A bid protest is a procedure in which an interested party files a protest about the awarding of a government contract. Bid protests must follow a very specific procedure, and the government is obligated to respond to them as long as they are procedurally correct. Because the process can be quite complex, companies and individuals who plan to file a bid protest often choose to hire a lawyer who specializes in the procedure so that they can get the best chance at a hearing.
The government contract process is designed to allow people an opportunity to bid on the chance to provide goods and services to the government. The government is supposed to review all of the bids and choose the best one after evaluating their options. Ideally, this process is impartial and fair, but if competitors feel that someone has been or is about to be awarded a contract on spurious or questionable grounds, they are entitled to file a bid protest requesting review of the process.
Once a bid protest is filed, it is reviewed to determine whether or not it is subject to dismissal. If the protest has been filed correctly and is complete, it will be reviewed and hearings will be held to give everybody a chance to air their side of the story. If the government deems that the contract was in fact awarded unfairly, it may be forced to reopen the bidding process, to pay penalties to the person or company which filed the bid protest, or to pay a fine.
People may find the awarding of a government contract unfair for a variety of reasons. In cases where open corruption has occurred, a bid protest might submit evidence such as proofs that decision makers took bribes or accepted favors, while in other instances, a company may believe that it was not given a fair chance during the bidding process. Bid protests may, for example, suggest that the government essentially created a no-bid contract by putting a contract up for open bid when they already knew which company would be hired for the job.
In order to file a bid protest, someone must be able to demonstrate an economic interest in the outcome of the bid. For this reason, protests are usually filed by companies which participated in the competitive bidding process and lost, or think that they are going to lose. The procedures for filing a protest vary, depending on the rules of the government and the policies of the specific agency involved; the rules are usually available to the public by request.