Recovery of Attorney Fees: Appropriate Deterrent or Welfare for Lawyers?

The Bid Protest Regulations of the U.S. Government Accountability Office (GAO) contain a powerful incentive for procuring agencies to obey the statutes and regulations. If a bidder successfully protests an agency action, the GAO may instruct the agency to reimburse the protester for the attorney fees incurred in the protest.

There are limitations on this recovery. The GAO only makes a recommendation to the agency, although it is almost always followed. Attorney fees are capped at $150 per hour, although small businesses are not subject to the ceiling and may recover fees at the actual billing rate, if reasonable.

It is common for successful protesters to recover tens of thousands of dollars in attorney fees. A recent decision by the GAO expands the scope of possible recovery. A disappointed bidder and its prospective subcontractor agreed to share the cost of a protest, with the protester reimbursing the sub for any attorney fees recovered from the agency. The protest was successful. The GAO recommended reimbursement of the protester’s fees and the fees incurred by the subcontractor, even though the sub was not a party to the protest.

What do you think? Is recovery of protester attorney fees an appropriate way to monitor and enforce agency compliance with the procurement regulations? Or is this really just a government subsidy for lawyers? I welcome your input.

Featured in Next Week’s Construction Claims Advisor:

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• Bid Listing of Subcontractor Did Not Create Agreement
• Damage Award Could Not Precede Finding of Breach

 

Comments

[Ron Cilensek]

In order to maintain a level playing field, recovery of attorney fees should be available to both parties. If the protesting party is unsuccessful, that party should be required to reimburse the government entity for their attorney fees.

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