Bid Protests- Alternative Dispute Resolution (ADR)

A disappointed offeror or “protestor” can choose Alternative Dispute Resolution (ADR), as a means of resolving a protest involving an agency’s award of a federal government contract.  ADR can be implemented at any of the three forums where a contract award can be protested: the agency-level, the Government Accountability Office (GAO), or the Court of Federal Claims (COFC).

The ADR process can help to streamline a protest by identifying issues that might exist in each Parties respective position. This article is meant to serve as a brief overview of the ADR process in each forum.

ADR in an Agency-Level Bid Protest
Agency-level bid protests originated with President Clinton’s Executive Order 12979, issued in 1995.  Executive Order 12979 directed agencies to “prescribe administrative procedures for the resolution of protests to the award of their procurement contracts as an alternative to protests in fora outside the procuring agencies.”  Executive Order 12979, Sec. 1.  The Executive Order emphasized that agency-level protests should “to the maximum extent practicable, provide for inexpensive, informal, procedurally simple, and expeditious resolution of protests, including, where appropriate and as permitted by law, the use of alternative dispute resolution techniques, third party neutrals, and another agency’s personnel.”  Id. at Sec. 1(b).

FAR 33.103, entitled “Protests to the agency,” implements Executive Order 12979 and includes many of the details regarding filing deadlines, required information, etc.  Review of FAR 33.103 is a must for any contractor considering filing an agency-level protest.  Potential protesters should also review agency specific guidance, if available.

An agency-level protest is intended to be informal and non-adversarial.  FAR 33.103(b) encourages “open and frank” discussions between the parties.  It is not intended to be an adversarial, litigation-focused process like the other protest fora.  FAR 33.103(c) also encourages the parties to engage in ADR to resolve the protest issues, although, use of another agency’s personnel through the ADR process will be determined by the agency in question.  For instance, the Federal Aviation Administration has set up the Office of Dispute Resolution for Acquisition (ODRA) to adjudicate agency-level protests. In that forum, using ADR helps to narrow the relevant facts and law to help the protestor to make a rational business decision about whether to continue pursuing their protest.

ADR at the GAO
At the request of a party or on its own initiative, the GAO may use flexible alternative procedures, including, for example, establishing an accelerated schedule and/or issuing a summary decision, to resolve any protest. 4 C.F.R. § 21.10(e). This provision is intended to provide a flexible, accelerated protest resolution procedure at the GAO that will minimize disruptions to the procurement cycle. In addition, the GAO may use ADR procedures at the request of one or more of the parties, or where the GAO deems appropriate. This may take the form of negotiation assistance either before or after a protest is filed, or outcome prediction, where the GAO will advise the parties of the likely outcome of the protest in order to allow the party likely to be unsuccessful to take appropriate action to resolve the protest without a written decision.

A GAO attorney generally will not conduct ADR in the form of outcome prediction unless the parties indicate in advance a willingness, if identified as the likely unsuccessful party, to take appropriate action to resolve the protest–typically, corrective action by the agency, or withdrawal of the protest by the protester. The GAO attorney will discuss these and other matters with the parties in determining whether a case is appropriate for ADR.

In terms of timing, a GAO protest typically won’t be ripe for ADR until the government has had a chance to respond to the protest, which is often halfway into the GAO’s bid protest resolution timeline of 100 days. Essentially, there is a limited window to decide whether to seek ADR if a party is to derive the benefit of a quicker protest decision.
Since the ADR provided by the GAO is unique to that forum, contractors and practitioners should keep the following tips in mind:

• ADR does not toll the requirement in the Competition in Contracting Act (CICA) that the protest be resolved within 100 calendar days.
• The parties may request ADR, or the GAO may decide to offer it on its own.
• The GAO attorney who conducts the ADR will be the same attorney who writes the final decision if the ADR fails.
• ADR is generally provided orally and may not be recorded.
• It may be helpful for contractors or clients to participate in ADR; however, the parties should be mindful of limitations imposed by protective orders.
• ADR may be used in a protest, request for reconsideration, or cost claim.
• The GAO may provide partial ADR at the discretion of the GAO attorney if some, but not all, of the protest issues are appropriate for resolution through ADR.
• In addition to the three types of ADR (outcome prediction, litigation risk, and negotiation assistance), a GAO attorney may, at any time, provide informal feedback regarding the protest issues.
• ADR at the GAO is a flexible process that may be tailored to the individual circumstances of each protest, so communication with the GAO attorney handling the protest is essential.

With Outcome Prediction ADR, the GAO attorney will inform the parties of what he or she believes the protest decision will be. The losing party can then decide whether to withdraw/take corrective action or continue with the protest. Outcome prediction may involve an entire protest or certain issues of a multi-issue protest. The single most important criterion in outcome prediction is the GAO attorney’s confidence in the likely outcome of the protest.

With Litigation Risk ADR, the GAO attorney will identify risks with respect to the positions of each party to the protest. Generally, this type of ADR is less formal than outcome prediction and can be conducted at an earlier stage in the protest.

Finally, in Negotiation Assistance ADR, the GAO attorney will assist the parties with reaching a “win/win” situation. This type of ADR usually occurs with protests challenging a solicitation term or a cost claim.

ADR at the COFC

Although the COFC has an automatic ADR referral program in place, the program does not apply to bid protests.  See COFC General Order No. 44.  This order, however, does not foreclose the use of ADR.  Instead, it means simply that court personnel are not automatically available for ADR, and the parties may elect its use just as the parties are free to engage in unassisted settlement discussions. If both parties elect to use ADR, then the trial judge will re-assign the case to an ADR judge. If the ADR process is not successful, the case will return to the original trial judge.

ADR before the COFC is often seen before a case is even docketed. Often, the Department of Justice reaches out to a protestor or to the government agency within 24-hours of receiving notice that a bid protest will be docketed before the COFC. While not a neutral party, the attorneys from the DOJ will often point a protestor or the agency to flaws in their case, which can lead to these cases settling or being voluntarily dismissed before getting docketed with the court.