But, he observes, "Ironically, the protest lowered the overall costs to build the project." The design-build contract now stands at $615 million.
Bechtel fared better in fending off a challenge to its win of a $22.8-billion contract to manage and operate two huge nuclear weapons processing sites, Y12 in Tennessee and Pantex in Texas, for the U.S. Energy Dept.
Under construction at the Pantex site, which encompasses 1,500 acres, is a windfarm that is set to supply 60% of the complex's power needs. When completed this summer, it will be include five 2.3-MW turbines and be the larges wind energy facility on U.S. federal property.
The firm led a team for the 10-year award against the incumbent team, led by Babcock & Wilcox, which filed three headline-grabbing protests. Bechtel was B&W's partner during its original 12-year stint as site contractor but opted to team with Lockheed Martin for the follow-on award.
The challenges prompted the DOE to make additional reviews of competitors' cost-saving data and reassess the proposals. But on March 20, three weeks after GAO denied the B&W team's latest protest, the contractor ended its battle.
In a statement, the firm said it was "disappointed, as we believe our proposal, including revisions submitted after [GAO] sustained our initial protest, was the strongest choice, as originally determined by the Source Evaluation Board."
Disputes that don't make headlines also land in GAO's docket. In a March 21 decision, it denied a protest by TMG Construction, Purcellville, Va., against the U.S. Navy's roughly $14-million construction task-order award in a reprocurement, contending the service relied on "unreasonable and unrealistic price coefficients that were artificially manipulated to undercut TMG."
The rebid followed the competing firm's protest, in 2013, of TMG's original win. But GAO rejected the firm's argument against oveturning its award and seeking new bids because "the winning offeror's price has already been disclosed."
TMG President Tonya Matthews says, "This one's over, and we're moving on to positive work. Protesting contract awards is not part of our business strategy."
McGoldrick Construction Services Corp., a $10-million San Antonio firm, challenged the Corps of Engineers' assessment of so-called "weaknesses" in its proposal for construction task-order contracts at Fort Hood.
The firm was one of 56 offerors for the awards. In a March 28 ruling, GAO said McGoldrick was "prejudiced" by the Corps' rating of the firm's proposals and ordered a reevaluation. GAO also ordered the Corps to reimburse protest-pursuit costs, but the firm did not end up winning the work.
Firm President Patrick McGoldrick could not be reached, but its attorney Douglas L. Patin says the firm "felt the reasons given in the debriefing were not based upon anything a reasonable contractor would have to cover in its proposal."
He notes an upswing in protests from smaller contractors. "You have intensive competition on the private side, so many folks are going to federal work," says Patin. "But as that market share shrinks, getting an award could be a substantial factor in whether a firm can survive."
Agencies say they're trying to be more responsive. "I think [contractors] know that if we do take a protest to court, it's because we really believe we got the answer right," Naval Facilities Engineering Command Chief Engineer Joseph Gott told ENR in a 2011 interview. "We win most protests because we don't want to try a bad case. If you have to fight it, you lose 100 days off the job, at a minimum."
According to attorney Hoe, GAO is pushing more use of alternate dispute resolution approaches such as so-called "outcome prediction.' He says, "if parties agree before the GAO process is completed [in the allotted 100 days], agency officials will get on the phone with the contracting agency and protestor and offer its prediction of how the dispute is likely to end."
He adds that some agencies, such as the U.S. Air Force, have begun to use "extended debriefings." Under the approach, says Hoe, the protest clock won't start until a protesting firm is satisfied on key issues of dispute, allowing more time to understand all the issues.
He says that in the 43 cases where GAO has accommodated such debriefings, the contractor decided not to file a protest in 38. The Air Force is the only agency using the approach but could not be reached.
Protests in state and local procurements is the latest arena of change. "There is great frustration by contractors due to the lack of an effective bid-protest system in many states," says Jonathan Shaffer, a construction and contracts attorney with Smith Pachter McWhorter in Tysons Corner, Va.
"With a few notable exceptions, many states fail to provide mandatory debriefings, an automatic stay of award or performance, access to the relevant records and effective remedies. Few states have any dedicated bid-protest forum."
"As a result," he adds, "there is no special government procurement expertise by independent decision-makers and no well-developed body of procurement law." Shaffer notes more action in disputes related to "organizational conflicts of interest" as governments weigh public-private partnerships that involve large teams of consultlants and contractors.
Florida, Arizona and Utah DOT spokespersons say they have bid protests under control, although the latter paid a losing proposer $13 million to end its 2009 protest on a $1.1-billion best-value highway-expansion contract.
John Njord, former UDOT executive director, noted then, "This was the right business decision."
But others expect more use of subjective best-value and alternative procurement approaches to generate additional protests. "It's much easier to protest a procurement when there are intangibles involved," says Robert Dennison, New York regional transportation chief at engineer VHB and former state DOT chief engineer.
Luis Ventoza, COO of civil infrastructure at PCL, adds, "Some agencies are not as transparent on their scoring process as they could be." But Robert Naftoly, executive vice president of Dedham, Mass.-based contractor SPS New England, believes best-value contracts in Massachusetts are harder to protest.
Gordon also sees developing bid-protest management challenges outside of the U.S.
Among European Union nations, protests "are relatively new, and countries like the U.K. and Germany are suddenly facing more than 1,000 a year—and they are finding that challenging," he says. "I have looked at many systems but never found one that balances the complaining bidder's rights (and the broader interest in protecting procurement system integrity) against the need for efficient procurements as sensibly as the U.S. system does."
Meanwhile, GAO is pushing to meet congressional orders to beef up its system with the development of a new, web-based docket system that would allow public access to all documents related to pending protests, says Ralph O. White, GAO managing associate general counsel.
The agency isn't likely to have the system up until next fiscal year since "this is not a year for the government to have problems with a web portal," says one official. Its operation would be offset by a first-time protest filing fee, which has not been set. White says the Court of Federal Claims charges $400 for a bid protest filing.
Timothy Sullivan, chair of the government contracts group at Thompson Coburn LLP, says that firms deciding to protest "should focus on the facts and the law, your relationship with the agency, your commitment to your team of subcontractors and the potential expense. All these factors must be weighed in a very short period of time, which means considerable pressure."