Federal contractors can now protest all task and delivery orders awarded by civilian agencies.  In an unexpected decision issued last month, the Government Accountability Office ("GAO") ruled that federal contractors can now protest any civilian agency task or delivery order, regardless of the protest grounds or dollar value of the order.  The GAO's decision shattered commonly held expectations that the GAO's limited statutory authority to hear protests of civilian task and delivery orders exceeding $10 million expired at the end of May.  As a result of this decision, federal contractors now have a greater ability to challenge these types of awards even when the dollar value of the order is less than $10 million.

Background on Task and Delivery Order Protests

The National Defense Authorization Act for Fiscal Year 2008 was the last major congressional action to expand contractors' bid protest rights.  This legislation gave GAO exclusive authority over protests of task and delivery orders exceeding $10 million.  Prior to 2008, the GAO's authority over protests of task and delivery orders was limited by the Federal Acquisition Streamlining Act of 1994 ("FASA") to only three particular protest grounds: namely, those protests alleging that the order increased the scope, period, or maximum value of the underlying ID/IQ contract.

The 2008 legislation included a three-year sunset provision that was anticipated to end the GAO's jurisdiction over these protests on May 27, 2011.  The intention of the sunset provision was to allow GAO and Congress to assess the impact of the GAO's expanded jurisdiction before deciding whether to extend or limit that authority.  As was expected to result from the GAO's expanded authority to hear these new types of protests, the number of protests filed has significantly increased each year since the GAO opened its doors to task and delivery order protests valued over $10 million.

Technatomy Corporation, B-405130 (June 14, 2011)

In light of this sunset provision, the government moved to dismiss a recently filed task order protest, arguing that although the protest was filed before May 27, 2011, the GAO lost its jurisdiction to decide the protest once the May 27 sunset date passed.  However, in Technatomy Corporation, B-405130 (June 14, 2011), the GAO denied the motion to dismiss and held that it had jurisdiction to hear not only the particular protest at issue but also all protests of task or delivery orders issued by a civilian agency, regardless of the dollar value of the order or the allegations raised in the protest.

Whereas many expected the GAO to decide that the impact of the May 27, 2011, sunset date was to revert the GAO's jurisdiction back to the old standard under FASA, the GAO adopted a literal interpretation of 41 U.S.C. § 4106(f) (formerly 41 U.S.C. § 253j(e)) and concluded that its protest authority is now even broader.  The GAO interpreted the three-year sunset provision to remove: (1) the general bar on task and delivery order protests; (2) the narrow exception created by FASA for protests alleging that the order exceeded the scope, period, or maximum value of the underlying contract; and (3) the broader exception created in 2008 that allowed protests on any grounds for orders valued over $10 million.

Impact of the Decision and Remaining Questions

This decision opens the door to many protests that were previously foreclosed by the $10 million jurisdictional threshold.  Notably, however, Department of Defense ("DoD") and National Aeronautics and Space Administration ("NASA") task and delivery order protests remain subject to the $10 million limitation.  This is the result of the National Defense Authorization Act for Fiscal Year 2011, passed earlier this year, which extended the GAO's jurisdiction over task and delivery order protests in anticipation of the May sunset date but only for orders over $10 million placed under DoD and NASA contracts.  The exclusion of civilian agency task and delivery orders from this extension was apparently unintentional, and the Senate has since passed a bill that would also extend the GAO's jurisdiction over civilian agency task and delivery orders over $10 million until September 30, 2016.

It awaits to be seen how Congress will respond to the GAO's surprising decision to allow all civilian agency task and delivery order protests, especially in light of the Senate bill currently on the table that would, if passed, reinstate the $10 million jurisdictional threshold.  Because the GAO surprisingly has interpreted the sunset provision as expanding, rather than extinguishing, its authority to hear protests arising from task and delivery orders of any value, Congress may act quickly to address the different treatment of civilian versus DoD and NASA protests. 

It is yet to be determined whether the U.S. Court of Federal Claims will follow the GAO's reasoning and become another available forum for filing a task or delivery order protest.  It is also unclear how individual agencies will treat the Technatomy Corporation decision and whether they will follow the GAO's recommendation to allow these types of protests.  At least until Congress acts to reinstate the $10 million threshold or otherwise amend the GAO's protest jurisdiction, contractors can--and should--take advantage of their expanded protest ability before the GAO.