with the contract officer who awarded the contract or specific terms in the contract.
Federal law provides for three levels of protest resolution. In regard to the first two, all protests must be filed no more than10 days after the wronged (alleged) party becomes aware of the basis for the protest. The levels are:
•A protest filed with the agency that awarded the contract in question. This is often the first step a company will take.
•A protest filed with the , which oversees all government contracts.
•A lawsuit filed in the United States Court of Federal Claims (USCFC). This is the highest level of protest available and most likely the costliest step.
Steps for Filing a Protest
There are two types of grounds for protest: pre-award and post-award. As their names imply, each occurs at a different stage of the bidding process.
•Pre-award protest grounds are based on the accusation that the RFP was unclear, biased against them, or unduly restrictive.
•Post-award protests are filed when it is alleged that the awarding agency did not follow established bid award criteria, showed favoritism or had a conflict of interest.
In order to file either type of protest, a party must establish that they are an “interested party,” meaning they have an economic interest in the outcome of the bid in question. In general, most protests are lodged after the contract has been awarded, even the government has terminated the contract.
Although both state and federal agencies take steps to guarantee that all bids for work or equipment are awarded fairly, there are bound to be instances where a party believes itself wronged. The government contract protest process gives their grievances a voice.
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