United States: 2019 NDAA Analysis: Bid Protest Changes Affecting Government Contracts

Amy L. Fuentes and Elizabeth N Jochum are Associates in Holland & Knight's Tysons office

This is the second blog post in a series analyzing the 2019 National Defense Authorization Act (NDAA) as signed into law on Aug. 13, 2018. Stay tuned for more blog posts covering additional topics in the near future from Holland & Knight's Government Contracts Team.

The 2019 NDAA contains important changes that impact many aspects of government contracts. In this post, we discuss Section 822, which has the potential to affect contractors pursuing bid protests for U.S. Department of Defense (DoD) procurements. As discussed below, these changes include: (1) the establishment of an expedited bid protest process for small value contracts; (2) the reporting of a study on the frequency and effects of bid protests filed at both the U.S. General Accountability Office (GAO) and the U.S. Court of Federal Claims (COFC); and (3) the establishment of a data repository to collect bid protest data. These provisions indicate concern – or at least curiosity – among members of Congress about how the bid protest process is impacting DoD procurements. They also have the potential to produce data-driven change in the future.

Establishment of an Expedited Bid Protest Process for Small Value Contracts

Perhaps the most notable change in Section 822 is congressional direction for the DoD to establish a plan and implementation schedule for an expedited agency bid protest process for DoD contracts valued at less than $100,000. In carrying this directive out, the DoD may consult with GAO and the COFC to the extent such entities may establish a similar process at their election. The plan and schedule is due no later than December 1, 2019, and DoD is required to submit a report to the congressional defense committees by May 1, 2019.

Study of the Frequency and Effects Of Bid Protests Filed at Both GAO and the COFC

Section 822 also directs the DoD to study the frequency and effects of bid protests involving the same contract award or proposed contract award that are filed at both the GAO and the COFC—referred to colloquially in the industry as second-bite at the apple protests. The DoD is directed to include in its study at a minimum: (i) the number of protests filed at both tribunals and the results of protests filed at both tribunals; (ii) the number of such protests where the tribunals differed in denying or sustaining the action; (iii) the length of time, in average time and median time from (a) the initial filing at GAO to a decision at the COFC, (b) filing with each tribunal to decision by the tribunal, (c) the time at which the basis of the protest is known to the time of filing in each tribunal, and (d) in the case of an appeal from a decision of the COFC, from the date of the initial filing of the appeal to decision in the appeal; (iv) the number of protests where performance was stayed or enjoined and for how long; (v) if performance was stayed or enjoined, whether the requirement was obtained by the government in the interim through another vehicle or in-house, or whether during the period of the stay or enjoining the requirement went unfulfilled; (vi) separately for each tribunal, the number of protests where performance was stayed or enjoined and monetary damages were awarded, which shall include for how long performance was stayed or enjoined and the amount of monetary damages; (vii) whether the protestor was a large or small business; and (viii) whether the protestor was the incumbent in a prior contract for the same or similar product or service.

Congress also directed the DoD to provide a report within 180 days of the enactment of the Act—or by February 9, 2019—on the results of the study, along with related recommendations for improving the expediency of the bid protest process. The report will be shared with the congressional defense committees, the Committee on the Judiciary of the Senate, and the Committee on the Judiciary of the House of Representatives. In preparing the report, the DoD Secretary is instructed to consult with the Attorney General of the United States, the Comptroller General of the United States, and the United States Court of Federal Claims. Although the NDAA does not instruct the release of a public report, as of the date of this blog post, the DoD has not released a public version of this report.

Establishment of Data Repository to Collect Bid Protest Data

Finally, Section 822 also instructs the DoD to establish  and continuously maintain a data repository to collect on an ongoing basis the information captured in the ordered study on the frequency and effects of bid protests involving the same contract award or proposed contract award that are filed at both the GAO and the COFC. The DoD is also instructed to include relevant bid protest data determined necessary and appropriate to allow the DoD, GAO, and the COFC to assess and review bid protests over time.

Conclusion

While these provisions do not rise to the level of the major reforms seen in recent years' Defense authorization bills, they indicate ongoing concern among members of Congress about the impact and cost of bid protests and the potential need to further overhaul bid protest processes. They also are likely to lead to increased information and transparency regarding protests, potentially providing the fodder for more significant reforms in the years to come.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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