Effective May 23, 2008, there will be important changes that pertain to a contractor’s ability to protest task and delivery orders. These changes are embodied in Section 843 of the 2008 Defense Authorization Act, "Enhanced Competition Requirements for Task and Delivery Order Contracts," and legislators expect the new provisions to increase competition for task and delivery order contracts. Most notably, the new law allows a contractor to protest a task order in excess of $10 million to the GAO. Previously, the Federal Acquisition Streamlining Act of 1994 (“FASA”) prohibited task order protests, except in very limited circumstances. In addition, the new law requires that DOD task or delivery order contracts in excess of $100 million be awarded to multiple contractors, with certain exceptions, and the establishment of enhanced competition requirements, such as a requirement for debriefings on task or delivery orders in excess of $5 million under such multiple award contracts. The GAO is currently revising its bid protest rules to address the newly acquired jurisdiction over task order protests. (The new rules will be posted on this blog as soon as they are issued).
At the April 19, 2007 hearing of the Senate Committee on Armed Services regarding the DOD’s management of costs under the Logistics Civil Augmentation Program (“LOGCAP”) contract in Iraq, Senator Carl Levin (D-MI) asked why ithe Army waited five years to split the contract among multiple contractors, allowing for competition of individual task orders. The response from the Assistant Secretary of the Army for Acquisition, Technology, and Logistics was: "I don’t have a good answer for you." The provisions of Section 843 ensure that, absent compelling reasons not to, there will be competition in the award of task and delivery orders on future contracts of this type. As far as we are concerned, however, there is an open question as to whether Multiple Award Task Order Contracts (‘MATOC”) are legally authorized under the Federal Acquisition Regulation for the procurement of construction. A protest raising that issue was filed by our firm and is pending before the United States Court of Federal Claims.
Section 843 of the Defense Authorization Act lifts the ban imposed by the Federal Acquisition Streamlining Act on protests to the Government Accountability Office (GAO) of task or delivery orders valued over $10 million. This provision may be short-lived though: it contains a “sunset” provision and expires three years after it becomes effective. Congress enacted Section 843 in response to the need for enhanced competition requirements, and apparently believed that federal agencies had too little oversight when permitted to issue task order procurements that were not subject to protest. After the FASA was enacted, federal agencies increasingly employed the indefinite delivery, indefinite quantity (“IDIQ”) contracts for expensive projects, purportedly to utilize “streamlining” but, in part, to circumvent the bid protest process. It will be interesting to see whether the newly enacted right to file bid protests will have a “chilling” effect on agency plans to issue IDIQ contracts in the future.
The exclusive jurisdiction granted to the GAO means that the Court of Federal Claims (CFC) will not adjudicate these protests. Under the current protest regime, both the GAO and the CFC are authorized to hear bid protests, and we would have preferred for that dual jurisdiction to have continued on task order protests, as well. An advantage of the current system for contractors is that if they are unhappy with the outcome of a GAO protest, they can obtain de novo review of that same protest at the CFC. Under Section 843, this second chance will not be available for task or delivery order protests. This has serious implications for contractors because only a small fraction of protests heard by the GAO are sustained.
Additional means of enhancing competition are also set forth by Section 843. For task or delivery orders in excess of $5 million, the government agency is required to provide a fair opportunity to be considered. This means that at the very least, the following must be provided to all contractors: 1) a notice of the task or delivery order that includes a clear statement of the agency’s requirements; 2) a reasonable period of time to provide a proposal in response to the notice; 3) disclosure of the significant factors and subfactors, including cost or price, that the agency expects to consider in evaluating such proposals, and their relative importance; 4) in the case of an award that is to be made on a best-value basis, a written statement documenting the basis for the award and the relative importance of quality and price or cost factors; and 5) an opportunity for a post-award debriefing. Unless certain exceptions apply, the current law requires the agency to give all multiple-award IDIQ contract holders a fair opportunity to be considered for each order in excess of $2,500.
Section 843 targets sole source awards. The new rules establish further requirements for agencies awarding IDIQ contracts valued over $100 million to a single awardee, as opposed to multiple sources. In order for this to happen, the head of the agency must make a written determination that (i) all task orders under the contract are so integrally related that only a single contractor can reasonably perform the work; (ii) the contract provides only for firm, fixed-price task or delivery orders at specified unit prices; (iii) only one source is qualified and capable of performing the work at a reasonable price; or (iv) it is necessary in the public interest to award the contract to a single source. Additionally, Congress must be notified within 30 days of the determination to award an IDIQ contract to a single source. These new requirements are similar to those of the Federal Acquisition Regulation (FAR) Part 6.3 which justify awarding a contract to a single source.
The most potentially controversial provision of the enhanced competition framework of Section 843 is the authorization of task or delivery order protests. In 2003, the Services Reform Act (SARA) authorized the Acquisition Advisory Panel (the "Panel") to review and recommend any necessary changes to acquisition laws and regulations and government-wide acquisition policies. Included in the Panel’s draft report of 2006, was a similar provision, which was met with opposition from interest groups who feared that an increased number of bid protests would raise costs for federal contracts and impede the procurement process. The final legislation gives exclusive jurisdiction to the GAO over task or delivery award contract protests, and is likely a compromise between the recommendations of the Panel and the concerns of the interest groups.
Section 843 is silent on some procedural matters regarding task or delivery order protests. For instance, the automatic stay requirement of the Competition in Contracting Act is not mentioned. Under the CICA, the contracting agency is required to stay the award or suspend pe
rformance of a protested contract upon the commencement of a timely protest to the GAO. Further questions are raised by the silence of Section 843 regarding time limitations for filing task or delivery order protests at GAO. It would seem that current rules for protests where debriefings were requested would stand. This means that the deadline for filing a task or delivery order protest will likely be 10 days from the date of the debriefing (five days to obtain the automatic CICA stay) in post-award protests-regardless of when the protester learned the basis of the protest. However, the new GAO rules must be reviewed after they are issued to determine whether there are any new or unusual requirements that affect the filing of task order protests.
Congress’ grant of exclusive jurisdiction to the GAO for task and delivery award protests also precludes agency level protests. This seemingly creates a conflict with current federal acquisition policy, which encourages parties to resolve controversies over procurement at the agency level whenever possible. The NDA, however, does not alter the existing statutory requirement, first implemented in the FASA, that each federal agency appoint a task and delivery order ombudsman to review complaints from contractors claiming they were not afforded a fair opportunity to be considered for task or delivery orders.
For task orders valued below $10 million, the ombudsman remains the only reviewing authority for disappointed contractors. Under Section 843 task order procurements between $5 million and $10 million are subject to the new procedural requirements but still exempt from GAO’s protest jurisdiction. This implies that contractors can still seek to enforce compliance with the new procedures for procurements in this dollar range by submitting a complaint to the ombudsman.