- The Conference Report for the FY 2018 National Defense Authorization Act has been released.
- This provision requires disclosure of a redacted source selection award determination for an award greater than $100 million, and an option to request this disclosure for small businesses or nontraditional contractors for awards greater than $10 million.
- This provision also provides enhanced opportunities for follow-up questions after a debriefing.
- The NDAA also requires a DoD pilot program on payment of costs for denied GAO bid protests, to begin in two years and last for three years.
Reform provisions relating to debriefing rights and bid protests at the Government Accountability Office are included in the Conference Report for the Fiscal Year 2018 National Defense Authorization Act, released yesterday, November 9, 2017, by the Senate and House Armed Services Committees. The Conference Report reconciles the respective bills of the House and Senate and authorizes $626 billion in base budget spending and $66 billion for the Overseas Contingency Operations fund. The NDAA carries enormous significance for Department of Defense procurement policy and priorities, and as is the case each year, the NDAA includes significant acquisition reforms. We report here on the provisions relating to debriefings, protests and the contract award process, which are of significant import to DoD and its contractors, as well as Congress and GAO.
Enhanced Post-Award Debriefing Rights
The Senate version of the NDAA contained an expansive section providing for “Enhanced Post-Award Debriefing Rights,” which required new DoD regulations to establish procedures for enhanced debriefings, including the release of “all information that otherwise would be releaseable in the course of a bid protest challenge to an award.” As we previously reported, these provisions would be “robust” and would provide better information to disappointed bidders.
The House modified this provision, limiting the released information to a redacted disclosure of the agency’s written source selection award determination, adding an award threshold of $100 million for this mandatory disclosure, and adding an option to request this disclosure for small businesses or nontraditional contractors in the case of awards in excess of $10 million.
With the benefit of this disclosure, disappointed bidders will have better information to understand the evaluation and award decision and will be able to engage in better-informed up-front analysis of their potential protest grounds before filing a protest based on the redacted version of the source selection decision. The Conference Report also eliminates a Senate provision requiring protests arising from the DoD to be resolved by GAO within 65 days, which would have resulted in compressed timeframes for many protesters, and which was opposed by GAO.
The NDAA provision on Enhanced Post-Award Debriefing Rights is now at Section 818. Paragraph (a), “Release of Contract Award Information,” requires new DoD regulations within 180 days to establish procedures for enhanced post-award debriefings, to include:
- In the case of an award in excess of $100 million, a requirement for “disclosure of the agency’s written source selection award determination, redacted to protect the confidential and proprietary information of other offerors for the contract award,” and, in the case of an award above $10 million, an option to request this disclosure for a small business or nontraditional contractor.
- “A requirement for a written or oral debriefing for all contract awards and task or delivery orders valued at $10,000,000 or higher.”
- “Provisions ensuring that both unsuccessful and winning offerors are entitled to the disclosure described in paragraph (1) and the debriefing described in paragraph (2).”
- “Robust procedures, consistent with … the Federal Acquisition Regulation, to protect the confidential and proprietary information of other offerors.”
Paragraph (b), “Opportunity for Follow-up Questions,” provides, via statutory amendments, for enhanced opportunities for follow-up questions following a post-award debriefing, with the debriefing held open until the questions are answered, and an extension of time to trigger an automatic stay of performance.
Paragraph (b) provides “an opportunity for a disappointed offeror to submit, within two business days after receiving a post-award debriefing, additional questions related to the debriefing.” The agency must respond in writing to any additional question within five business days, and the debriefing is not concluded until the agency delivers its written responses. The day the government delivers the written responses in turn begins the five-day period to file a protest that triggers an automatic stay.
As we reported previously, these provisions are based on the basic principle that better debriefings should improve communications and reduce protests. The procedures adopted by the NDAA will provide better information to disappointed bidders and could improve the usefulness of the debriefing process to the private sector and the government and improve the fairness and transparency of the underlying competition. It remains to be seen how these procedures will be implemented by DoD agencies.
The conference committee did not adopt all provisions from the Senate version of this section. The conference omitted the requirement for an option for “access to an unredacted copy of the source selection award determination and the supporting agency record for outside counsel or other appropriate outside representative” for awards valued at $10 million or higher. This provision could have imposed significant burdens on DoD agencies, but disappointed bidders will still have the opportunity to review this information through the regular bid protest process.
The significant new information available through the enhanced debriefing procedures will be the written source selection award determination, redacted to protect the proprietary information of other offerors. In a high-value procurement, this document should contain the most important information to assist a company in better understanding why it lost the competition, and/or determining whether it has valid grounds for a protest. If a bidder, with the benefit of this additional information about the evaluation and award decision, still believes it was treated improperly, that the evaluation was unreasonable or that there was a violation of procurement regulations, it still has the option to protest to the agency, to GAO or to the U.S. Court of Federal Claims.
Pilot Program on Payment for Denied Protests
The NDAA includes a “Pilot Program on Payment of Costs for Denied Government Accountability Office Bid Protests” at Section 827. Paragraph (a) requires that the Secretary of Defense “shall carry out a pilot program to determine the effectiveness of requiring contractors to reimburse the Department of Defense for costs incurred in processing covered protests.”
The pilot program will begin two years after the enactment of the NDAA and last three years, to be followed by a report to Congress assessing the effectiveness of the pilot program. A “covered protest” means a bid protest that was “(1) denied in an opinion issued by the Government Accountability Office; (2) filed by a party with revenues in excess of $250,000,000 (based on fiscal year 2017 constant dollars) during the previous year; and (3) filed on or after October 1, 2019 and on or before September 30, 2022.” Under this definition, a protester could avoid the imposition of costs by withdrawing its protest prior to a published opinion issued by GAO, providing an incentive to withdraw a protest that is unlikely to succeed.
The Senate version of the NDAA contained a more comprehensive section on “Government Accountability Office bid protest reforms,” which included a more specific and detailed provision on the payment of costs for denied protests, providing that large companies must pay to DoD the “costs incurred for processing a protest at [GAO and DoD],” if the protest were ultimately denied by GAO. There was also a provision on the withholding of payments above the incurred costs of incumbent contractors that file protests. The House added the amendment to create a three-year pilot program for costs for denied protests and increased the triggering threshold from $100 million to $250 million. The House dropped the provision relating to protests by incumbent contractors.
The current NDAA provision, as a statutory mandate, is much different than the original provision contained in the Senate’s version, which provided a detailed statutory mechanism for payment of costs for denied protests. Section 827, by contrast, requires the DoD to carry out a pilot program, but does not provide the details of what procedures that program should include. DoD has two years to work out the details of this pilot program, may need to implement it through regulations, and may receive additional guidance from Congress in future NDAA reforms. It remains to be seen how DoD will formulate the pilot program, what costs will be imposed on losing contractors, and what the impact will be on the protest system. In the meantime, interested parties to the protest system have two years to provide input to DoD on how the pilot program should be implemented.