Senate creates gap in vendor protest rights; is it just the beginning?

Government contractors are out of luck if they are unhappy with large dollar civilian agency task orders.

Industry’s recourse to protest these requests for quotations (RFQs) on popular vehicles such as Alliant, EAGLE 2, OASIS, T4NG and many others are limited to those options that many say are ineffective or too costly.

Contractors can thank the Senate for putting them in this situation. And if the upper chamber’s version of the National Defense Authorization Act (NDAA) of 2017 gets passed, bid protest authority of task orders worth more than $10 million may continue to go down the drain.

First, let me start with the most immediate problem. The Senate let the authority of the Government Accountability Office (GAO) to hear protests of civilian agency task or delivery orders worth more than $10 million expire on Sept. 30.

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This expiration only applies to civilian agencies as Congress made the ability of contractors to protest task orders issued by the Defense Department to GAO permanent in 2011. And this bid protest ability doesn’t apply to task orders against the Federal Supply Schedule or broad agency agreements either.

But as Rob Burton, a former deputy administrator of the Office of Federal Procurement Policy and now an attorney with Crowell & Moring, said this is bad news for contractors.

“Contractors could go to the Court of Federal Claims, but that’s very expensive and there is no automatic stay feature and most contractors really don’t pursue this approach. They still could go to the contracting officer and lodge a protest, but that doesn’t usually result in any remedy,” he said.

Ralph White, GAO’s managing associate general counsel for procurement law, said in an email to Federal News Radio offered more specifics on what the expiration means for vendors and GAO.

“The expiration of jurisdiction does not impact all of GAO’s task and delivery order jurisdiction. GAO retains its jurisdiction as set forth under the Competition in Contracting Act, and its jurisdiction to hear protests of DoD task and delivery orders,” he said.

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The House tried to extend the protest authority by passing its bill to extend this authority permanently for civilian agencies on Sept. 21. The House version of the NDAA also includes a provision to make the ability to protest civilian agency task orders to GAO permanent.

“Our bill passed the House which we were very glad to see, and we were hoping to see the Senate pass it shortly after but unfortunately it didn’t happen,” said Rep. Mark Meadows (R-N.C.), chairman of the Oversight and Government Reform Subcommittee on Government Operations and co-sponsor of the bill. “At this point we’re hoping to see the Senate pass it as soon as possible so we can extend the GAO’s authority.”

Rep. Gerry Connolly (D-Va.), ranking member of the committee and co-sponsor of the bill, added it’s important to keep this bid protest option open for contractors working for civilian agencies.

“The GAO protest authority provides transparency to the federal procurement process, and protects taxpayer investment and ensures the quality of the contract. It’s irresponsible to allow this effective and proven tool to lapse for one sector of federal spending, while protest authority for defense procurement has been made permanent,” he said. “Congressman Meadows and I are committed to fixing this post-haste and ensuring a fair and transparent process.”

It’s unclear why the Senate didn’t act.

A committee aide for the majority of the Senate Homeland Security and Governmental Affairs Committee said chairman Ron Johnson (R-Wis.) supports renewing the protest authority and hopes it will pass soon.

Multiple Hill sources say some members of the Senate even tried to push the House version through right before recess, but other lawmakers didn’t let the bill receive approval by unanimous consent.

One clue to why the Senate let the authority expire may be found in the Senate’s version of the NDAA for 2017.

Three sections of the 221 page Senate report on the bill detail lawmaker unhappiness with the authority to protest task orders to GAO.

Section 819 “would prohibit task and delivery protests [to GAO] if the Secretary of Defense has appointed an ombudsman…to review complaints related to task order and delivery contracts.”

Section 821 would add a new section to the law that would “outline the role of the Government Accountability Office (GAO) in bid protests on certain contracts with the Department of Defense. The provision would require a large contractor filing a bid protest on a defense contract with GAO to cover the cost of processing the protest if all of the elements in the protest are denied in an opinion issued by GAO. The provision would also impose a withhold on payments above incurred costs on any bridge or temporary contract to an incumbent contractor who submits a protest and that protest results in the issuance of a bridge or temporary contract. The distribution of this withhold would be dependent on the outcome of the protest.”

Section 822 “would require the Secretary of Defense to contract with a research entity to carry out a comprehensive study on the prevalence and impact of bid protests on Department of Defense acquisitions” within one-year of the NDAA becoming law.

Burton said these changes would not be good for the federal acquisition community at large.

“I’m not sure an ombudsman office could handle all the work that comes with deciding bid protests,” he said. “This area of task order bid protest authority is sorely needed in acquisition reform. I actually think the threshold of $10 million is too high. A lot of small businesses are competing below that amount and in effect have no recourse. I think the threshold should be lowered, maybe down to the Simplified Acquisition Threshold [$150,000].”

Every agency is supposed to have a task and delivery order ombudsman under the law so the approach in Section 819 isn’t a new one. But as the Services Acquisition Reform Act (SARA) panel highlighted in 2007, the approach isn’t viable, which is why these experts recommended GAO handle protests of task orders. By the way, the SARA panel also recommended letting vendors protest task orders worth $5 million or more as opposed to the current $10 million requirement.

Hill sources say the provisions likely are coming from both DoD and the Senate Armed Services Committee. There are some who believe bid protests are causing significant problems with the DoD acquisition process, even responsible for the increased use of lowest-price, technically acceptable (LPTA) because some in the Pentagon believe it is the only approach that is protest-proof.

GAO’s bid protest numbers, however, do not support the conclusion that bid protests are gumming up the works.

GAO reported in its fiscal 2015 bid protest report to Congress that out of 2,647 cases it closed, 335 involved task orders. GAO’s records show that over the years the split between DoD and civilian agencies of task order protests has been about 55 percent-to-45 percent so about 150 of the task order protests in 2015 were related to civilian agency task orders.

GAO’s White said the sunset provision is prospective and GAO will complete its review of pending protests filed before the expiration of this jurisdiction.

Congress may come back to the NDAA in November or December, meaning vendors have no real option for RFQs issued in the first quarter of 2017. And vendors and agencies alike should be watching the NDAA debate closely to see which of these Senate-only provisions, if any, stick.

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