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What is a Bid Protest?

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  • Written By: Mary McMahon
  • Edited By: O. Wallace
  • Last Modified Date: 02 December 2016
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A bid protest is a procedure in which an interested party files a protest about the awarding of a government contract. Bid protests must follow a very specific procedure, and the government is obligated to respond to them as long as they are procedurally correct. Because the process can be quite complex, companies and individuals who plan to file a bid protest often choose to hire a lawyer who specializes in the procedure so that they can get the best chance at a hearing.

The government contract process is designed to allow people an opportunity to bid on the chance to provide goods and services to the government. The government is supposed to review all of the bids and choose the best one after evaluating their options. Ideally, this process is impartial and fair, but if competitors feel that someone has been or is about to be awarded a contract on spurious or questionable grounds, they are entitled to file a bid protest requesting review of the process.

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Once a bid protest is filed, it is reviewed to determine whether or not it is subject to dismissal. If the protest has been filed correctly and is complete, it will be reviewed and hearings will be held to give everybody a chance to air their side of the story. If the government deems that the contract was in fact awarded unfairly, it may be forced to reopen the bidding process, to pay penalties to the person or company which filed the bid protest, or to pay a fine.

People may find the awarding of a government contract unfair for a variety of reasons. In cases where open corruption has occurred, a bid protest might submit evidence such as proofs that decision makers took bribes or accepted favors, while in other instances, a company may believe that it was not given a fair chance during the bidding process. Bid protests may, for example, suggest that the government essentially created a no-bid contract by putting a contract up for open bid when they already knew which company would be hired for the job.

In order to file a bid protest, someone must be able to demonstrate an economic interest in the outcome of the bid. For this reason, protests are usually filed by companies which participated in the competitive bidding process and lost, or think that they are going to lose. The procedures for filing a protest vary, depending on the rules of the government and the policies of the specific agency involved; the rules are usually available to the public by request.

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bear78
Post 3

@burcidi-- They can't file a bid protest a second time, but they can appeal the first one.

If the party wants to appeal the GAO bid protest result, they can do that at a district court. If the decision was from a district court, I think they have to file the appeal with a higher court.

My friend is a lawyer who helps contractors file bid protests and he was telling me that there is a huge increase in protests.

A part of the problem is that contractors don't understand this whole process well enough. And I don't blame them, it can get complicated. But bid protests and appeals shouldn't be used to prevent other contractors from getting the job when the process has been run fairly. I think some contractors are unhappy with the increasing competition and have been resorting to bid protests because of it.

ysmina
Post 2

@burcidi-- The US Government Accountability Office (GAO) is the main agency that hears bid protests. I think it has been doing so for a long time. But sometimes bid protests are heard by other US government agencies, as well as US District Courts. For example, when the bid protest is about procurement, it can be protested at the Court of Federal Claims.

Different agencies can have different bid protest regulations, so there isn't a single answer to your question about deadlines. But it's a good idea to get it in as soon as possible. I would say that the interested party should get their protest in within ten days after bidding is over.

burcidi
Post 1

Is there a deadline in which the interested party has to get their bid protest in by? Or can it be done at any time during bidding or after bidding is over?

If the protest is not accepted, can the interested party file a second time?

And where exactly is the protest submitted? Is it submitted to the agency that is awarding the contract?

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