FAR Council Publishes Rule on Raised Threshold for Task and Delivery Order Protests
On May 1, 2018, the Federal Acquisition Regulatory (FAR) Council published a final rule amending FAR 16.505(a)(10) to raise the minimum threshold for Government Accountability Office (GAO) protests of certain task and delivery order awards from $10 million to $25 million. While Section 835 of the National Defense Authorization Act for Fiscal Year 2017 immediately raised the threshold upon passage, this change implements the modification into the FAR.
The increased threshold changed the jurisdiction that GAO previously held for years over task and delivery order protests valued over $10 million. Notably, under the final rule, protests alleging the improper award of a task or delivery order due to the award increasing the "scope, period, or maximum value of the contract" can be filed without regard to the amended minimum threshold. See FAR 16.505(a)(10). The Final Rule is effective on May 31, 2018, and applies only to DoD, NASA and the U.S. Coast Guard multiple-award procurements under FAR Subpart 16.5. The $10 million minimum threshold for GAO protests of civilian agency task and delivery orders remains unchanged.1
According to the Final Rule, the amended protest threshold is anticipated to result in savings for the GAO and executive agencies by eliminating "protests of orders valued between $10 million and $25 million based on dollar value," and purports "some benefits to offerors or contractors who win awards and will no longer need to expend resources defending challenges to the award."2 Of course, this also means that unsuccessful offerors with legitimate complaints about the validity of these task or delivery order awards will no longer be able to utilize GAO's protest process. The U.S. Court of Federal Claims has limited jurisdiction to hear protests of task and delivery order awards, so without GAO, some contractors may be left unable to seek recourse through a bid protest.
Stay tuned for more blog posts covering additional topics in the near future from Holland & Knight's Government Contracts Team.
1 The final rule in fact amends the FAR to be consistent with the GAO Civil Task and Delivery Order Protest Authority Act of 2016, which made permanent GAO’s authority to hear protests of civilian agency task and delivery orders.