Government Contracts

As of December 2016 Congress has (again) revised the law about which civilian agency task order and delivery order (TO/DO) awards can be protested. Bidders who may want to protest such awards (or fend off such protests) need to know the new rules.

Civilian TO/DO Awards over $10 Million

On September 30, 2016, the Government Accountability Office’s (GAO) jurisdiction over protests against most types of civilian TO/DO awards lapsed, leaving many disappointed bidders without protest remedies. To fix this problem, on December 14, 2016 President Obama signed the GAO Civilian Task and Delivery Order Protest Authority Act of 2016 (Civilian TO/DO Protest Act). This law restored GAO’s exclusive authority to hear protests involving civilian agency TO/DO awards over $10 million, and made such jurisdiction “permanent.”

Section 835 of the National Defense Authorization Act of 2017 (2017 NDAA), signed into law nine days after the Civilian TO/DO Protest Act, contained an identical (and thus redundant) change. Although GAO once again has jurisdiction over TO/DO protests of civilian TO/DO awards over $10 million, Government contract bidders may have to employ tactics other than traditional post-award protests in order to challenge civilian TO/DO awards at or under $10 million.

DoD TO/DO Awards from $10 Million to $25 Million

While Congress gave in one respect, it took away in another. Section 835 of the 2017 NDAA raised the threshold for GAO’s jurisdiction over protests of Department of Defense (DoD) TO/DO awards from $10 million to $25 million. Thus, the 2017 NDAA effectively eliminates the ability of DoD contractors to bring traditional post-award TO/DO protests whenever the award is valued at $25 million or less.

Congress Makes No Change to Jurisdiction of Court of Federal Claims

Congress made no change to the jurisdiction of the Court of Federal Claims (COFC) over TO/DO awards. The COFC continues to have no jurisdiction to hear protests against any TO/DO awards. 41 U.S.C. § 4106(f), 10 U.S.C. § 2304c(e).

GAO and COFC Maintain Existing Jurisdiction over Protests of FSS Awards

U.S. Government agencies award billions of dollars to contractors annually through the General Service Administration’s (GSA) Federal Supply Schedule (FSS) program. The 2017 NDAA and Civilian TO/DO Protest Act do not affect the jurisdiction of GAO or the COFC to hear protests of civilian or DoD awards under the FSS program. Disappointed bidders may still challenge improper FSS awards in either forum, regardless of the size of the award.

What Can a Dissatisfied Bidder Do About Awards Under the $10/$25 Million Thresholds?

For a dissatisfied bidder considering a challenge to a TO/DO award under the relevant threshold, a standard post-award protest at GAO or the COFC is unavailable. However, GAO will entertain protests that a TO/DO award exceeds the scope or value of an Indefinite Delivery/Indefinite Quantity (IDIQ) contract, regardless of the size of the order. 41 U.S.C. § 4106(f), 10 U.S.C. § 2304c(e).

In addition, an agency-level protest may be available. While some agencies take the position that they will not hear any TO/DO protests, agency-level protest decisions are generally not published, and so exploring this option may be worthwhile. If an agency has made an egregious error, a protest, even if dismissed as invalid, could prompt a contracting officer (CO) to “do the right thing” and take corrective action. 

Offerors may also consider complaints to ombudsmen or competition advocates, or when applicable, submitting protests to the Small Business Administration (SBA) regarding whether an awardee qualifies as a small business, for the Section 8(a) Business Development Program or for other preference programs. Offerors concerned about being treated unfairly should also consider taking appropriate steps during the early stages of a procurement, to make unfair outcomes less likely. For example, bidders should consider asking careful questions during Q&A periods; challenging unfair solicitation terms, if necessary by means of pre-award protests; leveraging intellectual property; or protecting personnel from improper poaching whenever possible.

More Changes to Come?

Section 885 of the 2017 NDAA requires a wide-ranging report (to be prepared by a DoD contractor) on how bid protests affect procurement decisions, bidding on federal contracts, and outcomes to be submitted on or before December 23, 2017. The requirement for this report, and the inclusion in prior versions of the 2017 NDAA of additional changes that would have limited or discouraged protests, suggests that we may see further tinkering with the bid protest process in coming years.

Meanwhile, the $10 million hurdle for protesting civilian TO/DO awards is back in place, but the new $25 million hurdle is higher for protests of DoD TO/DO awards. Government contractors should understand the updated thresholds for protesting TO/DO awards and consider alternative avenues to protect their rights in cases where a protest is likely to be dismissed.

This alert was written by Nathanael D. Hartland and Daniel S. Koch in the Government Contracts practice group at Miles & Stockbridge.

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