Yesterday, the Court of Federal Claims issued a decision expanding its jurisdiction over bid protests for task and delivery orders issued under multiple-award indefinite-delivery/indefinite-quantity (IDIQ) contracts awarded by federal civilian agencies under Title 41 of the U.S. Code.  MED Trends, Inc., v. United States, No. 11-420. Under this decision, government contractors may file protests of such orders at the court regardless of the grounds for the protest or the value of the order.  Previously, the court could decide protests of task and delivery orders only where the protester alleged that the order increased the scope of the contract under which the order is issued, and the Government Accountability Office (GAO) enjoyed exclusive jurisdiction over all other protests of task and delivery orders valued at over $10 million.

In this case, MED Trends challenged the award of a task order to Microtechnologies, LLC for maintenance and operation of an Integrated Management Information System on behalf of the Occupational Safety and Health Administration.  The task order was issued under the Veteran Technology Services (VETS) government-wide acquisition contract administered by the General Services Administration (GSA).  MED Trends challenged the agency's price analysis and best-value tradeoff as both violating the Federal Acquisition Regulation (FAR) and as arbitrary and capricious.

The Government and Intervenor (Microtechnologies) filed motions to dismiss for lack of subject-matter jurisdiction under the Federal Acquisition Streamlining Act of 1994 (FASA).  41 U.S.C. § 4106(f).   Under FASA, for task and delivery orders under Title 41, contractors could protest only situations where "the order increases the scope, period or maximum value of the contract under which the order is issued."  41 U.S.C. § 253j(e) (1994). [1]  In 2008, as part of the National Defense Authorization Act (NDAA) for Fiscal Year 2008, Pub. L. No. 110-181, Congress permitted protests of task and delivery orders valued in excess of $10 million regardless of the bases of protest, but limited jurisdiction of those protests exclusively to the GAO.  41 U.S.C. § 253j(e) (2008).  The 2008 NDAA did not grant the court any new subject matter jurisdiction over task or delivery order protests.  However, the 2008 NDAA included a three-year sunset provision expiring as of May 27, 2011.  41 U.S.C. § 253j(e)(3) (2008).

In the Fiscal Year 2011 NDAA, Pub. L. No. 111-383, Congress extended the sunset date for protests of task and delivery orders under Department of Defense (DoD) and National Aeronautical and Space Administration (NASA) contracts (Title 10) through September 30, 2016.  Similar legislation with regard to task and delivery orders issued under civilian contracts (Title 41) is pending in both Houses of Congress but has not been enacted.  The Senate passed its version, S. 498, by unanimous consent on May 12, 2011. While the House Committee on Oversight and Government Reform approved a companion bill, H.R. 899, on March 17, 2011, it has not been addressed by the full House.  Because of Congress' failure to extend the sunset date for protests of task and delivery orders under Title 41, the sunset provision of the 2008 NDAA has become effective.

In moving to dismiss, the Government and Intervenor argued that under FASA, the GAO had exclusive jurisdiction to hear task and delivery order protests in excess of $10 million.  The court agreed that had the protest been brought prior to the sunset date, the court could not exercise jurisdiction.  Under the court's reading of the sunset provision of the 2008 NDAA, however, the GAO's exclusive jurisdiction expired as of May 27, 2011.  The court noted that the current version of the jurisdictional statute clearly applied the sunset provision to the entirety of § 4106(f) and not just to the new grant of exclusive jurisdiction to GAO for protests of awards in excess of $10 million.  With the expiration of § 4106(f), contractors may file protests at the court for task and delivery orders under Title 41 under the court's general jurisdiction over bid protests.  28 U.S.C. § 1491(b)(1).

The court acknowledged that the legislative history of the 2008 NDAA could be viewed as contrary to its decision, as the history suggests that Congress may have intended to limit the sunset provision to the exclusive grant of jurisdiction to the GAO for protests of orders in excess of $10 million.  Nevertheless, the court ruled that that plain and unambiguous language of the legislation precluded speculation about congressional intent.  The court went on to deny the protest on the merits.

Under MED Trends, contractors may now file protests of civilian agency task and delivery order awards at the Court of Federal Claims, regardless of the order's size or grounds for protest.  We recently wrote about the GAO's jurisdictional decision in Technatomy Corp., B-405130, June 14, 2011, which similarly interpreted the 2008 NDAA sunset provision and permitted protests at the GAO for task and delivery orders under Title 41 regardless of amount or protest grounds.

By contrast, because the sunset provision for protests of the DoD and NASA task and delivery orders issued under Title 10 contracts was extended to September 30, 2016, protests at the court for such orders will be permitted only if the protestor alleges that "the order increases the scope, period, or maximum value of the contract under which the order is issued."  10 U.S.C. § 2304c(e).  GAO protests of orders under Title 10 must either fall under the scope exception or involve orders valued in excess of $10 million.

This unsettled state of the law offers contractors the ability to challenge civilian agency task and delivery order awards in ways that are arguably contrary to the intent of Congress in enacting FASA.  The window for such protests may, however, be relatively limited if Congress extends the sunset date under Title 41.  Wiley Rein will continue to monitor any legislative developments regarding extension of the sunset date under Title 41.