December 1, 2016 - Protests & Litigation

Conference Committee Drops Controversial Bid Protest Reforms from NDAA FY 17, Opting Instead for More Study and a Higher Threshold for DoD Task Order Protests

LitigationEarlier this year, Congress toyed with the idea of significant reform to federal Government Accountability Office (“GAO”) bid protest procedures but in the end appears to have opted only to tinker with them and punt the issue into the next Congress.

The proposed protest reforms were part of the Senate version of the National Defense Authorization Act for Fiscal Year 2017 (“NDAA”), S. 2943, which passed the Senate on June 14, 2016. Unlike the House version of the NDAA, H.R. 4909, the Senate version proposed reforms to GAO protests that could have had significant impact.  The Senate version of the bill, among other things, proposed to:  (1) eliminate contractors’ ability to protest DoD task and delivery orders if DoD determined it had established an appropriate internal review and oversight process; and (2) require unsuccessful, incumbent GAO protestors to repay any money above incurred costs on bridge contracts or extensions awarded to them because of their protest.  The House version did not contain any similar provisions, and the two bills went to a Conference Committee on July 14, to resolve a multitude of differences between the bills.

The resulting Conference Report dropped the Senate bid protest reform provisions.  Instead, the Conference Committee proposed further study of the impact of bid protests on federal contracting.  Under Section 885 of the Conference Report, DoD is to commission a report that will address 14 factors set out by Congress, including an analysis of bid protest trends and statistics, and a study of how government personnel and private contractors perceive the bid protest rules to impact federal procurements.  This study will be due one year after passage of the NDAA, which presumably pushes the issue of potential bid protest reform into at least late 2017.

The Conference Committee did, however, propose two significant tweaks to civilian and DoD task and delivery order protests:

  1. Under Section 835 of the Conference Report, Congress would renew and make permanent GAO’s jurisdiction over protests of civilian agency task and delivery orders with values exceeding $10 million – the authorization had sunset at the end of September.
  2. Perhaps more significantly, in that same section the Committee proposes to increase the threshold for protests of DoD task and delivery orders from $10 million to $25 million. Fewer DoD task and delivery orders will thus be subject to protest if the NDAA is passed in its current form.

We expect Congress to vote on the Conference Report version of the NDAA sometime in the very near future. President Obama threatened to veto prior versions of the bill, but at the last minute, the Conference Committee attempted to assuage the Administration’s concerns by removing some controversial provisions.  Even so, its prospects for signature by the President are uncertain.