May 11, 2016

GAO Proposes Changes to Bid Protest Regulations, Including Imposing a Filing Fee

Holland & Knight Government Contracts Blog
Gregory R. Hallmark

On April 15, 2016, the Government Accountability Office ("GAO") published a number of proposed changes to the procedural rules that govern bid protests in that forum. See 81 Fed. Reg. 22197. The primary purpose is to implement a new electronic filing system for use in bid protests, called the Electronic Protest Docketing System ("EPDS"). GAO also took the opportunity to add several significant new procedural rules, including a clarification about the timeliness of certain protests, as "administrative changes."

The proposed changes do not go into effect immediately and may yet be changed. The deadline for public comments on the proposed rule is May 16, 2016, and GAO will issue the final version sometime thereafter. 

As noted, GAO is implementing a new electronic filing and document dissemination system, as mandated by recent legislation, to replace the current practice that generally relies on email.  EPDS will be the mandatory method to submit protests and other filings, except in protests involving classified material. Many of EPDS’s details will be hashed out later, as the system is still under development.  GAO’s website states that EPDS will be established "this summer."

Importantly, GAO will require a new fee to file a protest, as a way to recoup the costs to develop and maintain EPDS. GAO anticipates the fee will be $350 at first. By comparison, the Court of Federal Claims currently charges a $400 filing fee.  As noted in this Blog previously, Congress specifically authorized GAO to charge a fee in the Consolidated Appropriations Act of 2014.

The proposed rule states that a filing in EPDS "constitutes notice to all parties" of the filing. That suggests the parties will automatically receive notice of filings through EPDS, much like the Court of Federal Claims’ Electronic Case Filing ("ECF") system provides automatic service to all parties of a filing.  Indeed, GAO’s website states that "EPDS will also provide automatic notice of a protest to the agency."

This automatic notice mechanism could have important ramifications for protesters that seek the "automatic stay," the Competition in Contracting Act’s ("CICA") rule that an agency must withhold award or suspend performance for the duration of the protest if GAO notifies the agency of the protest before a certain deadline. Critically, it is not the filing of a protest that triggers the automatic stay, but rather GAO’s notice to the agency of the filing.  Under the existing system, protesters depend on GAO’s clerk to place a telephone call to the agency to provide the all-important notice, which has the practical effect that they must file well before the deadline to give GAO ample time to make the call. EPDS’s automatic notice mechanism could change that. It remains to be seen whether GAO will rely solely on EPDS’s automatic notice and cease notifying agencies by telephone, and also whether the Court of Federal Claims will consider the CICA stay to be triggered by the automated notice. 

GAO also proposed several notable "administrative changes" to its procedural rules, unrelated to the new electronic filing system, including the following:

  • GAO proposes to revise its timeliness rules to address protests of solicitation improprieties that arise after final proposals have been submitted. 
    A protest of a solicitation impropriety is generally due prior to the next deadline for proposals. See 4 C.F.R. 21.2(a)(1). All other protests are due within ten days after the basis of protest is known or should have been known, or after the debriefing, if a debriefing has been timely requested and is legally required.  See 4 C.F.R. 21.2(a)(2).  GAO has held in its decisions that when a solicitation impropriety is introduced after final proposals have been submitted, the ten-day rule of paragraph (a)(2) applies. 
    The proposed rule "resolves a potential uncertainty," in GAO’s words, that arises when that ten-day period is pending at the time the protester requests its debriefing. The existing version of paragraph (a)(2) states that when an offeror requests a required debriefing, it must wait until the debriefing to file a protest on any basis: "In such cases, with respect to any protest basis which is known or should have been known either before or as a result of the debriefing, the initial protest should not be filed before the debriefing date."  But GAO has ruled in its protest decisions that the mandatory debriefing waiting period does not apply to a protest of a solicitation impropriety introduced after the last deadline for proposals, notwithstanding the regulation’s statement that it applies to "any protest basis." 
    GAO is now proposing to amend the regulations to bring them in line with its case law. The revised regulations would make clear that an offeror may not wait until its debriefing to protest a solicitation impropriety that arises after the final closing time for proposals. Rather, such protests must be filed within ten days after the alleged impropriety is known or should have been known. 
  • GAO proposes to incorporate into its bid protest regulations an existing statutory rule that GAO may hear protests of task and delivery orders, but only those valued at more than $10 million. GAO has been applying this jurisdictional rule for years, but it is not currently stated expressly in the bid protest regulations.
    Perhaps more interestingly, GAO took this opportunity to point out that its authority to hear task order protests for civilian agency procurements is set to expire very soon—October 1, 2016.  Congress has permanently extended GAO’s jurisdiction over task order protests for defense agency procurements but, oddly, has not yet done so for civilian agency procurements. Notably, the U.S. House of Representative’s Fiscal Year 2017 National Defense Authorization Bill contains a provision that would permanently extend GAO’s task order jurisdiction for civilian agency procurements. See H.R. 4909, § 1862.
  • As noted above, a protest filed at GAO within a certain deadline triggers an automatic suspension of performance, if the award has been made, or a requirement that the agency withhold making an award, if an award has not yet been made. However, CICA permits agencies to override this automatic stay under particular circumstances. Currently, GAO and protesters do not necessarily have any way to know whether an agency has decided to override the automatic stay.
    The proposed rule would require the agency to file a notification when it overrides the automatic stay. While the stated purpose for this rule change is to ensure that GAO knows of the override, it would appear to have the practical effect of ensuring that the protester will also know.  A protester may challenge an agency’s override decision only at the Court of Federal Claims. 
  • The proposed rule would provide a welcome clarification of an ambiguity regarding the deadline for the agency’s submission of its response to the protester’s document requests. The response has long been due five days before the agency report. But where the fifth day falls on a weekend or holiday, the existing rules do not specify whether the agency must file its response on the last business day before the weekend or holiday or the next business day after the weekend or holiday.  Often, the agency will file the response on the next business day, which can leave insufficient time to resolve any disputes over the scope of the agency’s proposed document production prior to its filing of the agency report.  Protesters are then left litigating objections to the document production during the 10-day period for responding to the agency report and sometimes does not receive documents initially withheld until several days into the 10-day period.
    To resolve the ambiguity, the proposed rule would require that the agency submit its response on the last business day before the weekend or holiday. 
  • GAO has long held that if a protester fails to address a protest ground in its response to the agency report (called "comments"), the protest ground is deemed abandoned and GAO will dismiss it. The proposed rule would clarify that a "protest allegation or argument" shall be dismissed where the agency report responds to the allegation or argument "but the protester’s comments do not address the agency’s response."
  • Protest counsel often spend substantial time and effort preparing redacted versions of protest filings and negotiating over what information will become publicly available or will be redacted. The current process for negotiating redactions is relatively unstructured. The proposed rule would impose more structure on this process. It would require the party filing a document to distribute proposed redacted version within one day and to file a final redacted version within five days—or, if the parties cannot agree on redactions, to submit the dispute to GAO for resolution.
    In current practice, it is not uncommon for parties to skip the redaction process altogether amidst the rush of quick-turnaround deadlines. The rule change, if it becomes final, may create a good deal more work for protest counsel, under tight time pressure. 
  • Lastly, GAO proposes a more structured process for successful protesters to pursue reimbursement of their protest costs from agencies. While the basic process is largely unchanged, the proposed rule would make it mandatory that the agency and protester respond to each other’s submissions and would establish new deadlines for those filings. These changes should facilitate quicker resolution of cost claims. 

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