Contractors may now protest any civilian agency task or delivery order under indefinite delivery/indefinite quantity ("IDIQ") contracts, the U.S. Government Accountability Office ("GAO") ruled on June 14 in denying an agency's request to dismiss the Technatomy Corporation protest. This ruling is important because GAO's limited statutory authority to hear protests of civilian task or delivery orders exceeding $10 million was viewed by many experts as having expired on May 27 without reauthorization from Congress.1
GAO's decision now begs three questions:
- Will Congress act quickly to re-institute the same $10 million protest limitation on civilian agencies that still applies to defense agencies?
- Will the U.S. Court of Federal Claims agree with GAO's analysis?
- Will the Executive branch honor GAO's unexpected opinion?
Until these questions are resolved, perhaps the only thing that remains clear is that if you want to protest a civilian agency task or delivery order to the GAO, your case will be heard assuming it meets the requisite bid protest regulations.
Legislation Limiting GAO's Authority
Until recent years, the Federal Acquisition Streamlining Act of 1994 ("FASA") had limited the GAO's authority over protests of task and delivery orders under IDIQ contracts only to cases in which the protest alleged that the order increased the scope, period, or maximum value of the contract under which the order was issued.2 Then, following enactment of the National Defense Authorization Act ("NDAA") for Fiscal Year 2008, GAO gained the limited authority to review task or delivery orders exceeding $10 million for both Department of Defense and civilian agency contracts. Congress placed a three-year sunset provision on such authority (i.e., a May 27, 2011 expiration date), in order to assess the impact of the protests on the federal procurement system before deciding whether to extend (or let expire) the authority.
Earlier this year, the enactment of the NDAA for Fiscal Year 2011 extended through September 30, 2016 GAO's supplemental authority over Department of Defense task and delivery order procurements exceeding $10 million. Notably, this legislation amended only Title 10 of the U.S. Code (covering military procurements) but not Title 41 (covering civilian agency procurements). In recent months, both chambers of Congress considered legislation to extend GAO's supplemental authority over protests of civilian agency task and delivery orders. As drafted, H.R. 899 and S. 498 would similarly amend Title 41 by changing the sunset date of GAO's supplemental authority over civilian task and delivery order procurements exceeding $10 million from May 27, 2011 to September 30, 2016.
The Senate passed S. 498 by unanimous consent on May 12. The House Oversight and Government Reform Committee approved H.R. 899 by voice vote on March 10, but the bill has not yet been approved by the entire chamber. Given the legislative history of these bills, there is good reason to believe that H.R. 899 will eventually pass in the House, but until then, GAO's June 14 Technatomy Corporation decision appears to be the only guidance available at this time regarding the state of bid protests covering civilian agency task and delivery orders.
In Technatomy Corporation, the GAO interpreted the 2008 NDAA as having amended FASA such that the three-year sunset provision applied to the entire statutory subsection – 41 U.S.C. § 253j(e)3 – granting GAO the exclusive, but limited protest authority over civilian agency task and delivery orders exceeding $10 million. Following the sunset of this provision on May 27, the GAO concluded that its authority over task and delivery order protests was no longer statutorily limited, but instead "reverted" to its broader authority prior to FASA – during which the scope of GAO's authority to hear protests under the Competition in Contracting Act did not distinguish between protests of contracts and protests of task and delivery orders. Thus, GAO concluded in Technatomy Corporation that the sunset of the statutory provision "eliminates any bar to our jurisdiction to hear and issue decisions concerning bid protests arising from task or delivery orders of any value." (emphasis added). Because the GAO has unexpectedly interpreted the sunset of 41 U.S.C. § 253j(e) as expanding – rather than extinguishing – its civilian task and delivery order protest authority regarding awards exceeding $10 million, it is quite possible (if not likely) that Congress will act quickly to address the current disparity in GAO's authority to hear protests of all civilian task orders but only defense task orders exceeding $10 million. Until then, however, it is clear that GAO will hear protests of civilian agency task or delivery orders under IDIQ contracts without regard to their monetary value.
How Does This Impact Task and Delivery Protests at the U.S. Court of Federal Claims?
If GAO no longer has exclusive authority to hear task order protests under 41 U.S.C. § 253j(e), the U.S. Court of Federal Claims may now also be a potential venue for protests of civilian agency task and delivery orders. As noted above, the statute had previously limited such task and delivery order protests of awards greater than $10 million exclusively to GAO. Thus, until Congress acts, it would appear that the U.S. Court of Federal Claims now has concurrent jurisdiction over task or delivery orders of any value. Presumably, the Court of Federal Claims will decide this issue for itself in the coming weeks or months.
How Will Civilian Agencies React?
Despite GAO's solid analysis, it is possible that civilian executive agencies could opt not to follow GAO's decision. GAO is an arm of Congress and its decisions are issued as "recommendations" (albeit with the requirement that an agency report to Congress any time an agency refuses to follow a recommendation). This is not unprecedented. For example, in 2009, GAO and the Executive branch took contrary statutory interpretations of certain small business procurement requirements. The Office of Legal Counsel in the Department of Justice went so far as to issue an opinion instructing agencies to ignore any GAO decisions to the contrary. Congress eventually amended the statute at issue to clarify the procurement requirements that were affected – something that should be expected here in due course as well.