[Federal Register: October 1, 2002 (Volume 67, Number 190)]
[Proposed Rules]
[Page 61542-61545]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01oc02-24]
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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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GENERAL ACCOUNTING OFFICE
4 CFR Part 21
General Accounting Office, Administrative Practice and Procedure,
Bid Protest Regulations, Government Contracts
AGENCY: General Accounting Office.
ACTION: Proposed rule.
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SUMMARY: The General Accounting Office (GAO) is proposing to revise its
Bid Protest Regulations, promulgated in accordance with the Competition
in Contracting Act of 1984, to conform the current regulation to
current practice, and otherwise to improve the overall efficiency and
effectiveness of the bid protest process at GAO. GAO has not revised
Part 21 since 1996, and the proposed changes will clarify several
aspects of the bid protest process that have evolved since that time.
DATES: Comments must be submitted on or before November 12, 2002.
ADDRESSES: Comments should be addressed to: John M. Melody, Assistant
General Counsel, General Accounting Office. Comments should be
submitted by e-mail at BidProtestRegs@gao.gov, or by facsimile at 202-
512-9749.
FOR FURTHER INFORMATION CONTACT: John M. Melody (Assistant General
Counsel) or David A. Ashen (Deputy Assistant General Counsel), 202-512-
9732.
SUPPLEMENTARY INFORMATION: On February 25, 2002, the General Accounting
Office (GAO) published an Advance Notice of Proposed Rulemaking (67 FR
8485) soliciting comments on several changes to its Bid Protest
Regulations, promulgated in accordance with the Competition in
Contracting Act of 1984, 31 U.S.C. 3551-3556. The advance notice was
prompted by GAO's recognition that there have been legal developments
and changes in practice that have occurred since the last revision, in
1996. Of particular note, since the 1996 revision to GAO's regulation,
alternative dispute resolution has grown in use, electronic filing has
become a reality, and the Court of Appeals for the Federal Circuit and
Court of Federal Claims have issued significant decisions regarding
review of affirmative responsibility determinations. The advance notice
requested comments on changes already under consideration in these and
other areas, and also solicited suggestions for other changes to the
regulation that may enhance the efficiency and overall effectiveness of
the bid protest process at GAO.
Interested persons were invited to submit comments on GAO's advance
notice by April 1, 2002. We received written comments from four federal
agencies, one industry association, one nonprofit institute, and two
individual attorneys. In preparing this proposed rule, we have
carefully considered all comments received.
As a result of comments received, GAO proposes to leave unchanged
the timeliness rule under paragraph (a)(2) of Sec. 21.2, one of the
areas identified in the advance notice as being considered for change.
As explained in the advance notice, the paragraph currently provides
that, where a debriefing is requested and required, any protest basis
that is known or should have been known, either before or as a result
of the debriefing, shall not be filed prior to the debriefing date
offered to the protester. This rule permits protesters to delay--until
after a debriefing--protesting certain matters that may arise during
the procurement. We considered revising this rule because delays in
filing protests are inconsistent with GAO's general view that prompt
resolution of protests is beneficial to the procurement system. As one
commenter pointed out, however, because many alleged improprieties that
may occur during a procurement ultimately may have no effect on the
award decision, revising the rule to promote earlier protests could
result in an increased number of unnecessary protests. We agree with
the commenter, and since the delayed filing has arisen in only a very
few cases, while the number of unnecessary protests could be much
greater, we believe it is advisable to leave this provision unchanged.
Explanations of significant proposed revisions to GAO's Bid Protest
Regulations are set forth below.
Methods for Filing Documents
GAO proposes to revise paragraph (g) of Sec. 21.0 to clarify that
protests and other documents may be filed by facsimile, and to provide
also that, subject to restrictions where a protective order has been
issued, all filings, including protests, may be filed by other
electronic means, such as electronic mail (e-mail). This proposed
change reflects recent efforts by GAO to make e-mailed protests
feasible; for example, GAO has established a means for determining the
time that an e-mailed protest was filed. Further, GAO proposes to
revise the paragraph to make it clear that, regardless of the delivery
method chosen, the filing party bears the risk that the document will
not be timely received at GAO. Other paragraphs have been similarly
revised to reflect GAO's openess towards electronic communications
generally. In this regard, GAO proposes to revise paragraph (b) of Sec.
12.12 to make clear that decisions, when issued, may be transmitted to
the parties by e-mail, and may be accessed by electronic means.
Similarly, GAO proposes revising paragraph (c) of Sec. 21.7 to provide
that GAO, in its discretion, may hold hearings by video or other
electronic means.
Alternative Dispute Resolution (ADR)
Consistent with the advance notice and the suggestions of several
commenters, GAO's proposed revision adds, as new paragraph (h) under
Sec. 21.0, a definition of ADR. This definition clarifies that ADR
consists of techniques--such as outcome prediction and negotiation
assistance--designed to resolve cases expeditiously, without a written
decision. The definition is limited in detail, consistent with the view
of GAO and several commenters that ADR should remain as flexible as
possible in order to ensure that it can be tailored to fit the
circumstances and the parties' interests in a particular case. GAO also
proposes to revise paragraph (e) of Sec. 21.10 to specifically provide
that ADR is among the flexible alternative procedures GAO may use to
promptly and fairly resolve a protest.
Comments on Agency Report
GAO proposes to revise paragraph (i) of Sec. 21.3 by eliminating
certain language. Currently, the paragraph states that protesters may
satisfy the
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requirement that comments be filed within 10 days of receipt of the
agency report by instead filing within 10 days a statement requesting
that their protest be decided on the existing record, or requesting an
extension of time. GAO believes this language may have led protesters
to forgo filing substantive comments, believing them unnecessary for a
successful protest. In fact, absent a substantive response to the
agency's report, there often is no basis for GAO to question the
agency's position. GAO therefore proposes to delete the reference to a
request that the protest be decided on the existing record. Similarly,
a protester's request for an extension of time for filing comments,
where that request is not granted, does not provide a basis for the
protester to delay its comments. GAO therefore proposes to add language
to make it clear that comments may be delayed only where GAO grants an
extension. Finally, since GAO also may establish a filing period
shorter than 10 days where it adopts accelerated procedures (see Sec.
21.10(e)), GAO proposes adding language requiring that comments be
filed in fewer than 10 days where GAO has established such a shorter
period.
GAO Review of Small Business Certificate of Competency Program
GAO proposes to revise paragraph (b)(2) of Sec. 21.5. That
paragraph currently provides that GAO generally will not consider
protests challenging Certificate of Competency (COC) reviews unless
there is a showing of possible bad faith by government officials, or a
showing that vital responsibility information was not considered. GAO
proposes to revise the paragraph, first, by adding SBA's alleged
failure to follow its own regulations as an exception to the general
rule that GAO will not review protests in this area. This change is
intended to make the extent of GAO's review in the COC area consistent
with that in the area of protests of procurements under section 8(a) of
the Small Business Act (Sec. 21.5(b)(3)), and protests of affirmative
determinations of responsibility (Sec. 21.5(c), as proposed herein to
be revised). Second, the proposed revision makes it clear, consistent
with GAO decisions, that GAO review of protests under another
exception--where SBA allegedly failed to consider vital responsibility
information--is limited to considering the manner in which the
information was presented to or withheld from SBA by the contracting
agency. Finally, the proposed revised language makes it clear that, in
light of the deference accorded SBA in small business matters, GAO will
interpret the exceptions to the general rule narrowly.
Affirmative Determinations of Responsibility
GAO proposes to revise paragraph (c) of Sec. 21.5. That paragraph
provides that GAO will review affirmative determinations of
responsibility only under very limited circumstances, reflecting GAO's
view that such determinations generally do not lend themselves to
reasoned review. As noted in the advance notice, in January 2001, the
Court of Appeals for the Federal Circuit held in Impresa Construzioni
Geom. Domenico Garufi v. United States, 238 F.3d 1324 (Fed. Cir. 2001),
that affirmative determinations of responsibility are subject to review
by the Court of Federal Claims under the ``arbitrary and capricious''
standard applicable under the Administrative Procedure Act. In light of
that decision, and notwithstanding the fact that GAO is not applying
the Administrative Procedure Act in its bid protest process, GAO
proposes to revise the paragraph to expand its review of affirmative
determinations of responsibility to include protests where there is
evidence raising serious concerns as to whether the contracting officer
unreasonably failed to consider available relevant information, or
otherwise violated statute or regulation. While GAO recognizes that the
revision to its regulation may expand review in the area, the proposed
language is intended to limit any expanded review, in recognition of
the agency's discretion, to protests where the protester proffers
evidence supporting the allegation--that is, where the protest is not
based on mere information and belief or speculation--and where the
allegation is substantial enough to bring into question whether the
affirmative determination could have any rational underpinning. The
proposed revised language is designed to achieve a balance between
GAO's desire to promote consistency with the rationale underlying the
Garufi decision, and the possibility--a concern expressed by several
agency commenters--that expanded review by GAO might unduly interfere
with the normal contracting process. Finally, as reflected in the
proposed language, GAO anticipates that allegations most commonly will
be based on the alleged failure of the contracting officer to consider
publicly-available relevant information (as in the Garufi case).
Suspension and Debarment Review
GAO proposes to add new paragraph 21.5(i) to set forth suspension
and debarment actions as issue areas that GAO will not review.
Currently, although GAO generally will not review protests of
suspension and debarment actions, it will consider arguments that an
offeror improperly has been suspended or debarred during the pendency
of a procurement in which it was competing, in order to ensure that the
agency did not act arbitrarily to avoid making award to an offeror
otherwise entitled to award. GAO recently held in Shinwa Elec., B-
290603 et al., Sept. 3, 2002, 2002 CPD [para] --, that it no longer
will review suspension and debarment actions even under this exception
on the ground that the appropriate forum for such challenges is the
agency taking the disputed action. This proposed new paragraph is
intended to make the regulations consistent with this current case law.
Comments Where Hearing Is Held
GAO proposes revising paragraph 21.7(g) to delete language
providing that, if a hearing is to be held, no separate comments on the
agency report should be filed. In practice, GAO rarely calls a hearing
until after the protester and intervenor have commented on the agency
report, since GAO has found that such comments typically are helpful in
determining whether issues can be resolved on the written record and,
thus, whether a hearing is necessary.
Filing of Claim for Costs Following Agency Corrective Action
GAO proposes to revise paragraph (e) of Sec. 21.8 to clarify the
time within which claims for costs must be filed with the procuring
agency following corrective action by the agency on a GAO protest. The
current regulation requires that such claims be filed within 15 days
after the protester is ``advised that the contracting agency has
decided to take corrective action.'' In a very few cases, following
initial notice that an agency has decided to take corrective action,
there has been a delay in the agency's finalizing the action to be
taken, making it unclear when the 15 days begins to run. See DevTech
Sys., Inc., B-284860.4, Aug. 23, 2002, 2002 CPD ----. The proposed
revised language makes it clear that the 15-day period begins to run
from the time the protester learned (or should have learned) that GAO
has closed the protest in response to the proposed corrective action.
Cases Before Courts of Competent Jurisdiction
GAO proposes to revise paragraph (b) of section 21.11 to clarify
that any case--not only bid protests--will be
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dismissed where the matter involved is the subject of litigation, or
has been decided on the merits, by a court of competent jurisdiction.
This revision is necessary to make it clear that the provision extends
to requests for costs, reconsideration requests, and other matters, not
only bid protests.
Comments
Comments concerning the proposed rule may be submitted by e-mail at
BidProtestRegs@gao.gov, or by facsimile at 202-512-9749.
List of Subjects in 4 CFR Part 21
Administrative practice and procedure, Bid protest regulations,
Government contracts.
For the reasons set out in the preamble, Title 4, Chapter I,
Subchapter B, 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. Amend Sec. 21.0 by revising paragraphs (f) and (g), and adding
new paragraph (h) to read as follows:
Sec. 21.0 Definitions.
* * * * *
(f) Adverse agency action is any action or inaction by a
contracting agency which is prejudicial to the position taken in a
protest filed with the agency, including a decision on the merits of a
protest; the opening of bids or receipt of proposals, the award of a
contract, or the rejection of a bid or proposal despite a pending
protest; or contracting agency acquiescence in continued and
substantial contract performance.
(g) 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, or other electronic means (but see Sec. 21.4(b)
for restrictions on electronic filing where a protective order has been
issued). Hand delivery and other means of delivery may not be
practicable during certain periods due, for example, to security
concerns or equipment failures. In all cases, the filing party is
responsible for ensuring timely receipt at GAO.
(h) Alternative dispute resolution encompasses various means of
resolving cases expeditiously, without a written decision, including
techniques such as outcome prediction and negotiation assistance.
* * * * *
3. Amend Sec. 21.1 by revising paragraph (c) introductorry text
and (c)(1) to read as follows:
Sec. 21.1 Filing a protest.
* * * * *
(c) A protest filed with GAO shall:
(1) Include the name, street address, electronic mail address, and
telephone and facsimile numbers of the protester,
* * * * *
4. Amend Sec. 21.3 by revising paragraphs (a) and (i) to read as
follows:
Sec. 21.3 Notice of protest, submission of agency report, and time
for filing of comment on report.
(a) GAO shall notify the contracting agency by telephone within 1
day after the filing of a protest, and, unless the protest is dismissed
under this part, shall promptly send a written confirmation to the
contracting agency and an acknowledgment to the protester. The
contracting agency shall immediately give notice of the protest to the
contractor if award has been made or, if no award has been made, to all
bidders or offerors who appear to have a substantial prospect of
receiving an award. The contracting agency shall furnish copies of the
protest submissions to those parties, except where disclosure of the
information is prohibited by law, with instructions to communicate
further directly with GAO. All parties shall furnish copies of all
protest communications to the contracting agency and to other
participating parties. All protest communications shall be sent by
means reasonably calculated to effect expeditious delivery.
* * * * *
(i) Comments on the agency report shall be filed with GAO within 10
days after receipt of the report, with a copy provided to the
contracting agency and other participating parties. The protest shall
be dismissed unless the protester files comments within the 10-day
period, unless GAO grants an extension, or establishes a shorter period
in accordance with Sec. 21.10(e). Extensions will be granted on a
case-by-case basis. Unless otherwise advised by the protester, GAO will
assume the protester received the agency report by the due date
specified in the acknowledgment of protest furnished by GAO.
* * * * *
5. Amend Sec. 21.4 by revising paragraph (b) 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 the report which would ordinarily be
subject to a protective order. GAO will review in camera all
information not released to the parties. Where a protective order has
been issued, documents may be filed by electronic means (other than
facsimile transmission) only when specifically authorized by GAO.
* * * * *
6. Amend Sec. 21.5 by revising the introductory text and
paragraphs (b)(2), (c) and (d), and to add new paragraph (i), to read
as follows:
Sec. 21.5 Protest issues not for consideration.
If no protective order has been issued, the agency may withhold
from the parties those portions of the report which would ordinarily be
subject to a protective order. GAO will review in camera all
information not released to the parties. Where a protective order has
been issued, documents may be filed by electronic means (other than
facsimile transmission) only when specifically authorized by GAO.
* * * * *
(b) * * *
* * * * *
(2) Small Business Certificate of Competency Program. Referrals
made to the Small Business Administration pursuant to sec. 8(b)(7) of
the Small Business Act, or the issuance of, or refusal to issue, a
certificate of competency under that section will generally not be
reviewed by GAO. The exceptions, which GAO will interpret narrowly out
of deference to the role of the Small Business Administration (SBA) in
this area, are protests that show possible bad faith on the part of
government officials, or that present allegations that the SBA failed
to follow its own published regulations or failed to consider vital
information bearing on the firm's responsibility due to the manner in
which the information was presented to or withheld from the SBA by the
procuring agency. 15 U.S.C. 637(b)(7).
* * * * *
(c) Affirmative determination of responsibility by the contracting
officer. Because the determination that a bidder or offeror is capable
of performing a contract is largely committed to the contracting
officer's discretion, GAO will generally not consider a protest
challenging such a determination. The exceptions are protests that
allege that definitive responsibility criteria in the
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solicitation were not met and those that identify evidence raising
serious concerns that, in reaching a particular responsibility
determination, the contracting officer unreasonably failed to consider
available relevant information or otherwise violated statute or
regulation.
(d) Procurement integrity. For any Federal procurement, GAO will
not review an alleged violation of subsections (a), (b), (c), or (d) of
sec. 27 of the Office of Federal Procurement Policy Act, 41 U.S.C. 423,
as amended by sec. 4304 of the National Defense Authorization Act for
Fiscal Year 1996, Public Law 104-106, 110 Stat. 186, February 10, 1996,
where the protester failed to report the information it believed
constituted evidence of the offense to the Federal agency responsible
for the procurement within 14 days after the protester first discovered
the possible violation.
* * * * *
(i) Suspensions and debarments. Challenges to the suspension or
debarment of contractors will not be reviewed by GAO. Such matters are
for review by the contracting agency in accordance with the applicable
provisions of the Federal Acquisition Regulation.
7. Amend Sec. 21.7 by revising paragraphs (c) and (g) to read as
follows:
Sec. 21.7 Hearings.
* * * * *
(c) Hearings generally will be conducted as soon as practicable
after receipt by the parties of the agency report and relevant
documents. Although hearings ordinarily will be conducted at GAO in
Washington, DC, hearings may, at the discretion of GAO, be conducted at
other locations, or by telephone or other electronic means.
* * * * *
(g) If a hearing is held, each party shall file comments with GAO
within 5 days after the hearing was held or as specified by GAO. If the
protester has not filed comments by the due date, GAO shall dismiss the
protest.
* * * * *
8. Amend Sec. 21.8 by revising paragraph (e) to read as follows:
Sec. 21.8 Remedies.
* * * * *
(e) The protester shall file any request that GAO recommend that
costs be paid within 15 days of the date on which the protester learned
(or should have learned, if that is earlier) that GAO had closed the
protest based on the agency's decision to take corrective action.
* * * * *
9. Amend Sec. 21.10 by removing paragraph (d)(3), and by revising
paragraph (e) to read as follows:
Sec. 21.10 Express options, flexible alternative procedures,
accelerated schedules, summary decisions, and status conferences.
* * * * *
(e) GAO may use flexible alternative procedures to promptly and
fairly resolve a protest, including alternative dispute resolution,
establishing an accelerated schedule and/or issuing a summary decision.
* * * * *
10. Amend Sec. 21.11 by revising paragraph (b) to read as follows:
Sec. 21.11 Effect of judicial proceedings.
* * * * *
(b) GAO will dismiss any case where the matter involved is the
subject of litigation before, or has been decided on the merits by, a
court of competent jurisdiction. GAO may, at the request of a court,
issue an advisory opinion on a bid protest issue that is before the
court. In these cases, unless a different schedule is established, the
times provided in this part for filing the agency report
(Sec. 21.3(c)), filing comments on the report (Sec. 21.3(i)), holding a
hearing and filing comments (Sec. 21.7), and issuing a decision
(Sec. 21.9) shall apply.
11. Amend Sec. 21.12 by revising paragraph (b) to read as follows:
Sec. 21.12 Distribution of decisions.
* * * * *
(b) Decisions may be distributed to the parties, and are available
from GAO, by electronic means.
Anthony H. Gamboa,
General Counsel.
[FR Doc. 02-24803 Filed 9-30-02; 8:45 am]
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