The ongoing battle by the Boeing Corporation to try to overturn the Air Force’s decision to award a $35 billion tanker refueling contract to Northrop Grumman has led to an evaluation of the entire procurement appeals process. A May 23 article by Richard Lardner, an Associated Press reporter, cited efforts by both Congress and the Pentagon to curtail the whining by contractors that lose bids. The Senate Armed Services Committee “raised the possibility of fining companies that submit ‘frivolous or improper’ protests to the GAO.” The article noted that the committee’s May 16 report suggested that contractors should be discouraged from “lodging protests as a ’stalling or punitive tactic.’” Undersecretary of Defense for Acquisition John Young recently wrote a memo to the service chiefs in which he said that “Protests are extremely detrimental to the warfighter and the taxpayer.” He previously stated that it “is going to be dangerous to set aside valid source selections on a political basis. Do we have the California delegation kill a program because the Georgia delegation won? I don’t know where this stops.”
The House Armed Services Committee wants the Government Accountability Office (GAO) to review all the protests related to defense contracts over the past five years, and provide recommendations on how to stop the biggest complainers. There could be financial penalties, or a list of those who protest too much so acquisition officials are aware of their track record.
While the procurement system should allow protests, the concerns about abuse are legitimate. In addition to delaying needed modernization of Pentagon weapons and equipment, the GAO is facing a higher volume of contract protests and has asked for a $40 million increase in its budget to respond. The AP article notes that “In 2007, the GAO received 1,318 protests, 48 more than in 2006 and 234 more than in 2001. The bulk of the cases were related to defense contracts. About one quarter of the 2007 total got as far as an official decision. In more than 70 percent of those cases, the office sided with the government and denied the complaint.”
Contractors should protest if they must, but they should think twice about protesting too much.
Filed under: Pork
