B-208159.8, MAY 2, 1985, OFFICE OF GENERAL COUNSEL

B-208159.8, MAY 2, 1985, OFFICE OF GENERAL COUNSEL

PRECIS-UNAVAILABLE

THE HONORABLE FRANK HORTON: RANKING MINORITY MEMBER SUBCOMMITTEE ON LEGISLATION AND NATIONAL SECURITY COMMITTEE ON GOVERNMENT OPERATIONS HOUSE OF REPRESENTATIVES

DEAR MR. HORTON:

THIS IS IN RESPONSE TO YOUR LETTER OF MARCH 26, 1985, TRANSMITTING TWO ADDITIONAL QUESTIONS IN CONNECTION WITH MY TESTIMONY AT THE SUBCOMMITTEE HEARING OF FEBRUARY 28 ON THE CONSTITUTIONALITY OF THE GENERAL ACCOUNTING OFFICE'S BID PROTEST FUNCTION. SINCE WE ANSWERED THE FIRST QUESTION AT THE HEARINGS, IN ACCORDANCE WITH THE ADVICE OF MR. STEPHEN DANIELS OF YOUR STAFF WE ARE FORWARDING OUR ANSWER TO THE SECOND QUESTION ONLY. THE QUESTION AND ANSWER FOLLOW:

QUESTION #2

YOU POINT OUT THAT JUSTICE'S OBJECTIONS TO THE COMPTROLLER GENERAL'S AUTHORITY TO LIFT STAYS NEED NOT HAVE LED TO A DIRECTIVE FRUSTRATING THE STAY PROVISION IN ITS ENTIRETY. YOU SUGGEST THAT CONGRESS' CLEAR INTENT COULD HAVE BEEN LARGELY ACCOMMODATED, IF AGENCIES HAD BEEN DIRECTED, INSTEAD, TO OBSERVE A 90-DAY STAY IN ANY CASE WHERE THE NATIONAL INTEREST DID NOT REQUIRE OTHERWISE. IN THAT WAY, THE ISSUE OF THE COMPTROLLER GENERAL'S DISCRETION WOULD NOT STAND IN THE WAY OF AN ORDERLY BID PROTEST PROCEDURE.

A. HAVE YOU HAD ANY INDICATION THAT ANY OF THE FEDERAL AGENCIES MAY INTEND UNILATERALLY TO PROCEED ON THAT BASIS, OR A SIMILAR ONE?

ANSWER

WE SUGGESTED IN MY FEBRUARY 28 TESTIMONY THAT AGENCIES COULD COMPLY WITH THE LAW IN A MANNER CONSISTENT WITH THE ATTORNEY GENERAL'S OPINION BY NOT PROCEEDING WITH A PROTESTED PROCUREMENT ACTION FOR 90 DAYS EVEN IF OUR OFFICE ISSUES AN EARLIER DECISION, AND BY ENDING A STAY AFTER 90 DAYS IF A DECISION OR SATISFACTORY JUSTIFICATION FOR DELAY HAS NOT BEEN ISSUED BY OUR OFFICE. WE HAVE NOT RECEIVED AN INDICATION FROM ANY FEDERAL AGENCY THAT IT INTENDS TO FOLLOW OUR SUGGESTION OR ANY SIMILAR PROCEDURE.

QUESTION

B. IF AGENCIES ARE SUSPENDING PROTESTED CONTRACTS, WHAT AUTHORITY ARE THEY BASING THIS ACTION ON, NOW THAT THEY HAVE BEEN PROHIBITED FROM BASING THEIR ACTIONS ON THE DISPUTED CICA PROCEDURES?

ANSWER

OUR RECORDS DO NOT SHOW THAT AGENCIES ARE SUSPENDING PERFORMANCE UNDER CONTRACTS WHERE POST-AWARD PROTESTS HAVE BEEN FILED. IF THE AGENCIES WERE TO SUSPEND PERFORMANCE IN SUCH POST-AWARD SITUATIONS, THEY WOULD MOST LIKELY BASE THEIR ACTION ON THE RECENTLY AMENDED, FEDERAL ACQUISITION REGULATION (FAR), SEC. 33.104 (FEDERAL ACQUISITION CIRCULAR 84-6, JANUARY 11, 1985). THAT REGULATION WHILE STATING THAT THE COMPETITION IN CONTRACTING ACT (CICA) SUSPENSION AND STAY PROVISIONS ARE UNCONSTITUTIONAL AND SHOULD NOT BE FOLLOWED, PROVIDES THAT THE CONTRACTING OFFICER MAY SEEK AN AGREEMENT WITH THE CONTRACTOR FOR A NO-COST PERFORMANCE SUSPENSION IF IT APPEARS THAT THE AWARD MAY BE INVALIDATED AND A DELAY IN PERFORMANCE WOULD NOT PREJUDICE THE GOVERNMENT. IT DOES APPEAR, HOWEVER, THAT WHERE A PREAWARD PROTEST HAS BEEN FILED, AGENCIES ARE WITHHOLDING THE AWARD UNTIL WE ISSUE OUR DECISION. IN THESE INSTANCES WE ASSUME THAT THE AGENCIES ARE WITHHOLDING AWARD PURSUANT TO THE CURRENT FAR WHICH ALSO PROVIDES THAT AGENCIES ARE TO WITHHOLD AWARD IN PROCUREMENTS WHERE A PREAWARD PROTEST IS FILED UNLESS THE CONTRACTING OFFICER OR OTHER DESIGNATED OFFICIAL DETERMINES THAT PRESENT AWARD IS ADVANTAGEOUS TO THE GOVERNMENT.

QUESTION

C. IS THERE ANYTHING YOU AT GAO ARE DOING OR CAN DO TO HELP AGENCIES WORK WITHIN THE NEW BID PROTEST PROCESS TO AFFORD RELIEF IN A WAY THAT WON'T CAUSE THEM TO RUN AFOUL OF THE OMB DIRECTIVE?

ANSWER

OMB HAS DIRECTED AGENCIES NOT TO FOLLOW THE STATUTORY STAY PROVISIONS, BUT RATHER HAS DIRECTED THAT THEY SHOULD FOLLOW THE FAR. FAR REQUIRES THAT A CONTRACT NOT BE AWARDED WHEN A PROTEST IS FILED UNLESS THERE IS A WRITTEN DETERMINATION THAT CIRCUMSTANCES EXIST WHICH JUSTIFY MAKING THE AWARD BEFORE THE PROTEST IS RESOLVED. SEE FAR SEC. 33.104 (FAC 84-6). THE WRITTEN DETERMINATION UNDER FAR IS SUFFICIENT TO SATISFY THE CICA STANDARDS FOR MAKING AWARD IN SUCH CIRCUMSTANCES (I.E., IT USES THE TERMS SET FORTH IN 31 U.S.C. SEC. 3553(D)(2) EVEN THOUGH IT DOES NOT REFER TO CICA OR IS OTHERWISE MADE UNDER THE STATUTE) AND IF THE WRITTEN DETERMINATION IS MADE BY THE HEAD OF THE PROCURING ACTIVITY (CICA DOES NOT ALLOW THIS FUNCTION TO BE DELEGATED), WE THINK THERE WOULD BE SUBSTANTIAL COMPLIANCE WITH BOTH CICA AND THE OMB DIRECTIVE.

WITH RESPECT TO SUSPENSION OF CONTRACT PERFORMANCE IF A PROTEST IS RECEIVED AFTER AWARD, THE FAR DOES PERMIT SUCH SUSPENSION, BUT ONLY IF "IT APPEARS LIKELY THAN AN AWARD MAY BE INVALIDATED AND A DELAY IN MERITS. C.F.R. SEC. 21.3(F). GOVERNMENT'S INTEREST." WITH SOME LESS RESTRICTIVE LANGUAGE IN THE FAR, ESSENTIALLY PERMITTING CONTRACT SUSPENSION IN MOST CASES, THE AGENCIES COULD, WE THINK, BE IN SUBSTANTIAL COMPLIANCE WITH CICA WITHOUT RUNNING AFOUL OF THE OMB DIRECTIVE.

OTHERWISE, WE DO NOTE THAT THE AGENCIES HAVE BEEN FOLLOWING THE CICA BID PROTEST PROVISIONS OTHER THAN THOSE CONCERNING THE STAY OF AWARD OR SUSPENSION OF PERFORMANCE AND THE PAYMENT OF COSTS. WE ARE ENCOURAGING THE AGENCIES TO CONTINUE THEIR COMPLIANCE AND, WITHIN THE LIMITS IMPOSED UPON US BY THE EXECUTIVE BRANCH, WE ARE DOING OUR BEST TO PROVIDE AN EXPEDITIOUS AND FAIR BID PROTEST FORUM.