A Proposed Rule published by the Government Accountability Office (“GAO”) in the Federal Register on April 15 contains one provision federal contractors will want to comment on:
Do you want to pay $350 to file a bid protest?
In the Proposed Rule, the GAO anticipates that it will establish an electronic system known as the Electronic Protest Docketing System, or EPDS. The EDPS will be the sole means for filing a bid protest at GAO (with the exception of protests containing classified information), and will enable parties to a bid protest and the GAO to file and receive documents. Protesters will have to pay a filing fee, which is anticipated at $350, and is based on “actual costs the GAO has incurred to develop [the EPDS], estimates of future costs,” and so on.
We all know that being a federal government contractor comes with additional costs not encountered in the private sphere – costs due to delays and extra work required, costs when a contract is terminated for convenience, costs to hire a professional to comply with federal laws and regulations. . .
These costs are somewhat offset by “perks” – free services available to contractors such as registration in federal databases including as SAM.gov and VetBiz, and access to certain resources.
Perhaps the biggest “perk” is the right to file a bid protest contesting improper award of a federal contract or defects with a solicitation. After all, a great deal of work goes into preparing a proposal for a contract opportunity, and such awards impact a business’ profit margins (or even livelihood). The venue of choice for contractors is often the GAO, which, right now, does not charge to file a bid protest.
I do understand the rationale for the GAO proposing to charge to file a bid protest. It is in fact expensive for the GAO to process such protests; and a fee may also reduce the number of frivolous protests.
I also, however, believe that the benefits are far outweighed by the drawbacks. First of all, why $350? Such a large amount is cost-prohibitive for many small businesses – it is rarely that expensive to file a formal lawsuit in most venues. Second of all, given the costs that contractors must incur due to government- caused issues in the performance of a federal contract, don’t they deserve to have this service provided for free? Third of all, if the government has improperly issued an award or has issued a defective solicitation, why should a contractor (literally) have to pay for the government’s mistake(s)?
Luckily, this is a Proposed Rule, meaning that it is not likely to become an implemented rule any time soon. Not only that, but it will take years for the EPDS system to become functional. Still, as a contractor, if you have an opinion on the imposition of this fee, make sure you submit your comment on or before May 16, 2016. (Comments may be submitted by email at [email protected] to the attention of Jonathan L. Kang). The complete Proposed Rule may be accessed here.
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