[Federal Register Volume 73, Number 111 (Monday, June 9, 2008)]
[Rules and Regulations]
[Pages 32427-32430]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-12790]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 73, No. 111 / Monday, June 9, 2008 / Rules
and Regulations
[[Page 32427]]
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, which have been promulgated in accordance with
the Competition in Contracting Act of 1984. These amendments are being
made to implement changes to the definition of an ``interested party''
for the GAO Bid Protest forum set forth in sec. 326 of the National
Defense Authorization Act for Fiscal Year 2008, and to make certain
administrative changes.
DATES: Effective Date: June 9, 2008.
FOR FURTHER INFORMATION CONTACT: Michael R. Golden (Managing Associate
General Counsel), Ralph O. White (Assistant General Counsel), or
Jonathan L. Kang (Senior Attorney), 202-512-3315.
SUPPLEMENTARY INFORMATION:
Effective Dates
GAO's statutory jurisdiction to hear bid protests filed by
interested parties was recently amended by section 568 of the
Department of Homeland Security Appropriations Act, 2008 (enacted as
Division E of the Consolidated Appropriations Act, 2008, Pub. L. 110-
161, 121 Stat. 1844, on December 26, 2007), and by sections 326 and 843
of the National Defense Authorization Act for Fiscal Year 2008, Public
Law 110-181, 122 Stat. 3, 62, 236.
Section 568 of the Department of Homeland Security Appropriations
Act, 2008, made the Transportation Security Administration (TSA)
subject to the Federal Acquisition Regulation. Therefore, as of the
June 23, 2008, effective date, GAO will begin to hear protests of TSA
procurements covered by TSA solicitations issued on or after the
effective date.
Section 326 of the National Defense Authorization Act for Fiscal
Year 2008 expanded the protest rights of Federal employees in a
competition conducted under Office of Management and Budget (OMB)
Circular A-76 or noncompetitive decision to convert a function
performed by Federal employees to private sector performance. Section
326 specifies that GAO has jurisdiction to hear protests concerning
studies initiated after January 1, 2004, for actions taken after the
date of enactment, which was January 28, 2008.
Section 843 of the National Defense Authorization Act for Fiscal
Year 2008 amended GAO's statutory jurisdiction under 10 U.S.C. 2304c(e)
and 41 U.S.C. 253j(e) to authorize GAO to hear protests of the issuance
or proposed issuance of certain task and delivery orders under certain
indefinite-delivery/indefinite-quantity contracts. Section 843
specifies that GAO has jurisdiction to hear protests concerning the
issuance or proposed issuance of task and delivery orders 120 days
after enactment, which is May 27, 2008.
Background
On March 21, 2008, GAO published a proposed rule (73 FR 15098) to
amend its Bid Protest Regulations. The supplementary information
included with the proposed rule explained that the proposed revisions
to GAO's Bid Protest Regulations were promulgated in accordance with
the Competition in Contracting Act of 1984 (CICA), 31 U.S.C. 3551-3556,
in response to statutory changes in GAO's bid protest jurisdiction
contained in section 568 of the Department of Homeland Security
Appropriations Act, 2008, and sections 326 and 843 of the National
Defense Authorization Act for Fiscal Year 2008.
The proposed rule also explained that after careful consideration,
GAO had concluded that no changes in GAO's Bid Protest Regulations were
necessary in order to effectuate the provisions of section 568 of the
Department of Homeland Security Appropriations Act, 2008, or section
843 of the National Defense Authorization Act for Fiscal Year 2008. The
proposed rule therefore set forth the proposed revisions to GAO's Bid
Protest Regulations to implement section 326 of the National Defense
Authorization Act for Fiscal Year 2008 and to make certain
administrative changes.
GAO invited interested persons to participate in this rulemaking by
submitting written comments regarding the proposed revisions. These
comments were required to be submitted on or before April 21, 2008.
Summary of Comments
GAO received written comments from two Federal agencies, two
Federal employee labor unions, the American Bar Association, and two
individuals. In adopting this final rule, GAO has carefully considered
all comments received.
With respect to the changes in GAO's rules to implement the
recently enacted statutes, one of the agencies, the American Bar
Association, and both Federal employee labor unions explicitly agreed
that the proposed regulations correctly implemented the statutory
language. On the other hand, both of the employee unions suggested
additional changes to GAO's rules to fully implement what they contend
is the intent of the statutory changes. With respect to the changes in
GAO's rules made for administrative purposes, the American Bar
Association endorsed the proposed changes. A summary of the more
significant specific comments concerning GAO's proposed rule, and GAO's
responses to these comments, are set forth below.
Interested Party
The recent changes to the statutory definition of an ``interested
party'' anticipate that Federal employees may be represented by either
of two entities: (1) The official who submitted the agency tender in a
public-private competition; or (2) any one person or individual who,
for the purpose of representing the employees of a Federal agency in a
protest, has been designated their agent by a majority of the employees
who are engaged in performing such activity.
One individual commentator noted that the proposed revision to the
definition of an ``interested party'' uses the term ``individual''
rather than the term ``person'' to describe the representative other
than the agency
[[Page 32428]]
tender official (ATO) who can file a protest on behalf of affected
employees, and raised concerns about the term ``individual.'' Congress
initially changed the statutory definition of ``interested party'' in
section 739(c) of the Financial Services and General Government
Appropriations Act, 2008 (enacted as Division D of the Consolidated
Appropriation Act, 2008), using the term ``person'' to describe the
representative of the majority of affected Federal employees. One month
later, in the National Defense Authorization Act for Fiscal Year 2008,
Congress again amended the same provision, this time using the term
``individual.'' GAO has used the language of the later-enacted statute
for its rules. For GAO, the use of the term ``individual'' as opposed
to ``person'' is not intended to signal any substantive difference
between the terms.
One of the agency commentators expressed concern that the
interested party definition could allow affected employees to protest
the selection of a ``most efficient organization'' (MEO) under a
public-private competition conducted pursuant to OMB Circular A-76.
GAO's proposed interested party definition, which closely tracks the
statutory enactment, does not address (just as the statute does not
address) whether affected employees are authorized to protest the
selection of an MEO. In the event GAO is presented with this issue, GAO
will consider it at that time.
While the two Federal employee unions expressly recognize that
GAO's proposed rules were faithfully implementing the statutory
amendments to the definition of an interested party, both expressed
concern regarding several areas where they contend more guidance should
be provided. These concerns, in the aggregate, were that the definition
of an interested party should be supplemented to: (1) Provide guidance
regarding the designation of an employee representative (this concern
was also raised by one of the individual commentators), (2) address
whether a government employee must lose or be at risk of losing his or
her job in order to have standing to protest, and (3) authorize a
protest without regard to the number of employees involved.
Additionally, one Federal employee union argued that affected employees
should be eligible to receive access to information covered by a
protective order.
With respect to the designation of an employee representative, GAO
plans to resolve these issues on a case-by-case basis. However, GAO's
practice is to generally accept a party's representation that it is an
interested party, unless facts are brought to GAO's attention that
challenge the representation.
With respect to whether a government employee must lose his or her
job in order to have standing to protest, GAO has addressed this issue
in a recent decision in which GAO concluded that Federal employees'
jobs ``must be at stake in order for their designated agent to qualify
as an interested party to challenge an agency's conversion of a
function to performance by the private sector.'' Mark Whetstone--
Designated Employee Agent, B-311284, May 9, 2008, 2008 CPD ]-- at 5-6.
Because GAO has addressed this issue in a published decision, GAO does
not believe that a change to the proposed rule is needed.
With respect to whether a protest is authorized without regard to
the number of affected employees, GAO has addressed this issue in a
recent decision as well. As GAO explained in Lisa Hartman--Designated
Employee Agent, B-311247, May 6, 2008, 2008 CPD ]--, there is no
requirement under OMB Circular A-76 for an agency to use the
procurement process to conduct a ``streamlined competition,'' when a
commercial activity is performed by 65 or fewer full-time equivalent
(FTE) employees. Moreover, there is no statutory requirement to conduct
a public-private competition, using the procurement process, if fewer
than 10 FTEs are involved. Id.; see also National Defense Authorization
Act for Fiscal Year 2008, Public Law 110-181, Sec. 327, 122 Stat. 3,
63. Because GAO has addressed this issue in a decision, GAO does not
believe that a change to the proposed rule is needed.
Finally, with respect to whether affected employees should be
eligible to receive access to information covered by a protective
order, GAO notes that this issue was raised by several commentators in
connection with the revision of GAO's rules in 2005. 70 FR 19679,
19680, Apr. 14, 2005. As explained then, GAO thought it was premature
to provide definitive guidance regarding providing access to protected
information by the ATO, the employee representative, and/or their
attorneys. Since that time, GAO has not had an opportunity to address
this matter further in protest decisions.
Nonetheless, GAO thinks that several points of guidance offered
then are still applicable. 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 uniform procedures that can be
incorporated into the bid protest process and, if warranted, into GAO's
Bid Protest Regulations.
Contracting Agency
In the proposed rules, GAO explained it was deleting the definition
of ``contracting agency'' at paragraph (d) of 4 CFR 21.0, and replacing
the term ``contracting agency'' with ``agency'' throughout 4 CFR 21.
One of the individual commentators brought to GAO's attention that the
proposed rule failed to implement this change at paragraph (c) of 4 CFR
21.3. GAO is correcting this omission in the final rule.
Additional Statements
In the proposed rules, GAO explains that, consistent with current
practice, GAO proposed to revise paragraph (j) of 4 CFR 21.3 to clarify
that parties must seek GAO's prior approval before submitting
additional statements, and that GAO reserves the right to disregard
statements that are submitted without prior approval. One of the
individual commentators suggested that GAO amend the proposed rule to
state that GAO will automatically reject additional filings that are
submitted without prior approval. Although the amendment of the rule
reflects the need for parties to seek prior approval before submission
of additional statements, GAO does not believe that it would be
appropriate, in every case, to automatically reject additional
statements submitted without prior approval. As a result, GAO is not
changing the proposed rule in this respect.
The same commentator also requested that GAO amend the proposed
rule to state that when a party is allowed to submit an additional
statement, the other parties shall have a minimum of 24 hours to
respond, where practicable. As a general rule, consistent with GAO's
statutory obligation to issue decisions
[[Page 32429]]
within 100 calendar days, GAO allows parties to respond to additional
statements. GAO is not prepared, however, to amend the rules to reduce
its flexibility in this area.
One of the Federal employee union commentators requested that GAO
amend this proposed rule to allow parties who request permission to
submit additional statements to submit the statement along with the
request. GAO does not believe that this proposed change is warranted,
as it would effectively defeat the stated purpose of the rule of
requiring parties to first obtain permission to submit additional
statements.
Reimbursement of Costs
One of the individual commentators requested that GAO amend its
rule at 4 CFR 21.8 to state that GAO will recommend reimbursement of
costs and attorneys' fees only in ``appropriate circumstances,'' so as
to provide GAO with the discretion to avoid recommending that an agency
reimburse the costs and fees of agency employees or counsel. The
commentator recognizes that this concern would not exist in situations
where affected employees retain outside representation. GAO does not
think that changes to this rule are needed to conclude that awarding
costs to government employee protesters may not be appropriate, because
the rule already states that GAO ``may'' recommend reimbursement of
protest costs, including attorneys' fees.
The same commentator also suggested that GAO clarify paragraph (e)
of 4 CFR 21.8 to expressly state that GAO will not recommend
reimbursement of protest costs where an agency takes prompt corrective
action, i.e., the agency takes corrective action before the agency
report is produced. GAO thinks this issue has been adequately addressed
in prior decisions. E.g., Alaska Structures, Inc.-Costs, B-298156.2,
July 17, 2006, 2006 CPD ] 109 at 4. GAO recognizes that the commentator
is accurately stating the general rule applicable to recommendations
for the reimbursement of protest costs. On the other hand, GAO does not
rule out the possibility that unique and rarely encountered
circumstances could warrant the recommendation of the reimbursement of
costs when an agency takes corrective action prior to the due date for
the agency report and would like to retain its discretion in this
regard. See Louisiana Clearwater, Inc.--Reconsideration & Costs, B-
283081.4, B-283081.5, Apr. 14, 2000, 2000 CPD ] 209 at 6.
Statutory Stays
In the notice of proposed rulemaking, GAO stated that it would
revise 4 CFR 21.6 and 21.14 to clarify that GAO has no role in
administering the statutory requirements to withhold contract award or
suspend contract performance. One of the Federal employee unions
expressed concern with GAO's proposed clarification because of what the
commentator perceived as GAO's ability to direct agencies to suspend
contract performance. The commentator argued that this ability could
provide a valuable mechanism to enforce the rights of affected
employees.
GAO proposed this change to more accurately reflect its role in
questions involving the statutory stay provisions of CICA. GAO views
this clarification as appropriate for all of the protests over which
GAO has jurisdiction: this clarification has no greater or lesser
application to protests involving public-private competitions. As a
result, GAO plans to implement the proposed changes to 4 CFR 21.6 and 4
CFR 21.14 as explained in the notice of proposed rulemaking.
TSA Jurisdiction
In the notice of proposed rulemaking, GAO noted that as of June 23,
2008, procurements conducted by the TSA will be subject to the Federal
Acquisition Regulation (FAR), such that GAO will gain jurisdiction over
TSA procurements. The Department of Homeland Security (DHS) has issued
a final rule stating that TSA ``acquisitions initiated after June 22,
2008'' will be subject to the FAR. 73 FR 30317, May 27, 2008. In
addition, TSA has requested that GAO clarify that its jurisdiction will
apply to procurements covered by solicitations issued on or after June
23. In light of the revised DHS regulations pertaining to the
applicability of the FAR to TSA procurements, and in the interest of an
orderly transition by TSA to FAR-based procurements, GAO will hear
protests of TSA procurements covered by TSA solicitations issued on or
after June 23.
List of Subjects in 4 CFR Part 21
Administrative practice and procedure, Appeals, Bid protest
regulations, Government contracts.
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 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. Remove the words ``a contracting agency'' and ``the contracting
agency'' wherever they appear and add in their place the words ``an
agency'' or ``the agency,'' respectively.
0
3. Amend Sec. 21.0, by revising paragraphs (a)(2), (b)(2), and (c);
removing paragraph (d); and redesignating paragraph (e) as paragraph
(d), redesignating paragraph (f) as paragraph (e), redesignating
paragraph (g) as paragraph (f) and revising it, and redesignating
paragraph (h) as paragraph (g).
The revisions 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 performance of an
activity or function of a Federal agency, or a decision to convert a
function performed by Federal employees to private sector performance
without a competition under OMB Circular A-76, interested party also
means
(A) The official responsible for submitting the Federal agency
tender, and
(B) Any one individual, designated as an agent by a majority of the
employees performing that activity or function, who represents the
affected employees.
(b)(1) * * *
(2) If an interested party files a protest in connection with a
public-private competition conducted under OMB Circular A-76 regarding
an activity or function of a Federal agency, the official responsible
for submitting the Federal agency tender, or the agent representing the
Federal employees as described in paragraph (a)(2)(B) of this section,
or both, may also be intervenors.
(c) Federal agency or agency means any executive department or
independent establishment in the executive branch, including any wholly
owned government corporation, and any establishment in the legislative
or judicial branch, except the Senate, the House of Representatives,
and the Architect of the Capitol and any activities under his
direction.
* * * * *
(f) A document is filed on a particular day when it is received by
GAO by 5:30 p.m., Eastern Time, on that day. Protests and other
documents may be filed by hand delivery, mail, commercial carrier,
facsimile transmission (202-512-9749), or e-mail ([email protected]).
Please check GAO's Web site (http://www.gao.gov/legal/bidprotest.html)
for current filing information. Hand
[[Page 32430]]
delivery and other means of delivery may not be practicable during
certain periods due, for example, to security concerns or equipment
failures. The filing party bears the risk that the delivery method
chosen will not result in timely receipt at GAO.
* * * * *
0
4. Amend Sec. 21.1 by revising paragraph (g) to read as follows:
Sec. 21.1 Filing a protest.
* * * * *
(g) Unless precluded by law, GAO will not withhold material
submitted by a protester from any party outside the government after
issuing a decision on the protest, in accordance with GAO's rules at 4
CFR part 81. If the protester believes that the protest contains
information which should be withheld, a statement advising of this fact
must be on the front page of the submission. This information must be
identified wherever it appears, and the protester must file a redacted
copy of the protest which omits the information with GAO and the agency
within 1 day after the filing of its protest with GAO.
* * * * *
0
5. Amend Sec. 21.3 by revising paragraphs (c), (d), and (j) to read as
follows:
Sec. 21.3 Notice of protest, submission of agency report, and time
for filing of comments on report.
* * * * *
(c) The agency shall file a report on the protest with GAO within
30 days after the telephone notice of the protest from GAO. The report
provided to the parties need not contain documents which the agency has
previously furnished or otherwise made available to the parties in
response to the protest. At least 5 days prior to the filing of the
report, in cases in which the protester has filed a request for
specific documents, the agency shall respond to the request for
documents in writing. The agency's response shall, at a minimum,
identify whether the requested documents exist, which of the requested
documents or portions thereof the agency intends to produce, which of
the requested documents or portions thereof the agency intends to
withhold, and the basis for not producing any of the requested
documents or portions thereof. Any objection to the scope of the
agency's proposed disclosure or nondisclosure of documents must be
filed with GAO and the other parties within 2 days of receipt of this
list.
(d) The report shall include the contracting officer's statement of
the relevant facts, including a best estimate of the contract value, a
memorandum of law, and a list and a copy of all relevant documents, or
portions of documents, not previously produced, including, as
appropriate: the protest; the bid or proposal submitted by the
protester; the bid or proposal of the firm which is being considered
for award, or whose bid or proposal is being protested; all evaluation
documents; the solicitation, including the specifications; the abstract
of bids or offers; and any other relevant documents. In appropriate
cases, a party may request that another party produce relevant
documents, or portions of documents, that are not in the agency's
possession.
* * * * *
(j) GAO may request or permit the submission of additional
statements by the parties and by other parties participating in the
protest as may be necessary for the fair resolution of the protest. The
agency and other parties must receive GAO's approval before submitting
any additional statements. GAO reserves the right to disregard material
submitted without prior approval.
0
6. Amend Sec. 21.4 by revising paragraphs (b) and (d) to read as
follows:
Sec. 21.4 Protective orders.
* * * * *
(b) If no protective order has been issued, the agency may withhold
from the parties those portions of its report that would ordinarily be
subject to a protective order. GAO will review in camera all
information not released to the parties.
* * * * *
(d) Any violation of the terms of a protective order may result in
the imposition of such sanctions as GAO deems appropriate, including
referral to appropriate bar associations or other disciplinary bodies,
restricting the individual's practice before GAO, prohibition from
participation in the remainder of the protest, or dismissal of the
protest.
0
7. Amend Sec. 21.5 by revising paragraph (b)(1) to read as follows:
Sec. 21.5 Protest issues not for consideration.
* * * * *
(b) Small Business Administration issues. (1) Small business size
standards and North American Industry Classification System (NAICS)
standards. Challenges of established size standards or the size status
of particular firms, and challenges of the selected NAICS code may be
reviewed solely by the Small Business Administration. 15 U.S.C.
637(b)(6).
* * * * *
0
8. Revise Sec. 21.6 to read as follows:
Sec. 21.6 Withholding of award and suspension of contract
performance.
Where a protest is filed with GAO, the agency may be required to
withhold award and to suspend contract performance. The requirements
for the withholding of award and the suspension of contract performance
are set forth in 31 U.S.C. 3553(c) and (d); GAO does not administer the
requirements to stay award or suspend contract performance under CICA
at 31 U.S.C. 3553(c) and (d).
0
9. Amend Sec. 21.12 by revising paragraph (a) to read as follows:
Sec. 21.12 Distribution of decisions.
(a) Unless it contains protected information, a copy of a decision
shall be provided to the protester, any intervenors, and the agency
involved; a copy also shall be made available to the public. A copy of
a decision containing protected information shall be provided only to
the agency and to individuals admitted to any protective order issued
in the protest. A public version omitting the protected information
shall be prepared wherever possible.
* * * * *
0
10. Amend Sec. 21.14 by revising paragraph (c) to read as follows:
Sec. 21.14 Request for reconsideration.
* * * * *
(c) GAO will summarily dismiss any request for reconsideration that
fails to state a valid basis for reconsideration or is untimely. To
obtain reconsideration, the requesting party must show that our prior
decision contains errors of either fact or law, or must present
information not previously considered that warrants reversal or
modification of our decision; GAO will not consider a request for
reconsideration based on repetition of arguments previously raised.
Gary L. Kepplinger,
General Counsel, United States Government Accountability Office.
[FR Doc. E8-12790 Filed 6-6-08; 8:45 am]
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