Companies seeking to capitalize on opportunities created by federal stimulus legislation through government contracts, grants, or loans should bear in mind that, at times, companies must fight for their rights under government programs.
Federal law provides a reasonably prompt and efficient process for companies to pursue their right to protest awards to their competitors—and also to resolve disputes that arise with the government after award and during (or after) performance.
In many situations, such matters can be favorably resolved through agency dispute resolution mechanisms and without full-blown court proceedings.
Bid Protest Process
The Government Accountability Office provides a forum for those concerned about the propriety of a contract award. In FY 2008, protesters filed 1,652 cases with the GAO, and the GAO reached a merits decision in 291 of those cases. In 60 of those cases (about 21 percent), the GAO sustained the protest. While not captured in the statistics, the filing of a protest can also result in voluntary agency action favorable to the protestor, such as a reconsideration of the award or a resolicitation of the work.
In general, the process begins with the filing of a written protest. The agency involved must then submit a report responding to the protest, and the protestor is then provided an opportunity to file written comments on the report. The GAO may also find that a hearing is necessary to resolve factual and legal issues raised in the protest. In FY 2008, for example, the GAO granted a hearing in about 6 percent of cases. Once the record is complete—and no later than 100 days from the date the protest was filed—the GAO will issue a decision.
Although the bid protest process is relatively informal, the deadlines for filing a protest are short—often ten days—and they are strictly enforced. Thus, potential contractors who believe they have been damaged by a violation of federal procurement laws should not hesitate to contact an attorney about their options.
A detailed description of the bid protest process is available at by visiting the GAO Web site or by clicking here.
Contract Disputes
Federal law also provides out-of-court relief for companies that win government contracts but then suffer damages because of breach by the government. Specifically, the Contract Disputes Act of 1978, 41 U.S.C. § 601–13, states that all claims by a contractor against the government shall be in writing and submitted to the agency's contracting officer for a decision. The contracting officer is then required to issue a decision on the claim, after which the contractor has 90 days to file an appeal of the decision with the appropriate agency board of contract appeals. These boards are required to conduct informal, expeditious and relatively inexpensive proceedings to resolve the disputes.
Generally, the parties may use discovery tools similar to those available in federal court, although they may opt for expedited proceedings that limit the amount of discovery possible. The parties are also entitled to a hearing and may choose or be required to submit prehearing briefs. Board decisions may be appealed to a U.S. District Court, although the board's findings of fact are usually conclusive. Of course, contractors may forego the appeals process altogether, and bring an action directly on their claims in the U.S. Court of Federal Claims.
In addition to the procedures described above, many agencies employ internal dispute resolution processes as well. Indeed, in recent years the federal government has shown a greater interest in alternative dispute resolution than had traditionally been the case.
When a bidding or performance issue arises, involving an experienced lawyer as soon as possible can be important, so that the best strategy for success can be identified and timely pursued.