Bid Protests Are Falling—Use AI to Keep Them Low

A decade ago, bid protests were treated like an unavoidable tax on federal procurement. But the latest numbers tell a different story: GAO recorded 1,688 bid protests in FY 2025, down from 1,803 in FY 2024—and down 40% since FY 2016. That’s not a rounding error. That’s a sustained shift.

Here’s the uncomfortable part for anyone pushing “loser pays” reforms: the data doesn’t match the narrative. If protests are already declining—and if agencies are still taking corrective action in a large share of cases—then punishing protesters broadly risks solving the wrong problem.

For leaders working in the AI in Government & Public Sector space, this matters for a practical reason: declining bid protests can be treated as an efficiency signal—and AI can help keep that signal trending in the right direction by spotting dispute triggers early, improving evaluation consistency, and making procurement decisions easier to defend.

The numbers don’t support the “everyone protests everything” myth

Answer first: Bid protests are down, and the system is already filtering out most claims without sustained rulings.

GAO’s FY 2025 bid protest data shows:

• 1,688 protests filed in FY 2025 (a 6% decrease from FY 2024)
• A 40% decline since FY 2016
• Only 53 sustained protests in FY 2025
• 327 denials
• An “effectiveness rate” of 52% (cases that result in either a sustain or corrective action)

That last figure—52%—is the one that should change how agencies talk about protests. People often cite “only a small number are sustained” as proof protests are mostly meritless. But agencies voluntarily taking corrective action is not a meaningless outcome. It often signals something closer to: “We see a risk here, and we’d rather fix it than litigate it.”

A line I’ve found useful when talking to procurement teams is this: A low sustain rate doesn’t mean protests are frivolous; it can also mean agencies are fixing issues before GAO has to.

If you want fewer protests without weakening oversight, the real goal isn’t “make protesting painful.” It’s “make awards more defensible.”

Why protests are declining—and what that implies for reform

Answer first: Process improvements are working, and broad punitive reforms could introduce new friction without reducing real risk.

GAO has pointed to several structural reasons protests have declined over the last decade:

• Enhanced debriefings for defense contracts (loss explanations + Q&A)
• Increased task-order protest thresholds
• A filing fee tied to GAO’s electronic protest docket system

This is the core lesson for modernization teams: transparency and structured feedback reduce disputes. When vendors understand why they lost, they’re less likely to assume the evaluation was arbitrary.

The “loser pays” concept is a blunt instrument

The FY 2025 NDAA asked GAO to examine changes that include shifting costs to unsuccessful protesters (government costs and the awardee’s costs). The argument: too many protests with no merit.

GAO pushed back, stating that existing authorities and procedures are sufficient to resolve and limit impacts from protests without a substantial legal or factual basis. GAO also noted that defense protests affect about 1.5% of DOD procurements, which supports the claim that “frivolous protest volume” is not the dominant problem.

My take: cost-shifting sounds efficient, but it can distort vendor behavior. If a small business believes it can’t afford the downside of filing, it may not protest even when the evaluation was flawed. That doesn’t reduce procurement risk. It hides it.

The better strategy is to reduce the reasons vendors protest—especially evaluation inconsistencies—rather than raising the penalty for speaking up.

The real protest drivers: evaluation quality, cost realism, and proposal rejections

Answer first: Most sustained protests trace back to evaluation discipline—not vendor “soreness.”

GAO highlights repeat themes behind sustained protests:

1. Problems with the technical evaluation
2. Unreasonable cost or price evaluation
3. Unreasonable rejection of a proposal

These are not exotic legal theories. They’re operational issues: documentation gaps, uneven application of criteria, unclear scoring logic, or cost realism assessments that can’t be defended.

Why this matters for AI and digital procurement

If you’re building an AI roadmap for procurement, don’t start with flashy automation. Start with the weak points that create downstream disputes.

A procurement team that can reliably answer, “Show me exactly why we scored Offeror A higher than Offeror B” is a team that:

• receives fewer protests,
• resolves protests faster when they occur,
• and maintains higher vendor trust over time.

That’s where AI fits—when it’s used as decision support and quality control, not as a black box judge.

How AI can reduce bid disputes before they become protests

Answer first: AI lowers protest risk by improving consistency, transparency, and early warning—especially in contract terms, evaluation documentation, and pricing signals.

Think of bid protests as a symptom. They often happen when vendors feel one of three things:

• the evaluation wasn’t consistent,
• the outcome wasn’t explained,
• or the solicitation/evaluation design created ambiguity.

AI can help with all three—if you implement it with guardrails.

1) Pre-award: detect ambiguity and dispute-prone terms

Many protests are seeded before proposals are even submitted.

AI-assisted review can flag:

• conflicting instructions across sections of a solicitation
• evaluation criteria that don’t match the requirement narrative
• pass/fail thresholds that are described inconsistently
• requirements likely to drive “unreasonable rejection” disputes (e.g., unclear compliance language)

A practical pattern is to use AI to produce a “protest risk checklist” for a solicitation—highlighting where language creates interpretation risk.

2) During evaluation: enforce scoring consistency and documentation quality

The most defensible evaluation is boring in the best way: consistent criteria application and complete records.

AI can support evaluators by:

• checking that narrative justifications map to stated criteria
• detecting when similar strengths/weaknesses are described differently across offerors
• prompting for missing documentation elements before the file is finalized
• summarizing evaluation notes into a standardized format for review

This is not about replacing evaluators. It’s about reducing human variability that becomes protest fuel.

3) Price and cost: identify outliers early

Unreasonable cost or price evaluations are a repeat protest driver.

AI models can help analysts:

• detect pricing outliers versus historical buys
• flag labor mix patterns inconsistent with the technical approach
• compare assumptions against known market signals (where permitted)
• identify where cost realism narratives need stronger support

Even simple anomaly detection is useful here. If the system highlights that an offeror’s staffing plan looks under-resourced relative to their performance claims, that’s a cue for deeper analysis—and better documentation.

4) Post-award: generate clearer debriefings (and reduce suspicion)

Enhanced debriefings are correlated with protest declines, particularly in defense. Agencies should treat this as a lesson, not a DOD-only quirk.

AI can help draft debriefings that:

• are consistent with the evaluation record
• answer vendor questions with less delay
• remove avoidable ambiguity
• maintain appropriate redactions while still being informative

Good debriefings don’t just reduce protests; they reduce the next procurement’s friction because vendors learn how to compete better.

A practical AI roadmap for procurement teams (that won’t backfire)

Answer first: Start with low-risk decision support, measure impact on protest drivers, then expand.

AI programs fail in procurement when they chase “automation” while ignoring governance. Here’s a roadmap that tends to hold up under audit and scrutiny:

Step 1: Map your agency’s protest drivers to workflow points

Use your own historical data (even if limited) to identify:

• which acquisition phases generate the most disputes
• which evaluation factors attract the most complaints
• which templates or contract types correlate with corrective action

Then prioritize AI use cases that reduce those specific drivers.

Step 2: Implement “quality gates” rather than AI decisioning

The safest and most helpful AI pattern is the quality gate:

• solicitation ambiguity scan before release
• evaluation documentation completeness check before award
• cost realism narrative validation before final sign-off

Quality gates improve defensibility without shifting authority away from humans.

Step 3: Build a defensible audit trail

If your AI tool flags a risk, capture:

• what it flagged
• who reviewed it
• what decision was made
• what evidence supported the decision

A procurement system that can explain itself is a procurement system that wins protests.

Step 4: Measure outcomes the way GAO does

Don’t just track “number of protests.” Track leading indicators:

• time to produce debriefings
• documentation completeness scores
• number of evaluation clarifications needed late in the process
• corrective actions taken (and why)

Bid protests are a lagging metric. Evaluation quality is the controllable metric.

What leaders should do in 2026: treat fewer protests as a modernization KPI

Answer first: Declining bid protests are a signal that process design is improving, and AI should be used to reinforce transparency and consistency—not to penalize dissent.

With the proposed FY 2026 NDAA not adding new directions on protests, agencies have breathing room to improve outcomes without major procedural upheaval. That’s an opportunity.

Here’s the stance I’d take going into 2026 planning cycles:

• Don’t overcorrect with punitive protest policy when the trendline is already down.
• Do invest in evaluation quality, debriefing maturity, and documentation discipline.
• Use AI where it reduces ambiguity and strengthens defensibility, especially in technical evaluation and cost/price analysis.

Bid protests hitting a decade-low isn’t a cue to declare victory. It’s a cue to keep doing what works—and to modernize the parts that still create avoidable disputes.

If your procurement team could get a “protest risk readout” before you release a solicitation or finalize an award, what would change in your process next quarter?