Government Accountability Office, Administrative Practice and Procedure, Bid Protest Regulations, Government Contracts, 15098-15101 [E8-5621]

Agencies

• Government Accountability Office

[Federal Register Volume 73, Number 56 (Friday, March 21, 2008)]
[Proposed Rules]
[Pages 15098-15101]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-5621]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 73, No. 56 / Friday, March 21, 2008 / 
Proposed Rules

[[Page 15098]]



GOVERNMENT ACCOUNTABILITY OFFICE

4 CFR Part 21


Government Accountability Office, Administrative Practice and 
Procedure, Bid Protest Regulations, Government Contracts

AGENCY: Government Accountability Office.

ACTION: Proposed rule.

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SUMMARY: The Government Accountability Office (GAO) is proposing to 
amend its Bid Protest Regulations, promulgated in accordance with the 
Competition in Contracting Act of 1984 (CICA), to implement the 
requirements in sec. 326 of the National Defense Authorization Act for 
Fiscal Year 2008, enacted on January 28, 2008, and to make certain 
administrative changes. Regarding sec. 326 of the National Defense 
Authorization Act for Fiscal Year 2008, the proposed amendments to 
GAO's Bid Protest Regulations implement the legislation's provisions 
related to the bid protest process concerning Office of Management and 
Budget (OMB) Circular A-76, as revised on May 29, 2003. In this regard, 
the legislation expands the protest rights of Federal employees in an 
A-76 competition to grant ``any one individual'' who represents the 
majority of affected employees the status of an ``interested party'' to 
file a protest at GAO or the status of an intervenor to participate in 
a protest filed at GAO, to remove the current restriction limiting 
protests of A-76 competitions to those competitions affecting 65 or 
more full-time equivalent employees of a Federal agency, and to allow a 
protest of a decision to convert a function performed by Federal 
employees to private sector performance without a competition. At this 
time, GAO believes that these proposed revisions are the only 
regulatory changes necessary to implement the statutory requirements 
expanding the protest rights of Federal employees in an A-76 
competition. Regarding administrative changes, the proposed amendments 
to GAO's Bid Protest Regulations are to reflect current practice and to 
streamline the bid protest process. GAO welcomes comments on these 
proposed revisions.

DATES: Comments must be submitted on or before April 21, 2008.

ADDRESSES: Comments may be submitted by e-mail at 
bidprotestregs@gao.gov or by facsimile at 202-512-9749. Due to delivery 
delays, submission by regular mail is discouraged. Comments may be sent 
by Federal Express or United Parcel Service addressed to: Ralph O. 
White, Assistant General Counsel, Government Accountability Office, 441 
G Street, NW., Washington, DC 20548. GAO intends to make all comments 
filed available to the public, including names and other identifying 
information. Information in a submission that the sender does not 
believe should be released should be clearly marked.

FOR FURTHER INFORMATION CONTACT: Michael R. Golden (Managing Associate 
General Counsel), Ralph O. White (Assistant General Counsel) or 
Jonathan L. Kang (Senior Attorney), 202-512-3315.

SUPPLEMENTARY INFORMATION: 

Comments Invited

    GAO is not subject to the Administrative Procedures Act and 
accordingly is not required by law to seek comments before issuing a 
final rule. However, GAO has decided to invite interested persons to 
participate in this rulemaking by submitting written comments regarding 
the proposed revisions. Application of the Administrative Procedures 
Act to GAO is not to be inferred from this invitation for comments.
    GAO will consider all comments received on or before the closing 
date for comments. GAO may change the proposed revisions based on the 
comments received.

Background

    GAO determined to undertake these revisions to GAO's Bid Protest 
Regulations as the result of statutory changes in GAO's bid protest 
jurisdiction in the Department of Homeland Security Appropriations Act, 
2008 (enacted as Division E of the Consolidated Appropriation Act, 
2008, Pub. L. 110-161, 121 Stat. 1844, on December 26, 2007), and the 
National Defense Authorization Act for Fiscal Year 2008. Section 568 of 
the Department of Homeland Security Appropriations Act, 2008, made the 
Transportation Security Administration (TSA) subject to the Federal 
Acquisition Regulation such that, as of the June 23, 2008 effective 
date, GAO has protest jurisdiction over TSA procurements. Section 326 
of the National Defense Authorization Act for Fiscal Year 2008 expands 
the protest rights of Federal employees in an A-76 competition or non-
competitive decision to convert a function performed by Federal 
employees to private sector performance. Section 843 of the National 
Defense Authorization Act for Fiscal Year 2008 amends GAO's 
jurisdiction under 10 U.S.C. 2304c(e) and 41 U.S.C. 253j(e) to 
authorize GAO to hear protests of the award or proposed award of 
certain task and delivery orders under certain indefinite-delivery/
indefinite-quantity contracts.
    After careful consideration, GAO concluded that no change in GAO's 
Bid Protest Regulations is necessary in order to effectuate the 
provisions of sec. 568 of the Department of Homeland Security 
Appropriations Act, 2008, with respect to TSA procurements, or to 
effectuate the provisions of sec. 843 of the National Defense 
Authorization Act for Fiscal Year 2008, with respect to task or 
delivery orders. The proposed revisions to GAO's Bid Protest 
Regulations to implement sec. 326 of the National Defense Authorization 
Act for Fiscal Year 2008 and to make certain administrative changes are 
set forth below:

Interested Party

    In accordance with sec. 326 of the National Defense Authorization 
Act for 2008, GAO proposes to revise paragraph (a)(2) and to add new 
paragraphs (a)(2)(A) and (a)(2)(B) to 4 CFR 21.0, to expand the 
definition of an interested party to include, in any public-private 
competition conducted under OMB Circular A-76 regarding performance of 
an activity or function of a Federal agency, or any decision to convert 
a function performed by Federal employees to private sector performance 
without a competition under OMB Circular A-76, the official who 
submitted the agency tender in any such

[[Page 15099]]

competition and any one individual designated as the representative of 
the majority of affected Federal employees, and to delete the current 
restrictions on protests of competitions concerning fewer than 65 full 
time equivalent employees of a Federal agency.

Intervenor

    In accordance with sec. 326 of the National Defense Authorization 
Act for 2008, GAO proposes to revise paragraph (b)(2) of 4 CFR 21.0, to 
expand the definition of an intervenor to include, in any public-
private competition conducted under OMB Circular A-76 regarding 
performance of an activity or function of a Federal agency, or any 
decision to convert a function performed by Federal employees to 
private sector performance without a competition under OMB Circular A-
76, any one individual designated as the representative of the majority 
of affected Federal employees, and to delete the current restrictions 
on protests of competitions concerning fewer than 65 full time 
equivalent employees of a Federal agency.

Contracting Agency

    For administrative purposes, GAO proposes to delete the definition 
of ``contracting agency'' at paragraph (d) of 4 CFR 21.0, and to 
replace the term ``contracting agency'' with the term ``agency'' 
throughout 4 CFR 21. GAO also proposes to revise paragraph (c) of 4 CFR 
21.0 to clarify that the definition of ``federal agency'' also applies 
to the general term ``agency.'' It is the opinion of GAO that these 
administrative changes will clarify and simplify GAO's Bid Protest 
Regulations.

Filing of Documents

    It has been GAO's experience that bid protest documents are 
occasionally directed to GAO departments unrelated to GAO's bid protest 
process. To clarify how a document is ``filed'' under GAO's Bid Protest 
Regulations, GAO proposes to revise paragraph (g) of 4 CFR 21.0, newly 
redesignated as paragraph (f), to provide GAO's designated facsimile 
transmission number and email address for bid protests, and to advise 
parties to check GAO's Web site to ensure that the contact information 
is current. GAO also proposes to remove a provision in 4 CFR 21.0 
regarding electronic filing to conform with current practice and to 
coordinate with changes to paragraph (b) of 4 CFR 21.4, which are 
discussed below.

Disclosure of Protest Materials

    The GAO bid protest process is covered by the GAO disclosure of 
materials regulations in 4 CFR part 81, subject to the restrictions of 
our protective order process. To ensure that the practice of the GAO 
bid protest process is consistent with the GAO disclosure of materials 
regulations and to advise that the GAO will not generally provide filed 
materials to the public while a protest is pending, GAO proposes to 
revise paragraph (g) of 4 CFR 21.1 to reflect that GAO will disclose 
protest materials submitted by any party after issuing a decision on 
the protest, in accordance with GAO's rules at 4 CFR part 81 and the 
protective order process.

Document Requests to Agencies

    In cases in which the protester has filed a request for specific 
documents, GAO's Bid Protest Regulations currently require that the 
agency provide, at least 5 days prior to the filing of its report, a 
list of the documents or portions of documents which the agency has 
released to the protester or intends to produce in its report and of 
the documents or portions of documents requested that it intends to 
withhold, and the reasons for the proposed withholding. It is GAO's 
experience that the index of documents provided by agencies is often 
not sufficient to answer specific document requests and does not 
identify what is being withheld and why. In order to clarify what GAO 
requires from agencies in response to specific document requests, GAO 
proposes to revise paragraph (c) of 4 CFR 21.3 to require that an 
agency's response to a document request identify, at a minimum, whether 
requested documents exist, which of the documents or portions of 
documents the agency intends to produce, which of the documents or 
portions of documents the agency intends to withhold, and the basis for 
withholding any of the requested documents. GAO understands that this 
proposed revision may be perceived by agencies as an additional 
requirement; however, the language of the proposed revision tracks 
closely to the original intent of GAO in 4 CFR 21.3(c).

Document Requests to Other Parties

    GAO's Bid Protest Regulations currently limit document requests to 
those made by the protester to the agency, and in certain 
circumstances, by the agency to the protester. Due to GAO's statutory 
requirement to complete bid protests within 100 days, and in the 
interest of fairness, there may be circumstances in which documents 
held by a party that are not in the possession of the agency are 
necessary for the swift resolution of a bid protest. To permit parties 
to make document requests of another party, GAO proposes to revise 
paragraph (d) of 4 CFR 21.3, to state that, in appropriate 
circumstances, one party may request that another party produce 
documents that are not in the agency's possession and not currently in 
the record. GAO does not expect these requests to arise often, and 
retains the discretion to determine the appropriateness of granting 
such requests.

Additional Statements

    To reflect GAO practice, GAO proposes to revise paragraph (j) of 4 
CFR 21.3 to clarify that parties must seek GAO's prior approval before 
submitting additional statements and that GAO reserves the right to 
disregard statements that are submitted without prior approval.

Electronic Transmissions

    The current admonition in paragraph (b) of 4 CFR 21.4 against the 
electronic transmission of documents in bid protests subject to a 
protective order is inconsistent with GAO's protective order admission 
notice, which permits the electronic transmission of documents unless a 
party has objected. To reconcile GAO's Bid Protest Regulations with 
current practice, GAO proposes to delete the last sentence of paragraph 
(b) of 4 CFR 21.4 to remove the admonition against the electronic 
transmission of documents in bid protests subject to a protective 
order.

Sanctions

    In the protest of Network Security Technologies, Inc., B-290741.2, 
November 13, 2002, 2002 CPD ] 193, GAO gave notice that the dismissal 
of a protest was a potential sanction for the violation of a GAO 
protective order. In the protest of PWC Logistics Services Co. KSC(c), 
B-310559, January 11, 2008, 2008 CPD ] 25, GAO employed that sanction 
for the first time, dismissing the protest as the direct result of the 
protester's counsel's violation of the GAO protective order in the 
protest. GAO views its authority to impose dismissal and other 
sanctions as inherent to its authority to issue and administer 
protective orders. To clearly advise that dismissal of a protest is a 
potential sanction for violation of a GAO protective order, GAO 
proposes to revise paragraph (d) of 4 CFR 21.4 to reflect that 
dismissal is among the sanctions that GAO will consider in response to 
violation of a GAO protective order, as is prohibition from 
participation in the remainder of a protest as an intervenor, which is 
another sanction GAO has used in the

[[Page 15100]]

past to address a protective order violation.

Small Business Administration

    Standard industrial classification codes have been replaced by the 
North American Industry Classification System standards. For 
administrative purposes, GAO proposes to revise paragraph (b) of 4 CFR 
21.5 to replace the term ``standard industrial classification'' with 
the term ``North American Industry Classification System.''

Statutory Stays

     31 U.S.C. 3553(c) and (d) address agencies' requirements to 
withhold contract award or suspend contract performance when a protest 
is filed at GAO. Although a protest to GAO is the triggering event 
under these statutory authorities, the authorities provide no role for 
GAO in this process. GAO proposes to revise 4 CFR 21.6, to clarify that 
GAO has no role in administering the statutory requirements to withhold 
contract award or suspend contract performance.

Notification to Agency

    GAO is required under 31 U.S.C. 3554(d) to provide notice to the 
parties in a protest. GAO proposes to simplify the list of agency 
contacts in paragraph (a) of 4 CFR 21.12 to reflect GAO's current 
practice in meeting its statutory obligations.

Reconsideration

    Certain grounds for requesting reconsideration of a protest 
decision, such as the repetition of arguments previously made, do not 
merit reconsideration by GAO. Requests for reconsideration are required 
to be filed within 10 days of the issuance of a protest decision. GAO 
can see no reason to reconsider arguments so recently considered here, 
and will therefore dismiss requests for reconsideration based on such 
arguments without development or further consideration. To clarify the 
requirements of a request for reconsideration and to emphasize that 
repetitive arguments will be summarily dismissed, GAO proposes to 
revise paragraph (c) of 4 CFR 21.14, to state that a request for 
reconsideration must show that the prior decision contains errors of 
fact or law, or must present information not previously considered that 
warrants reversal or modification of the prior decision, and to state 
that GAO will not consider requests based on the repetition of 
arguments previously raised.
    Additionally, GAO proposes to delete language in paragraph (c) of 4 
CFR 21.14 regarding agencies' obligation to withhold award and suspend 
performance in the event of a request for reconsideration because, as 
discussed above, GAO has no role in this process. By deleting this 
provision, however, GAO does not express any view regarding agencies' 
obligations under 31 U.S.C. 3553(c) and (d).

List of Subjects in 4 CFR Part 21

    Administrative practice and procedure, Appeals, Bid protest 
regulations, Government contracts.

    For the reasons set out in the preamble, Title 4, Chapter I, 
Subchapter B, Part 21 of the Code of Federal Regulations is proposed to 
be amended as follows:

PART 21--BID PROTEST REGULATIONS

    1. The authority citation for part 21 continues to read as follows:

    Authority: 31 U.S.C. 3551-3556.

    2. In part 21, remove the words ``a contracting agency'' and ``the 
contracting agency'' wherever they appear and add in their place the 
words ``an agency'' or ``the agency,'' respectively.
    3. Amend Sec.  21.0 by revising paragraphs (a)(2), (b)(2), and (c); 
removing paragraph (d); and redesignating paragraph (e) as paragraph 
(d), redesignating paragraph (f) as paragraph (e), redesignating 
paragraph (g) as paragraph (f) and revising it, and redesignating 
paragraph (h) as paragraph (g).
    The revisions read as follows:


Sec.  21.0  Definitions.

    (a)(1) * * *
    (2) In a public-private competition conducted under Office of 
Management and Budget Circular A-76 regarding performance of an 
activity or function of a Federal agency, or a decision to convert a 
function performed by Federal employees to private sector performance 
without a competition under OMB Circular A-76, interested party also 
means
    (A) the official responsible for submitting the Federal agency 
tender, and
    (B) any one individual, designated as an agent by a majority of the 
employees performing that activity or function, who represents the 
affected employees.
    (b)(1) * * *
    (2) If an interested party files a protest in connection with a 
public-private competition conducted under OMB Circular A-76 regarding 
an activity or function of a Federal agency, the official responsible 
for submitting the Federal agency tender, or the agent representing the 
Federal employees as described in paragraph (a)(2)(B) of this section, 
or both, may also be intervenors.
    (c) Federal agency or agency means any executive department or 
independent establishment in the executive branch, including any wholly 
owned government corporation, and any establishment in the legislative 
or judicial branch, except the Senate, the House of Representatives, 
and the Architect of the Capitol and any activities under his 
direction.
* * * * *
    (f) A document is filed on a particular day when it is received by 
GAO by 5:30 p.m., eastern time, on that day. Protests and other 
documents may be filed by hand delivery, mail, commercial carrier, 
facsimile transmission (202-512-9749), or e-mail (protests@gao.gov). 
Please check GAO's Web site (https://www.gao.gov/legal/bidprotest.html) 
for current filing information. Hand delivery and other means of 
delivery may not be practicable during certain periods due, for 
example, to security concerns or equipment failures. The filing party 
bears the risk that the delivery method chosen will not result in 
timely receipt at GAO.
* * * * *
    4. Amend Sec.  21.1 by revising paragraph (g) to read as follows:


Sec.  21.1  Filing a protest.

* * * * *
    (g) Unless precluded by law, GAO will not withhold material 
submitted by a protester from any party outside the government after 
issuing a decision on the protest, in accordance with GAO's rules at 4 
CFR part 81. If the protester believes that the protest contains 
information which should be withheld, a statement advising of this fact 
must be on the front page of the submission. This information must be 
identified wherever it appears, and the protester must file a redacted 
copy of the protest which omits the information with GAO and the agency 
within 1 day after the filing of its protest with GAO.
* * * * *
    5. Amend Sec.  21.3 by revising paragraphs (c), (d), and (j) to 
read as follows:


Sec.  21.3  Notice of protest, submission of agency report, and time 
for filing of comments on report.

* * * * *
    (c) The contracting agency shall file a report on the protest with 
GAO within 30 days after the telephone notice of the protest from GAO. 
The report provided to the parties need not contain documents which the 
agency has

[[Page 15101]]

previously furnished or otherwise made available to the parties in 
response to the protest. At least 5 days prior to the filing of the 
report, in cases in which the protester has filed a request for 
specific documents, the agency shall respond to the request for 
documents in writing. The agency's response shall, at a minimum, 
identify whether the requested documents exist, which of the requested 
documents or portions thereof the agency intends to produce, which of 
the requested documents or portions thereof the agency intends to 
withhold, and the basis for not producing any of the requested 
documents or portions thereof. Any objection to the scope of the 
agency's proposed disclosure or nondisclosure of documents must be 
filed with GAO and the other parties within 2 days of receipt of this 
list.
    (d) The report shall include the contracting officer's statement of 
the relevant facts, including a best estimate of the contract value, a 
memorandum of law, and a list and a copy of all relevant documents, or 
portions of documents, not previously produced, including, as 
appropriate: the protest; the bid or proposal submitted by the 
protester; the bid or proposal of the firm which is being considered 
for award, or whose bid or proposal is being protested; all evaluation 
documents; the solicitation, including the specifications; the abstract 
of bids or offers; and any other relevant documents. In appropriate 
cases, a party may request that another party produce relevant 
documents, or portions of documents, that are not in the agency's 
possession.
* * * * *
    (j) GAO may request or permit the submission of additional 
statements by the parties and by other parties participating in the 
protest as may be necessary for the fair resolution of the protest. The 
agency and other parties must receive GAO's approval before submitting 
any additional statements. GAO reserves the right to disregard material 
submitted without prior approval.
    6. Amend Sec.  21.4 by revising paragraphs (b) and (d) to read as 
follows:


Sec.  21.4  Protective orders.

* * * * *
    (b) If no protective order has been issued, the agency may withhold 
from the parties those portions of its report that would ordinarily be 
subject to a protective order. GAO will review in camera all 
information not released to the parties.
* * * * *
    (d) Any violation of the terms of a protective order may result in 
the imposition of such sanctions as GAO deems appropriate, including 
referral to appropriate bar associations or other disciplinary bodies, 
restricting the individual's practice before GAO, prohibition from 
participation in the remainder of the protest, or dismissal of the 
protest.
    7. Amend Sec.  21.5 by revising paragraph (b)(1) to read as 
follows:


Sec.  21.5  Protest issues not for consideration.

* * * * *
    (b) Small Business Administration issues. (1) Small business size 
standards and North American Industry Classification System (NAICS) 
standards. Challenges of established size standards or the size status 
of particular firms, and challenges of the selected NAICS code may be 
reviewed solely by the Small Business Administration. 15 U.S.C. 
637(b)(6).
* * * * *
    8. Revise Sec.  21.6 to read as follows:


Sec.  21.6  Withholding of award and suspension of contract 
performance.

    Where a protest is filed with GAO, the contracting agency may be 
required to withhold award and to suspend contract performance. The 
requirements for the withholding of award and the suspension of 
contract performance are set forth in 31 U.S.C. 3553(c) and (d); GAO 
does not administer the requirements to stay award or suspend contract 
performance under CICA at 31 U.S.C. 3553(c) and (d).
    9. Amend Sec.  21.12 by revising paragraph (a) to read as follows:


Sec.  21.12  Distribution of decisions.

    (a) Unless it contains protected information, a copy of a decision 
shall be provided to the protester, any intervenors, and the agency 
involved; a copy shall also be made available to the public. A copy of 
a decision containing protected information shall be provided only to 
the agency and to individuals admitted to any protective order issued 
in the protest. A public version omitting the protected information 
shall be prepared wherever possible.
* * * * *
    10. Amend Sec.  21.14 by revising paragraph (c) to read as follows:


Sec.  21.14  Request for reconsideration.

* * * * *
    (c) GAO will summarily dismiss any request for reconsideration that 
fails to state a valid basis for reconsideration or is untimely. To 
obtain reconsideration, the requesting party must show that our prior 
decision contains errors of either fact or law, or must present 
information not previously considered that warrants reversal or 
modification of our decision; GAO will not consider a request for 
reconsideration based on repetition of arguments previously raised.

Gary L. Kepplinger,
General Counsel, United States Government Accountability Office.
 [FR Doc. E8-5621 Filed 3-20-08; 8:45 am]
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