[Federal Register: April 14, 2005 (Volume 70, Number 71)]
[Rules and Regulations]
[Page 19679-19681]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14ap05-1]
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Rules and Regulations
Federal Register
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[[Page 19679]]
GOVERNMENT ACCOUNTABILITY OFFICE
4 CFR Part 21
Government Accountability Office, Administrative Practice and
Procedure, Bid Protest Regulations, Government Contracts
AGENCY: Government Accountability Office.
ACTION: Final rule.
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SUMMARY: This document amends Government Accountability Office (GAO)
Bid Protest Regulations by revising the definition of an interested
party to permit a protest to be filed by an agency tender official
(ATO) in certain public-private competitions under Office of Management
and Budget (OMB) Circular A-76. This document also revises the
definition of an intervenor to permit an ATO and an employee
representative to intervene in certain protests involving public-
private competitions under OMB Circular A-76. This action implements
the provisions of the Ronald W. Reagan National Defense Authorization
Act for Fiscal Year 2005 related to the bid protest process, where a
public-private competition has been conducted under OMB Circular A-76
regarding an activity or function of a Federal agency performed by more
than 65 full-time equivalent (FTE) employees of the Federal agency.
DATES: Effective April 14, 2005.
FOR FURTHER INFORMATION CONTACT: Daniel I. Gordon (Managing Associate
General Counsel), Michael R. Golden (Assistant General Counsel), Linda
S. Lebowitz (Senior Attorney), or Paul N. Wengert (Senior Attorney),
202-512-9732.
SUPPLEMENTARY INFORMATION:
Effective Dates
Section 326(d) of the Ronald W. Reagan National Defense
Authorization Act for Fiscal Year 2005, Pub. L. 108-375, 118 Stat.
1811, 1848, states that the provisions apply to protests ``that relate
to studies initiated under Office of Management and Budget Circular A-
76 on or after the end of the 90-day period beginning on the date of
the enactment of this Act.'' The date of enactment was October 28, 2004
and, therefore, the end of the 90-day period was January 26, 2005.
Protests filed after the effective date of this final rule that
relate to studies initiated under OMB Circular A-76 on or after January
26, 2005, will be considered under this final rule. Protests filed at
GAO after the effective date of this final rule that relate to studies
initiated under OMB Circular A-76 before January 26, 2005, will be
considered under GAO's regulations as they were prior to the issuance
of this final rule. The same is true for (1) protests filed on or after
the effective date of this rule that supplement or amend a protest
filed at GAO before the effective date of this rule and (2) claims and
requests for reconsideration filed on or after the effective date of
this rule that concern a protest that was not subject to this rule.
Background
On December 20, 2004, GAO published a proposed rule (69 FR 75878)
and a correction on December 23, 2004 (69 FR 76979) in which it
proposed to amend its Bid Protest Regulations. The supplementary
information included with the proposed rule explained that the proposed
revisions to GAO's regulations, promulgated in accordance with the
Competition in Contracting Act of 1984 (CICA), 31 U.S.C. 3551-3556,
were to implement the requirements in the National Defense
Authorization Act for Fiscal Year 2005 regarding standing to protest to
GAO by an in-house competitor in a public-private competition.
GAO addressed the in-house competitor standing issue in Dan
Duefrene; Kelley Dull; Brenda Neuerburg; Gabrielle Martin, B-293590.2
et al., Apr. 19, 2004, 2004 CPD ] 82. In that decision, GAO concluded
that, notwithstanding the May 29, 2003 revisions to OMB Circular A-76,
the in-house competitor in a public-private competition conducted under
the Circular was not an offeror and, therefore, under the then-current
language of CICA, a representative of an in-house competitor was not an
interested party eligible to maintain a protest before GAO.
On the same day that the Dan Duefrene decision was issued, the
Comptroller General sent a letter to the cognizant congressional
committees, explaining that, because an in-house competitor did not
meet the then-current CICA definition of an interested party, GAO was
required to dismiss any protest that an in-house competitor filed. In
the letter, the Comptroller General recognized that policy
considerations, including the principles unanimously agreed to by the
congressionally-chartered Commercial Activities Panel, weighed in favor
of allowing certain protests by in-house competitors with respect to A-
76 competitions and, as a result, Congress might want to consider
amending CICA to allow GAO to decide such protests. Consistent with
that letter, the National Defense Authorization Act for Fiscal Year
2005 amended CICA to permit certain protests by in-house competitors.
The revisions to GAO's Bid Protest Regulations in this final rule
implement the statutory provisions.
Summary of Comments
Interested persons were invited to submit comments on GAO's
proposed rule by February 18, 2005. GAO received written comments from
two federal agencies, five organizations representing contractors,
seven unions, and three individuals. In adopting this final rule, GAO
has carefully considered all comments received.
A summary of the more significant specific comments concerning
GAO's proposed rule, and GAO's responses to these comments, are set
forth below. As a general matter, and perhaps reflecting the fact that
the proposed rule closely followed the statute, the agencies, one
individual commenter, and five of the organizations representing
contractors agreed that the proposed regulations correctly implemented
the statutory language. On the other hand, while not directly
addressing whether the proposed regulations correctly implemented the
statute, the seven unions and one individual commenter
[[Page 19680]]
questioned whether the law, as well as the proposed regulations,
provided effective protest rights for the employees whose jobs were
placed at risk by these A-76 competitions.
Section 21.0--Definitions
Interested Party
A number of commenters were concerned that the proposed revision to
the definition of an ``interested party'' would preclude an ATO from
protesting a competition involving a function with 65 or fewer FTEs.
That is, because it is defined as an interested party only for
competitions related to functions performed by more than 65 FTEs, the
ATO cannot file a protest at GAO where an agency conducts a competition
(whether standard or streamlined) involving a function performed by 65
or fewer FTEs. While two commenters agreed with this aspect of the
proposed rule, five commenters urged GAO to extend the revised
definitions of an interested party in sec. 21.0(a)(2) and of an
intervenor in sec. 21.0(b)(2) to include all public-private
competitions conducted under OMB Circular A-76, regardless of the
number of FTEs involved, where the federal agency uses the procurement
system to conduct the competition. Two additional commenters recognized
that such an extension would be inconsistent with the language of the
National Defense Authorization Act for Fiscal Year 2005, but expressed
disagreement with the statute. One commenter urged GAO to impose parity
by refusing to consider a protest from a private-sector entity in such
cases if the public-sector competitor could not file a protest.
GAO recognizes a lack of parity may arise in certain situations:
unlike an ATO, a private-sector competitor could have standing to file
a protest of a standard A-76 competition involving fewer than 65 FTEs,
and of a streamlined A-76 competition, if the agency had issued a
solicitation and thereby used the procurement system to determine
whether to contract out or to perform work in-house. GAO concludes,
however, that the rule appropriately follows the statutory language,
which grants interested party and intervenor status to designated
parties only in the case of an A-76 competition regarding an activity
or function of a Federal agency performed by more than 65 FTEs. In
GAO's view, it is for Congress to determine the circumstances under
which an in-house entity has standing to protest the conduct of an A-76
competition, and the 2004 statutory changes limited public-sector
standing to competitions involving an activity or function of a Federal
agency performed by more than 65 FTEs of the Federal agency. Moreover,
GAO believes that it would not be consistent with CICA for GAO, in an
attempt to achieve parity in a competition related to functions with
fewer than 65 FTEs, to refuse to consider a private-sector offeror's
protest that is otherwise within GAO's bid protest jurisdiction.
Finally, one commenter objected on the basis that an ATO who files
a protest is acting unconstitutionally. Determining the
constitutionality of the statutory provisions authorizing ATO protests
is beyond the scope of this rulemaking and, indeed, beyond GAO's bid
protest function. See Urban Group, Inc.; McSwain & Assocs., Inc., B-
281352, B-281353, Jan. 28, 1999, 99-1 CPD ] 25 at 8.
Intervenor
One commenter asked that notices of protests be provided to the ATO
to allow timely intervention. GAO believes that the requirement in the
existing rule for notice to potential intervenors applies and that the
existing rule is sufficient to require an agency to provide appropriate
notice to the ATO.
Another commenter asked that GAO allow an ATO to intervene only if
an employee representative failed to intervene. Two commenters asked
GAO to provide standards that a putative employee representative
intervenor would have to satisfy in order to be allowed to participate
as an intervenor. Two commenters stated that the Federal agency should
be permitted to set standards for the putative employee representative
intervenor. Three commenters requested that GAO treat a union as
presumptively authorized to intervene where it represents affected
employees.
GAO believes that it is not possible to anticipate the variety of
factual circumstances in which requests to intervene by either ATOs or
employee representatives, or both, will occur and, therefore, it is not
yet appropriate to set forth standards for how those situations will be
resolved. At this time, therefore, GAO will implement the rule as
proposed. GAO recognizes that the result may be that two presumably
aligned parties (the ATO and the employee representative) may present
somewhat different views to GAO. Notwithstanding any difficulty that
this result could create, GAO believes that Congress intended that an
employee representative could qualify as an intervenor whether or not
the ATO is also a party (either as a protester or as an intervenor). In
this connection, the conference report stated that ``[a] person
representing a majority of the employees would not have standing to
file a protest, but would have the right to intervene in a protest
filed by an interested party, including the ATO.'' H.R. Rep. No. 108-
767, at 648 (2004), reprinted in 150 Cong. Rec. H9187, H9527 (daily ed.
Oct. 8, 2004).
Protective Order Practice
As noted in the background to the proposed rule, GAO did not
propose to address protective order issues in the rule changes, but GAO
solicited comments on how those issues should be handled where an ATO
and/or employee representative is participating in a protest. Two
commenters urged GAO to require counsel for an ATO to apply for
admission to a protective order under standards tailored to the role of
ATO counsel. One additional commenter opposed requiring application for
protective order admission by ATO counsel, but urged GAO to ``admit''
ATO counsel to the protective order if the agency provided certain
protections against disclosure of protected material. One other
commenter asked GAO to specify the sanctions that would be imposed on
an employee representative or ATO if there were an unauthorized
disclosure of protected material.
GAO believes that it is premature to provide definitive guidance
regarding the access to protected information by the ATO, the employee
representative, and their attorneys. Nonetheless, several points of
guidance can be offered here. GAO believes that where counsel for the
ATO or for the employee representative is not a government employee,
that attorney will be required to apply for admission under existing
standards established for admission to a protective order. As for the
ATO and the employee representative, those individuals would presumably
not be provided access to protected information under the protective
order, just as non-attorneys in other protests cannot obtain such
access. In cases where counsel for the ATO, or for the employee
representative, is a government employee, GAO will proceed on a case-
by-case basis, with appropriate weight given to the agency's views and,
in particular, to the access that the agency has given the attorney to
proprietary or source selection sensitive documents before the protest
was filed. As the practice develops, and experience is gained by all
sides, GAO intends to develop, and publish, uniform procedures that can
be incorporated into the bid protest process and, if warranted, into
GAO's Bid Protest Regulations.
[[Page 19681]]
Issues Not for GAO Review
One commenter requested that GAO specify that the prohibition
against protests challenging the decision of an ATO to file (or not to
file) a protest should explicitly reference its applicability to A-76
competitions involving more than 65 FTEs. GAO believes that the
additional language is unnecessary because the proposed rule already
encompasses the requested limitation in sec. 21.0. GAO believes that
sec. 21.5(k) comports with the statutory intent that the decision of an
ATO regarding whether to file a protest is not subject to GAO review.
List of Subjects in 4 CFR Part 21
Administrative practice and procedure, Bid protest regulations,
Government contracts, Government procurement.
0
For the reasons set out in the preamble, title 4, chapter I, subchapter
B, part 21 of the Code of Federal Regulations is amended to read as
follows:
PART 21--BID PROTEST REGULATIONS
0
1. The authority citation for part 21 continues to read as follows:
Authority: 31 U.S.C. 3551-3556.
0
2. Amend Sec. 21.0 by redesignating paragraph (a) as paragraph (a)(1)
and adding new paragraph (a)(2), and by redesignating paragraph (b) as
paragraph (b)(1) and adding new paragraph (b)(2) to read as follows:
Sec. 21.0 Definitions.
(a)(1) * * *
(2) In a public-private competition conducted under Office of
Management and Budget Circular A-76 regarding an activity or function
of a Federal agency performed by more than 65 full-time equivalent
employees of the Federal agency, the official responsible for
submitting the Federal agency tender is also an interested party.
(b)(1) * * *
(2) If an interested party files a protest in connection with a
public-private competition conducted under Office of Management and
Budget Circular A-76 regarding an activity or function of a Federal
agency performed by more than 65 full-time equivalent employees of the
Federal agency, a person representing a majority of the employees of
the Federal agency who are engaged in the performance of the activity
or function subject to the public-private competition and the official
responsible for submitting the Federal agency tender as described in
paragraph (a)(2) of this section may also be intervenors.
* * * * *
0
3. Amend Sec. 21.5 by adding paragraph (k) to read as follows:
Sec. 21.5 Protest issues not for consideration.
* * * * *
(k) Decision whether or not to file a protest on behalf of Federal
employees. GAO will not review the decision of an agency tender
official to file a protest or not to file a protest in connection with
a public-private competition.
Anthony H. Gamboa,
General Counsel, United States Government Accountability Office.
[FR Doc. 05-7489 Filed 4-13-05; 8:45 am]
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