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The Honolulu Advertiser
Posted on: Monday, May 26, 2008

Panel seeks to limit contractor protests

Associated Press

WASHINGTON — Quit complaining.

That's the message from the Pentagon and Congress to defense companies that cry foul when they don't win contracts.

Resolving the protests costs the government time and money. That means it can take longer to build needed combat gear or buy critical supplies, making U.S. troops and American taxpayers the real losers.

Military spending has increased dramatically since 2001, and so have the challenges to procurement decisions made by the Defense Department.

It's become a big enough problem that the House Armed Services Committee has raised the possibility of fining companies that submit "frivolous or improper" protests to the Government Accountability Office. Complaining has become too reflexive, the committee says in a May 16 report, and it wants to discourage contractors from lodging protests as a "stalling or punitive tactic."

"Protests are extremely detrimental to the warfighter and the taxpayer," John Young, the Pentagon's acquisition chief, wrote last year in a memo to the secretaries of the military branches.

The GAO, the investigative arm of Congress, is seeking a nearly $40 million increase to its budget from last year's level of $507 million. Comptroller General Gene Dodaro, the office's top administrator, told a Senate subcommittee in late April the boost is needed to deal with a steadily growing workload that includes a greater number of contract protests.

Determining a frivolous or vindictive protest from a legitimate one is tricky business, though. In February, the Air Force selected a European-led consortium for a $35 billion contract to build aerial refuelers. Lawmakers who backed the competing bid by the Boeing Co. cheered the Chicago-based company's move to challenge the choice.

Boeing has argued the Air Force changed its method for evaluating the tanker it wanted after asking for proposals. That allowed a larger tanker offered by the European Aeronautic Defence and Space Co. and its U.S. partner, Northrop Grumman Corp., to beat Boeing's offer, the company said.

For the Air Force, which must await GAO's call before moving ahead with the contract, Boeing's complaint delays the replacement of KC-135 tankers that have been in the fleet for decades and cost about $15,000 an hour to fly.

A ruling from the GAO on Boeing's protest is expected next month. The odds are not in Boeing's favor.

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.