Gordon Rees Scully Mansukhani presents the latest insights from our Government Contracts group, offering a comprehensive overview of recent significant decisions, regulatory changes, and essential updates for businesses contracting with federal and state governments. Our team compiled the most pertinent legal developments to keep you informed in the dynamic landscape of government contracts.
Tune in to The Essential GovCon Brief podcast on Spotify or YouTube for an in-depth discussion of the issues highlighted here.
Agency Update
GAO Proposes Enhanced Pleading Standards, Rejects Fee-Shifting in Bid Protest Reform Proposal
In response to a congressional mandate set forth in the National Defense Authorization Act for Fiscal Year 2025, the Government Accountability Office (GAO) recently submitted a comprehensive proposal addressing potential reforms to its bid protest process. The proposal evaluates three areas: (1) enhanced pleading standards for protesters; (2) benchmarks for average protest costs and contractor lost profits; and (3) mechanisms for requiring unsuccessful protesters to pay those costs.
GAO’s data shows a significant decline in bid protest activity over the past decade. Overall filings have dropped 32% since FY 2015, and Department of Defense (DoD)-related protests are down 48%. Between FY 2020 and FY 2024, only 1.58% of DoD unclassified procurements were protested at GAO.
In its proposal, GAO supports clarifying and modestly strengthening its pleading standard. Under the proposed standard, protest allegations must be credible and supported by sufficient evidence that, if uncontradicted, shows a likelihood of improper agency action. This would apply to all protests, not just those involving DoD.
However, GAO was unable to produce reliable cost benchmarks due to a lack of available data. DoD confirmed that it does not track litigation or programmatic costs related to protests and does not collect data on contractor lost profits. Efforts to gather profit rate data from industry groups also fell short, with limited responses and concerns about disclosing proprietary information. GAO concluded that meaningful benchmarks cannot be established without legislative action requiring DoD and contractors to collect and report this information.
Finally, GAO declined to endorse any fee-shifting mechanism that would require unsuccessful protesters to pay costs incurred by DoD or awardees. The agency warned that such a system could chill legitimate protests, especially by small businesses, which accounted for more than 60% of filings from FY 2020 to FY 2024, and reduce competition in federal procurements. GAO also raised concerns about administrative burden, fairness, and potential harm to its own neutrality if it were required to recover protest costs.
Congress may consider two alternative approaches suggested by GAO, including a contract clause permitting DoD to withhold profits or fees from incumbent contractors who file unsuccessful protests or a statutory process enabling GAO to recommend reimbursement of specific costs. However, GAO emphasized that both would require substantial statutory and administrative changes and reaffirmed that its current authorities are sufficient to manage frivolous protests efficiently.
Learn more on GAO’s website.
Recent Cases/Decisions
COFC Permits Siemens to Pursue $2.9M in Bid Prep Costs for Cancelled Energy Project in Germany
The U.S. Court of Federal Claims (COFC) has allowed Siemens Government Technologies, Inc. to move forward with a lawsuit seeking nearly $2.9 million in reimbursement for costs it incurred while preparing a bid for an energy project at Spangdahlem Air Force Base in Germany. The project was ultimately cancelled after years of delays and conflicting guidance from the government.
Siemens had been selected by the Army Corps of Engineers (USACE) to develop a proposal under a federal energy savings contract. The project was intended to reduce energy use and increase renewable energy at the base. Siemens spent years preparing detailed assessments and energy audits, investing millions in design work, data collection, and coordination with both U.S. and German officials.
Problems arose when Siemens received inconsistent directions from USACE, particularly around labor requirements under a U.S.–Germany agreement (known as ABG-75). Despite early warnings from Siemens, government officials delayed confirming whether German labor rules would apply, which ultimately doomed the project. After submitting three versions of its proposal, Siemens was informed that the project was canceled.
Siemens sued to recover its preparation costs, arguing that the government acted unreasonably and misled them. The government tried to dismiss the case, claiming Siemens had no legal grounds to be reimbursed, but the court disagreed, finding that Siemens made a plausible case that the government’s handling of the project, particularly its delay in confirming key labor requirements and failure to provide needed energy data, was arbitrary and unfair.
The court also rejected the government’s argument that Siemens was barred from bringing its claim under federal procurement laws. Because Siemens was not trying to undo the project cancellation but merely seeking to recover out-of-pocket costs, the court found those laws didn’t apply.
This ruling doesn’t mean Siemens has won the case, but it clears the way for the lawsuit to proceed toward trial.
Citation: Siemens Government Technologies, Inc. v. United States, No. 22-1870, 2025 WL 2101291 (Fed. Cl. July 25, 2025).
GRSM Government Contracts Practice Group
GRSM’s Government Contracts team has considerable experience defending and enforcing the rights of our contractor clients in disputes against government entities and private businesses. In addition to litigating claims in state and federal courts, we routinely handle matters before administrative tribunals, such as the Government Accountability Office, the Small Business Administration, and the Armed Services Board of Contract Appeals.
Our team of attorneys is located throughout the United States, which allows the firm to represent contractors, regardless of size, and in a wide variety of industries, including defense, information technology, construction, and aerospace, among others.
Please contact Patrick Burns, Meredith Thielbahr, and Jeremy Camacho for further information or with any questions.