Government Accountability Office, Administrative Practice and Procedure, Bid Protest Regulations, Government Contracts, 32427-32430 [E8-12790]

Download as PDF 32427 Rules and Regulations Federal Register Vol. 73, No. 111 Monday, June 9, 2008 This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. Prices of new books are listed in the first FEDERAL REGISTER issue of each week. GOVERNMENT ACCOUNTABILITY OFFICE 4 CFR Part 21 Government Accountability Office, Administrative Practice and Procedure, Bid Protest Regulations, Government Contracts AGENCY: Government Accountability Office. ACTION: Final rule. jlentini on PROD1PC65 with RULES SUMMARY: This document amends Government Accountability Office (GAO) Bid Protest Regulations, which have been promulgated in accordance with the Competition in Contracting Act of 1984. These amendments are being made to implement changes to the definition of an ‘‘interested party’’ for the GAO Bid Protest forum set forth in sec. 326 of the National Defense Authorization Act for Fiscal Year 2008, and to make certain administrative changes. DATES: Effective Date: June 9, 2008. 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: Effective Dates GAO’s statutory jurisdiction to hear bid protests filed by interested parties was recently amended by section 568 of the Department of Homeland Security Appropriations Act, 2008 (enacted as Division E of the Consolidated Appropriations Act, 2008, Pub. L. 110– 161, 121 Stat. 1844, on December 26, 2007), and by sections 326 and 843 of the National Defense Authorization Act for Fiscal Year 2008, Public Law 110– 181, 122 Stat. 3, 62, 236. Section 568 of the Department of Homeland Security Appropriations Act, VerDate Aug<31>2005 16:11 Jun 06, 2008 Jkt 214001 2008, made the Transportation Security Administration (TSA) subject to the Federal Acquisition Regulation. Therefore, as of the June 23, 2008, effective date, GAO will begin to hear protests of TSA procurements covered by TSA solicitations issued on or after the effective date. Section 326 of the National Defense Authorization Act for Fiscal Year 2008 expanded the protest rights of Federal employees in a competition conducted under Office of Management and Budget (OMB) Circular A–76 or noncompetitive decision to convert a function performed by Federal employees to private sector performance. Section 326 specifies that GAO has jurisdiction to hear protests concerning studies initiated after January 1, 2004, for actions taken after the date of enactment, which was January 28, 2008. Section 843 of the National Defense Authorization Act for Fiscal Year 2008 amended GAO’s statutory jurisdiction under 10 U.S.C. 2304c(e) and 41 U.S.C. 253j(e) to authorize GAO to hear protests of the issuance or proposed issuance of certain task and delivery orders under certain indefinite-delivery/ indefinite-quantity contracts. Section 843 specifies that GAO has jurisdiction to hear protests concerning the issuance or proposed issuance of task and delivery orders 120 days after enactment, which is May 27, 2008. Background On March 21, 2008, GAO published a proposed rule (73 FR 15098) to amend its Bid Protest Regulations. The supplementary information included with the proposed rule explained that the proposed revisions to GAO’s Bid Protest Regulations were promulgated in accordance with the Competition in Contracting Act of 1984 (CICA), 31 U.S.C. 3551–3556, in response to statutory changes in GAO’s bid protest jurisdiction contained in section 568 of the Department of Homeland Security Appropriations Act, 2008, and sections 326 and 843 of the National Defense Authorization Act for Fiscal Year 2008. The proposed rule also explained that after careful consideration, GAO had concluded that no changes in GAO’s Bid Protest Regulations were necessary in order to effectuate the provisions of section 568 of the Department of Homeland Security Appropriations Act, 2008, or section 843 of the National Defense Authorization Act for Fiscal PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 Year 2008. The proposed rule therefore set forth the proposed revisions to GAO’s Bid Protest Regulations to implement section 326 of the National Defense Authorization Act for Fiscal Year 2008 and to make certain administrative changes. GAO invited interested persons to participate in this rulemaking by submitting written comments regarding the proposed revisions. These comments were required to be submitted on or before April 21, 2008. Summary of Comments GAO received written comments from two Federal agencies, two Federal employee labor unions, the American Bar Association, and two individuals. In adopting this final rule, GAO has carefully considered all comments received. With respect to the changes in GAO’s rules to implement the recently enacted statutes, one of the agencies, the American Bar Association, and both Federal employee labor unions explicitly agreed that the proposed regulations correctly implemented the statutory language. On the other hand, both of the employee unions suggested additional changes to GAO’s rules to fully implement what they contend is the intent of the statutory changes. With respect to the changes in GAO’s rules made for administrative purposes, the American Bar Association endorsed the proposed changes. A summary of the more significant specific comments concerning GAO’s proposed rule, and GAO’s responses to these comments, are set forth below. Interested Party The recent changes to the statutory definition of an ‘‘interested party’’ anticipate that Federal employees may be represented by either of two entities: (1) The official who submitted the agency tender in a public-private competition; or (2) any one person or individual who, for the purpose of representing the employees of a Federal agency in a protest, has been designated their agent by a majority of the employees who are engaged in performing such activity. One individual commentator noted that the proposed revision to the definition of an ‘‘interested party’’ uses the term ‘‘individual’’ rather than the term ‘‘person’’ to describe the representative other than the agency E:\FR\FM\09JNR1.SGM 09JNR1 jlentini on PROD1PC65 with RULES 32428 Federal Register / Vol. 73, No. 111 / Monday, June 9, 2008 / Rules and Regulations tender official (ATO) who can file a protest on behalf of affected employees, and raised concerns about the term ‘‘individual.’’ Congress initially changed the statutory definition of ‘‘interested party’’ in section 739(c) of the Financial Services and General Government Appropriations Act, 2008 (enacted as Division D of the Consolidated Appropriation Act, 2008), using the term ‘‘person’’ to describe the representative of the majority of affected Federal employees. One month later, in the National Defense Authorization Act for Fiscal Year 2008, Congress again amended the same provision, this time using the term ‘‘individual.’’ GAO has used the language of the later-enacted statute for its rules. For GAO, the use of the term ‘‘individual’’ as opposed to ‘‘person’’ is not intended to signal any substantive difference between the terms. One of the agency commentators expressed concern that the interested party definition could allow affected employees to protest the selection of a ‘‘most efficient organization’’ (MEO) under a public-private competition conducted pursuant to OMB Circular A– 76. GAO’s proposed interested party definition, which closely tracks the statutory enactment, does not address (just as the statute does not address) whether affected employees are authorized to protest the selection of an MEO. In the event GAO is presented with this issue, GAO will consider it at that time. While the two Federal employee unions expressly recognize that GAO’s proposed rules were faithfully implementing the statutory amendments to the definition of an interested party, both expressed concern regarding several areas where they contend more guidance should be provided. These concerns, in the aggregate, were that the definition of an interested party should be supplemented to: (1) Provide guidance regarding the designation of an employee representative (this concern was also raised by one of the individual commentators), (2) address whether a government employee must lose or be at risk of losing his or her job in order to have standing to protest, and (3) authorize a protest without regard to the number of employees involved. Additionally, one Federal employee union argued that affected employees should be eligible to receive access to information covered by a protective order. With respect to the designation of an employee representative, GAO plans to resolve these issues on a case-by-case basis. However, GAO’s practice is to generally accept a party’s representation VerDate Aug<31>2005 16:11 Jun 06, 2008 Jkt 214001 that it is an interested party, unless facts are brought to GAO’s attention that challenge the representation. With respect to whether a government employee must lose his or her job in order to have standing to protest, GAO has addressed this issue in a recent decision in which GAO concluded that Federal employees’ jobs ‘‘must be at stake in order for their designated agent to qualify as an interested party to challenge an agency’s conversion of a function to performance by the private sector.’’ Mark Whetstone—Designated Employee Agent, B–311284, May 9, 2008, 2008 CPD ¶l at 5–6. Because GAO has addressed this issue in a published decision, GAO does not believe that a change to the proposed rule is needed. With respect to whether a protest is authorized without regard to the number of affected employees, GAO has addressed this issue in a recent decision as well. As GAO explained in Lisa Hartman—Designated Employee Agent, B–311247, May 6, 2008, 2008 CPD ¶l, there is no requirement under OMB Circular A–76 for an agency to use the procurement process to conduct a ‘‘streamlined competition,’’ when a commercial activity is performed by 65 or fewer full-time equivalent (FTE) employees. Moreover, there is no statutory requirement to conduct a public-private competition, using the procurement process, if fewer than 10 FTEs are involved. Id.; see also National Defense Authorization Act for Fiscal Year 2008, Public Law 110–181, Sec. 327, 122 Stat. 3, 63. Because GAO has addressed this issue in a decision, GAO does not believe that a change to the proposed rule is needed. Finally, with respect to whether affected employees should be eligible to receive access to information covered by a protective order, GAO notes that this issue was raised by several commentators in connection with the revision of GAO’s rules in 2005. 70 FR 19679, 19680, Apr. 14, 2005. As explained then, GAO thought it was premature to provide definitive guidance regarding providing access to protected information by the ATO, the employee representative, and/or their attorneys. Since that time, GAO has not had an opportunity to address this matter further in protest decisions. Nonetheless, GAO thinks that several points of guidance offered then are still applicable. GAO believes that where counsel for the ATO or for the employee representative is not a government employee, that attorney will be required to apply for admission under existing standards established for admission to a protective order. As for the ATO and the PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 employee representative, those individuals would presumably not be provided access to protected information under the protective order, just as non-attorneys in other protests cannot obtain such access. In cases where counsel for the ATO, or for the employee representative, is a government employee, GAO will proceed on a case-by-case basis, with appropriate weight given to the agency’s views and, in particular, to the access that the agency has given the attorney to proprietary or source selection sensitive documents before the protest was filed. As the practice develops, and experience is gained by all sides, GAO intends to develop uniform procedures that can be incorporated into the bid protest process and, if warranted, into GAO’s Bid Protest Regulations. Contracting Agency In the proposed rules, GAO explained it was deleting the definition of ‘‘contracting agency’’ at paragraph (d) of 4 CFR 21.0, and replacing the term ‘‘contracting agency’’ with ‘‘agency’’ throughout 4 CFR 21. One of the individual commentators brought to GAO’s attention that the proposed rule failed to implement this change at paragraph (c) of 4 CFR 21.3. GAO is correcting this omission in the final rule. Additional Statements In the proposed rules, GAO explains that, consistent with current practice, GAO proposed 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. One of the individual commentators suggested that GAO amend the proposed rule to state that GAO will automatically reject additional filings that are submitted without prior approval. Although the amendment of the rule reflects the need for parties to seek prior approval before submission of additional statements, GAO does not believe that it would be appropriate, in every case, to automatically reject additional statements submitted without prior approval. As a result, GAO is not changing the proposed rule in this respect. The same commentator also requested that GAO amend the proposed rule to state that when a party is allowed to submit an additional statement, the other parties shall have a minimum of 24 hours to respond, where practicable. As a general rule, consistent with GAO’s statutory obligation to issue decisions E:\FR\FM\09JNR1.SGM 09JNR1 Federal Register / Vol. 73, No. 111 / Monday, June 9, 2008 / Rules and Regulations within 100 calendar days, GAO allows parties to respond to additional statements. GAO is not prepared, however, to amend the rules to reduce its flexibility in this area. One of the Federal employee union commentators requested that GAO amend this proposed rule to allow parties who request permission to submit additional statements to submit the statement along with the request. GAO does not believe that this proposed change is warranted, as it would effectively defeat the stated purpose of the rule of requiring parties to first obtain permission to submit additional statements. jlentini on PROD1PC65 with RULES Reimbursement of Costs One of the individual commentators requested that GAO amend its rule at 4 CFR 21.8 to state that GAO will recommend reimbursement of costs and attorneys’ fees only in ‘‘appropriate circumstances,’’ so as to provide GAO with the discretion to avoid recommending that an agency reimburse the costs and fees of agency employees or counsel. The commentator recognizes that this concern would not exist in situations where affected employees retain outside representation. GAO does not think that changes to this rule are needed to conclude that awarding costs to government employee protesters may not be appropriate, because the rule already states that GAO ‘‘may’’ recommend reimbursement of protest costs, including attorneys’ fees. The same commentator also suggested that GAO clarify paragraph (e) of 4 CFR 21.8 to expressly state that GAO will not recommend reimbursement of protest costs where an agency takes prompt corrective action, i.e., the agency takes corrective action before the agency report is produced. GAO thinks this issue has been adequately addressed in prior decisions. E.g., Alaska Structures, Inc.-Costs, B–298156.2, July 17, 2006, 2006 CPD ¶ 109 at 4. GAO recognizes that the commentator is accurately stating the general rule applicable to recommendations for the reimbursement of protest costs. On the other hand, GAO does not rule out the possibility that unique and rarely encountered circumstances could warrant the recommendation of the reimbursement of costs when an agency takes corrective action prior to the due date for the agency report and would like to retain its discretion in this regard. See Louisiana Clearwater, Inc.— Reconsideration & Costs, B–283081.4, B–283081.5, Apr. 14, 2000, 2000 CPD ¶ 209 at 6. VerDate Aug<31>2005 16:11 Jun 06, 2008 Jkt 214001 Statutory Stays In the notice of proposed rulemaking, GAO stated that it would revise 4 CFR 21.6 and 21.14 to clarify that GAO has no role in administering the statutory requirements to withhold contract award or suspend contract performance. One of the Federal employee unions expressed concern with GAO’s proposed clarification because of what the commentator perceived as GAO’s ability to direct agencies to suspend contract performance. The commentator argued that this ability could provide a valuable mechanism to enforce the rights of affected employees. GAO proposed this change to more accurately reflect its role in questions involving the statutory stay provisions of CICA. GAO views this clarification as appropriate for all of the protests over which GAO has jurisdiction: this clarification has no greater or lesser application to protests involving publicprivate competitions. As a result, GAO plans to implement the proposed changes to 4 CFR 21.6 and 4 CFR 21.14 as explained in the notice of proposed rulemaking. TSA Jurisdiction In the notice of proposed rulemaking, GAO noted that as of June 23, 2008, procurements conducted by the TSA will be subject to the Federal Acquisition Regulation (FAR), such that GAO will gain jurisdiction over TSA procurements. The Department of Homeland Security (DHS) has issued a final rule stating that TSA ‘‘acquisitions initiated after June 22, 2008’’ will be subject to the FAR. 73 FR 30317, May 27, 2008. In addition, TSA has requested that GAO clarify that its jurisdiction will apply to procurements covered by solicitations issued on or after June 23. In light of the revised DHS regulations pertaining to the applicability of the FAR to TSA procurements, and in the interest of an orderly transition by TSA to FAR-based procurements, GAO will hear protests of TSA procurements covered by TSA solicitations issued on or after June 23. List of Subjects in 4 CFR Part 21 Administrative practice and procedure, Appeals, Bid protest regulations, Government contracts. I For the reasons set out in the preamble, Title 4, Chapter I, Subchapter B, Part 21 of the Code of Federal Regulations is amended as follows: PART 21—BID PROTEST REGULATIONS 1. The authority citation for part 21 continues to read as follows: I PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 32429 Authority: 31 U.S.C. 3551–3556. 2. 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. I 3. Amend § 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: I § 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 E:\FR\FM\09JNR1.SGM 09JNR1 32430 Federal Register / Vol. 73, No. 111 / Monday, June 9, 2008 / Rules and Regulations 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. * * * * * I 4. Amend § 21.1 by revising paragraph (g) to read as follows: § 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. * * * * * I 5. Amend § 21.3 by revising paragraphs (c), (d), and (j) to read as follows: § 21.3 Notice of protest, submission of agency report, and time for filing of comments on report. jlentini on PROD1PC65 with RULES * 16:11 Jun 06, 2008 Jkt 214001 6. Amend § 21.4 by revising paragraphs (b) and (d) to read as follows: I § 21.4 Protective orders. * * * * * (c) The 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 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 VerDate Aug<31>2005 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. * * * * (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 § 21.5 by revising paragraph (b)(1) to read as follows: I § 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 PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 the Small Business Administration. 15 U.S.C. 637(b)(6). * * * * * I 8. Revise § 21.6 to read as follows: § 21.6 Withholding of award and suspension of contract performance. Where a protest is filed with GAO, the 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 § 21.12 by revising paragraph (a) to read as follows: I § 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 also shall 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 § 21.14 by revising paragraph (c) to read as follows: I § 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. E8–12790 Filed 6–6–08; 8:45 am] BILLING CODE 1610–02–P E:\FR\FM\09JNR1.SGM 09JNR1

Agencies

[Federal Register Volume 73, Number 111 (Monday, June 9, 2008)]
[Rules and Regulations]
[Pages 32427-32430]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-12790]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
week.

========================================================================


Federal Register / Vol. 73, No. 111 / Monday, June 9, 2008 / Rules 
and Regulations

[[Page 32427]]



GOVERNMENT ACCOUNTABILITY OFFICE

4 CFR Part 21


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

AGENCY: Government Accountability Office.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This document amends Government Accountability Office (GAO) 
Bid Protest Regulations, which have been promulgated in accordance with 
the Competition in Contracting Act of 1984. These amendments are being 
made to implement changes to the definition of an ``interested party'' 
for the GAO Bid Protest forum set forth in sec. 326 of the National 
Defense Authorization Act for Fiscal Year 2008, and to make certain 
administrative changes.

DATES: Effective Date: June 9, 2008.

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: 

Effective Dates

    GAO's statutory jurisdiction to hear bid protests filed by 
interested parties was recently amended by section 568 of the 
Department of Homeland Security Appropriations Act, 2008 (enacted as 
Division E of the Consolidated Appropriations Act, 2008, Pub. L. 110-
161, 121 Stat. 1844, on December 26, 2007), and by sections 326 and 843 
of the National Defense Authorization Act for Fiscal Year 2008, Public 
Law 110-181, 122 Stat. 3, 62, 236.
    Section 568 of the Department of Homeland Security Appropriations 
Act, 2008, made the Transportation Security Administration (TSA) 
subject to the Federal Acquisition Regulation. Therefore, as of the 
June 23, 2008, effective date, GAO will begin to hear protests of TSA 
procurements covered by TSA solicitations issued on or after the 
effective date.
    Section 326 of the National Defense Authorization Act for Fiscal 
Year 2008 expanded the protest rights of Federal employees in a 
competition conducted under Office of Management and Budget (OMB) 
Circular A-76 or noncompetitive decision to convert a function 
performed by Federal employees to private sector performance. Section 
326 specifies that GAO has jurisdiction to hear protests concerning 
studies initiated after January 1, 2004, for actions taken after the 
date of enactment, which was January 28, 2008.
    Section 843 of the National Defense Authorization Act for Fiscal 
Year 2008 amended GAO's statutory jurisdiction under 10 U.S.C. 2304c(e) 
and 41 U.S.C. 253j(e) to authorize GAO to hear protests of the issuance 
or proposed issuance of certain task and delivery orders under certain 
indefinite-delivery/indefinite-quantity contracts. Section 843 
specifies that GAO has jurisdiction to hear protests concerning the 
issuance or proposed issuance of task and delivery orders 120 days 
after enactment, which is May 27, 2008.

Background

    On March 21, 2008, GAO published a proposed rule (73 FR 15098) to 
amend its Bid Protest Regulations. The supplementary information 
included with the proposed rule explained that the proposed revisions 
to GAO's Bid Protest Regulations were promulgated in accordance with 
the Competition in Contracting Act of 1984 (CICA), 31 U.S.C. 3551-3556, 
in response to statutory changes in GAO's bid protest jurisdiction 
contained in section 568 of the Department of Homeland Security 
Appropriations Act, 2008, and sections 326 and 843 of the National 
Defense Authorization Act for Fiscal Year 2008.
    The proposed rule also explained that after careful consideration, 
GAO had concluded that no changes in GAO's Bid Protest Regulations were 
necessary in order to effectuate the provisions of section 568 of the 
Department of Homeland Security Appropriations Act, 2008, or section 
843 of the National Defense Authorization Act for Fiscal Year 2008. The 
proposed rule therefore set forth the proposed revisions to GAO's Bid 
Protest Regulations to implement section 326 of the National Defense 
Authorization Act for Fiscal Year 2008 and to make certain 
administrative changes.
    GAO invited interested persons to participate in this rulemaking by 
submitting written comments regarding the proposed revisions. These 
comments were required to be submitted on or before April 21, 2008.

Summary of Comments

    GAO received written comments from two Federal agencies, two 
Federal employee labor unions, the American Bar Association, and two 
individuals. In adopting this final rule, GAO has carefully considered 
all comments received.
    With respect to the changes in GAO's rules to implement the 
recently enacted statutes, one of the agencies, the American Bar 
Association, and both Federal employee labor unions explicitly agreed 
that the proposed regulations correctly implemented the statutory 
language. On the other hand, both of the employee unions suggested 
additional changes to GAO's rules to fully implement what they contend 
is the intent of the statutory changes. With respect to the changes in 
GAO's rules made for administrative purposes, the American Bar 
Association endorsed the proposed changes. A summary of the more 
significant specific comments concerning GAO's proposed rule, and GAO's 
responses to these comments, are set forth below.

Interested Party

    The recent changes to the statutory definition of an ``interested 
party'' anticipate that Federal employees may be represented by either 
of two entities: (1) The official who submitted the agency tender in a 
public-private competition; or (2) any one person or individual who, 
for the purpose of representing the employees of a Federal agency in a 
protest, has been designated their agent by a majority of the employees 
who are engaged in performing such activity.
    One individual commentator noted that the proposed revision to the 
definition of an ``interested party'' uses the term ``individual'' 
rather than the term ``person'' to describe the representative other 
than the agency

[[Page 32428]]

tender official (ATO) who can file a protest on behalf of affected 
employees, and raised concerns about the term ``individual.'' Congress 
initially changed the statutory definition of ``interested party'' in 
section 739(c) of the Financial Services and General Government 
Appropriations Act, 2008 (enacted as Division D of the Consolidated 
Appropriation Act, 2008), using the term ``person'' to describe the 
representative of the majority of affected Federal employees. One month 
later, in the National Defense Authorization Act for Fiscal Year 2008, 
Congress again amended the same provision, this time using the term 
``individual.'' GAO has used the language of the later-enacted statute 
for its rules. For GAO, the use of the term ``individual'' as opposed 
to ``person'' is not intended to signal any substantive difference 
between the terms.
    One of the agency commentators expressed concern that the 
interested party definition could allow affected employees to protest 
the selection of a ``most efficient organization'' (MEO) under a 
public-private competition conducted pursuant to OMB Circular A-76. 
GAO's proposed interested party definition, which closely tracks the 
statutory enactment, does not address (just as the statute does not 
address) whether affected employees are authorized to protest the 
selection of an MEO. In the event GAO is presented with this issue, GAO 
will consider it at that time.
    While the two Federal employee unions expressly recognize that 
GAO's proposed rules were faithfully implementing the statutory 
amendments to the definition of an interested party, both expressed 
concern regarding several areas where they contend more guidance should 
be provided. These concerns, in the aggregate, were that the definition 
of an interested party should be supplemented to: (1) Provide guidance 
regarding the designation of an employee representative (this concern 
was also raised by one of the individual commentators), (2) address 
whether a government employee must lose or be at risk of losing his or 
her job in order to have standing to protest, and (3) authorize a 
protest without regard to the number of employees involved. 
Additionally, one Federal employee union argued that affected employees 
should be eligible to receive access to information covered by a 
protective order.
    With respect to the designation of an employee representative, GAO 
plans to resolve these issues on a case-by-case basis. However, GAO's 
practice is to generally accept a party's representation that it is an 
interested party, unless facts are brought to GAO's attention that 
challenge the representation.
    With respect to whether a government employee must lose his or her 
job in order to have standing to protest, GAO has addressed this issue 
in a recent decision in which GAO concluded that Federal employees' 
jobs ``must be at stake in order for their designated agent to qualify 
as an interested party to challenge an agency's conversion of a 
function to performance by the private sector.'' Mark Whetstone--
Designated Employee Agent, B-311284, May 9, 2008, 2008 CPD ]-- at 5-6. 
Because GAO has addressed this issue in a published decision, GAO does 
not believe that a change to the proposed rule is needed.
    With respect to whether a protest is authorized without regard to 
the number of affected employees, GAO has addressed this issue in a 
recent decision as well. As GAO explained in Lisa Hartman--Designated 
Employee Agent, B-311247, May 6, 2008, 2008 CPD ]--, there is no 
requirement under OMB Circular A-76 for an agency to use the 
procurement process to conduct a ``streamlined competition,'' when a 
commercial activity is performed by 65 or fewer full-time equivalent 
(FTE) employees. Moreover, there is no statutory requirement to conduct 
a public-private competition, using the procurement process, if fewer 
than 10 FTEs are involved. Id.; see also National Defense Authorization 
Act for Fiscal Year 2008, Public Law 110-181, Sec. 327, 122 Stat. 3, 
63. Because GAO has addressed this issue in a decision, GAO does not 
believe that a change to the proposed rule is needed.
    Finally, with respect to whether affected employees should be 
eligible to receive access to information covered by a protective 
order, GAO notes that this issue was raised by several commentators in 
connection with the revision of GAO's rules in 2005. 70 FR 19679, 
19680, Apr. 14, 2005. As explained then, GAO thought it was premature 
to provide definitive guidance regarding providing access to protected 
information by the ATO, the employee representative, and/or their 
attorneys. Since that time, GAO has not had an opportunity to address 
this matter further in protest decisions.
    Nonetheless, GAO thinks that several points of guidance offered 
then are still applicable. GAO believes that where counsel for the ATO 
or for the employee representative is not a government employee, that 
attorney will be required to apply for admission under existing 
standards established for admission to a protective order. As for the 
ATO and the employee representative, those individuals would presumably 
not be provided access to protected information under the protective 
order, just as non-attorneys in other protests cannot obtain such 
access. In cases where counsel for the ATO, or for the employee 
representative, is a government employee, GAO will proceed on a case-
by-case basis, with appropriate weight given to the agency's views and, 
in particular, to the access that the agency has given the attorney to 
proprietary or source selection sensitive documents before the protest 
was filed. As the practice develops, and experience is gained by all 
sides, GAO intends to develop uniform procedures that can be 
incorporated into the bid protest process and, if warranted, into GAO's 
Bid Protest Regulations.

Contracting Agency

    In the proposed rules, GAO explained it was deleting the definition 
of ``contracting agency'' at paragraph (d) of 4 CFR 21.0, and replacing 
the term ``contracting agency'' with ``agency'' throughout 4 CFR 21. 
One of the individual commentators brought to GAO's attention that the 
proposed rule failed to implement this change at paragraph (c) of 4 CFR 
21.3. GAO is correcting this omission in the final rule.

Additional Statements

    In the proposed rules, GAO explains that, consistent with current 
practice, GAO proposed 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. One of the 
individual commentators suggested that GAO amend the proposed rule to 
state that GAO will automatically reject additional filings that are 
submitted without prior approval. Although the amendment of the rule 
reflects the need for parties to seek prior approval before submission 
of additional statements, GAO does not believe that it would be 
appropriate, in every case, to automatically reject additional 
statements submitted without prior approval. As a result, GAO is not 
changing the proposed rule in this respect.
    The same commentator also requested that GAO amend the proposed 
rule to state that when a party is allowed to submit an additional 
statement, the other parties shall have a minimum of 24 hours to 
respond, where practicable. As a general rule, consistent with GAO's 
statutory obligation to issue decisions

[[Page 32429]]

within 100 calendar days, GAO allows parties to respond to additional 
statements. GAO is not prepared, however, to amend the rules to reduce 
its flexibility in this area.
    One of the Federal employee union commentators requested that GAO 
amend this proposed rule to allow parties who request permission to 
submit additional statements to submit the statement along with the 
request. GAO does not believe that this proposed change is warranted, 
as it would effectively defeat the stated purpose of the rule of 
requiring parties to first obtain permission to submit additional 
statements.

Reimbursement of Costs

    One of the individual commentators requested that GAO amend its 
rule at 4 CFR 21.8 to state that GAO will recommend reimbursement of 
costs and attorneys' fees only in ``appropriate circumstances,'' so as 
to provide GAO with the discretion to avoid recommending that an agency 
reimburse the costs and fees of agency employees or counsel. The 
commentator recognizes that this concern would not exist in situations 
where affected employees retain outside representation. GAO does not 
think that changes to this rule are needed to conclude that awarding 
costs to government employee protesters may not be appropriate, because 
the rule already states that GAO ``may'' recommend reimbursement of 
protest costs, including attorneys' fees.
    The same commentator also suggested that GAO clarify paragraph (e) 
of 4 CFR 21.8 to expressly state that GAO will not recommend 
reimbursement of protest costs where an agency takes prompt corrective 
action, i.e., the agency takes corrective action before the agency 
report is produced. GAO thinks this issue has been adequately addressed 
in prior decisions. E.g., Alaska Structures, Inc.-Costs, B-298156.2, 
July 17, 2006, 2006 CPD ] 109 at 4. GAO recognizes that the commentator 
is accurately stating the general rule applicable to recommendations 
for the reimbursement of protest costs. On the other hand, GAO does not 
rule out the possibility that unique and rarely encountered 
circumstances could warrant the recommendation of the reimbursement of 
costs when an agency takes corrective action prior to the due date for 
the agency report and would like to retain its discretion in this 
regard. See Louisiana Clearwater, Inc.--Reconsideration & Costs, B-
283081.4, B-283081.5, Apr. 14, 2000, 2000 CPD ] 209 at 6.

Statutory Stays

    In the notice of proposed rulemaking, GAO stated that it would 
revise 4 CFR 21.6 and 21.14 to clarify that GAO has no role in 
administering the statutory requirements to withhold contract award or 
suspend contract performance. One of the Federal employee unions 
expressed concern with GAO's proposed clarification because of what the 
commentator perceived as GAO's ability to direct agencies to suspend 
contract performance. The commentator argued that this ability could 
provide a valuable mechanism to enforce the rights of affected 
employees.
    GAO proposed this change to more accurately reflect its role in 
questions involving the statutory stay provisions of CICA. GAO views 
this clarification as appropriate for all of the protests over which 
GAO has jurisdiction: this clarification has no greater or lesser 
application to protests involving public-private competitions. As a 
result, GAO plans to implement the proposed changes to 4 CFR 21.6 and 4 
CFR 21.14 as explained in the notice of proposed rulemaking.

TSA Jurisdiction

    In the notice of proposed rulemaking, GAO noted that as of June 23, 
2008, procurements conducted by the TSA will be subject to the Federal 
Acquisition Regulation (FAR), such that GAO will gain jurisdiction over 
TSA procurements. The Department of Homeland Security (DHS) has issued 
a final rule stating that TSA ``acquisitions initiated after June 22, 
2008'' will be subject to the FAR. 73 FR 30317, May 27, 2008. In 
addition, TSA has requested that GAO clarify that its jurisdiction will 
apply to procurements covered by solicitations issued on or after June 
23. In light of the revised DHS regulations pertaining to the 
applicability of the FAR to TSA procurements, and in the interest of an 
orderly transition by TSA to FAR-based procurements, GAO will hear 
protests of TSA procurements covered by TSA solicitations issued on or 
after June 23.

List of Subjects in 4 CFR Part 21

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

0
For the reasons set out in the preamble, Title 4, Chapter I, Subchapter 
B, Part 21 of the Code of Federal Regulations is amended as follows:

PART 21--BID PROTEST REGULATIONS

0
1. The authority citation for part 21 continues to read as follows:

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

0
2. 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.

0
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

[[Page 32430]]

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.
* * * * *

0
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.
* * * * *

0
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 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 
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.

0
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.

0
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).
* * * * *

0
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 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).

0
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 also shall 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.
* * * * *

0
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. E8-12790 Filed 6-6-08; 8:45 am]
BILLING CODE 1610-02-P
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