David Yang
On September 18, 2017, the Senate passed its version of the 2018 National Defense Authorization Act (“NDAA”). The proposed bill, which heads into conference with the House to resolve the competing bills, will implement significant changes to the federal bid protest practice at the U.S. Government Accountability Office (“GAO”), should the bill emerge more or less intact from conference and if it is signed into law by the President.
While the Senate’s 2018 NDAA increases military spending across many defense programs, it will also substantially impact several other areas within government procurement. Besides increasing defense spending to meet emerging threats and addressing the increased use of commercial item procurements, one of the most notable areas proposed for reform is an overhaul of the post-award debriefing process currently given by agencies to disappointed offerors. In this respect, and as proposed, Sections 821 and 822 of the NDAA would make substantially more information available to disappointed offerors than that which currently is available to contractors under the Federal Acquisition Regulation, which is relatively anemic by comparison. The purpose of the Senate proposal is to provide contractors with more data so they can make better and more informed decisions about whether to file a protest, thus reducing the number of speculative protests that are filed to test or probe suspicions that the evaluation process may not have been conducted properly or that the agency may have committed other prejudicial errors, while also encouraging contractors to adopt a more measured approach in their procurement strategies, including protests.
If signed into law, Section 821 of the 2018 NDAA would act to disincentivize contractors from filing frivolous protests. Specifically, under this provision, large contractors (defined as companies with over $100 million in annual revenue) that lose on all grounds of a protest in connection with any Defense Department (“DoD”) procurement will be required to pay DoD’s costs for defending the protest. Moreover, under this provision, incumbent contractors on civilian or defense contracts that file a protest will have any payments above their incurred costs withheld on any bridge contracts or contract extensions made during the pendency of the GAO protest period while the procurement is stayed. Such funds would only be released to the incumbent if GAO sustains at least one ground of protest or if the solicitation is cancelled. Combined, the goal of the Senate’s proposed reforms is to reduce the number of protests, including those filed by incumbents, through mechanisms designed to encourage contactors to think twice and hard before filing a protest at GAO.
In line with these policies, Section 822 of the NDAA would facilitate this decision-making process by providing significantly more information to contractors during the debriefing process than what is currently afforded by regulation. In this regard, Section 822, if enacted, would entitle a disappointed offeror to, among other rights, the following:
- The agency’s written source selection award determination, redacted if necessary to protect other offerors’ confidential and proprietary information;
- A combined written and oral debriefing for all contract awards and task or delivery orders valued at $10,000,000 or higher;
- An unredacted copy of the source selection award document and agency record to the contractor’s outside counsel or consultant under a protective order or equivalent; and
- A full opportunity to ask follow-up questions following a post-award debriefing, and a clear position that the debriefing will be held open until the questions have been answered, and therefore, the time to file a protest to obtain an automatic stay of performance will not begin until questions have been answered and the debriefing expressly has been deemed to have concluded.
Finally, Section 822 provides that for DoD procurements, the current 100-day period afforded to GAO to decide a protest would be reduced to 65 days, unless the case involves unusually complex issues or large agency records. Although the compressed protest schedule will lead to faster decisions by GAO, and presumably also faster corrective action decisions by agencies, the accelerated schedule will likely increase the burden not only on the parties to litigate the case, but also on GAO to reach a decision within the compressed timeframe. The enhanced debriefing procedures and expanded scope of information to be provided to contractors is intended to offset these new constraints.
In sum, some of these proposed reform items, and certainly all of them combined, would transform the present agency debriefing process into a process more akin to a mini-bid protest at GAO, without having to go to GAO, where the disappointed offeror and its outside counsel will be able to take a substantive look at whether they have meritorious grounds for protest without actually having to file a protest. This, in theory, will save the parties and GAO from expending unnecessary costs, time, and effort (particularly, in the case of GAO with its already heavy caseload) regarding protests that have little hope of success and represent a poor return on investment not only to contractors but also to the taxpayer. That said, the Senate’s proposed reforms at GAO, with its increased risks, burden, and costs of protesting at GAO, considerations which traditionally have prompted contractors to file protests at GAO, may result in an uptick in protests at the U.S. Court of Federal Claims, which would not be affected by the proposed changes.