The Karenina Principle and the Pathology of Administrative Appeals: A Chiropractic Approach to Improving DOD Acquisitions

Abstract

What do appeals of administrative decisions tell us about the processes that give rise to them? Bid protests of Department of Defense source selections are illustrative. Rejected bidders can appeal to the Government Accountability Office. GAO sustains protests – few, but costly and growing – on grounds of procedural irregularity. Applying concepts from organizational economics, conflict management, and dispute systems design, we explore misalignments among management practices within agencies that can contribute to procedural errors and, thereby, to appeals. A conflict management audit, including interviews with participants in the process and analysis of GAO’s bid protest decisions, identifies sources of conflict in misalignments among strategy, structure, human resources, policies and procedures, and monitoring. Strategically adjusting the decisions to contract out, expanding authority and responsibility for risk management, creating professional development opportunities, revisiting policies on bundling and duration of contracts, and using performance information to incentivize the workforce can mitigate bid protests.

Keywords: procurement, public management, protests

JEL Classification: H10, H57