B-208159.21, Apr 4, 1990

B-208159.21: Apr 4, 1990

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Chairman: This is in response to your request for our comments on a proposed amendment to H.R. 2461 to allow federal employees affected by a decision of the Department of Defense (DOD) to contract for services to file a bid protest with the General Accounting Office (GAO) and to file suit in federal court challenging the decision. There are potentially other forums available. The protester alleges that the resulting comparison with the cost of performing the work in-house is faulty or that there has not been compliance with the basic procurement rules applicable to the competition. This proposed expansion of the class of interested parties eligible to file bid protests is consistent with our goal of providing an impartial forum for the resolution of bid protests to those who have a legitimate economic interest in the outcome of the award process.

B-208159.21, Apr 4, 1990

DIGEST

The Honorable Earl Hutto: Chairman, Subcommittee on Readiness Committee on Armed Services House of Representatives

Dear Mr. Chairman:

This is in response to your request for our comments on a proposed amendment to H.R. 2461 to allow federal employees affected by a decision of the Department of Defense (DOD) to contract for services to file a bid protest with the General Accounting Office (GAO) and to file suit in federal court challenging the decision. We believe that federal employees should be able to question contracting out decisions, and we would support either of the alternatives for doing so included in the proposal. However, as discussed below, there are potentially other forums available, and we recommend that the Congress select one forum for resolution of these questions.

Under the Competition in Contracting Act of 1984 (CICA), 31 U.S.C. Secs. 3551 et seq. (Supp. V 1987), we decide bid protests brought by interested parties, defined in CICA as any actual or potential bidder or offeror whose direct economic interest would be affected by the award or failure to award the challenged contract. With respect to decisions whether to contract out under Office of Management and Budget (OMB) Circular No. A- 76, unions or groups of employees do not fall within this definition. Jacksonville Naval Air Station Ass'n, B-227365, June 8, 1987, 87-1 CPD Para. 581. We do, however, currently review protests brought by disappointed bidders or offerors challenging an agency's decision not to contract out, where a competitive solicitation has been issued for the purpose of ascertaining the cost of contracting out, and the protester alleges that the resulting comparison with the cost of performing the work in-house is faulty or that there has not been compliance with the basic procurement rules applicable to the competition. Contract Servs. Co., Inc., 65 Comp.Gen. 41 (1985), 85-2 CPD Para. 472.

Under the proposed amendment, our review would be expanded to include challenges to DOD decisions to contract out by a representative of a majority of the affected federal employees or any recognized labor organization as defined in the proposed bill. This proposed expansion of the class of interested parties eligible to file bid protests is consistent with our goal of providing an impartial forum for the resolution of bid protests to those who have a legitimate economic interest in the outcome of the award process. We believe that there should be a forum for employees to challenge contracting out decisions, and that GAO is a suitable forum.

At the same time, we are concerned that a multiplicity of avenues for challenging contracting out decisions may preclude the quick and efficient resolution of disputes concerning those decisions. If the proposed amendment is adopted, federal employees will be able to challenge DOD contracting out decisions both before GAO and in the federal courts. Congress may wish to require that these challenges be brought to one forum or the other. More important, the Supreme Court is currently considering the question of whether unions may arbitrate or grieve agency contracting out decisions under current law. Internal Revenue Serv. v. Fed. Labor Relations Auth., 852 F.2d 880 (D.C. Cir. 1988, cert. granted, 110 S. Ct. 47 (1989) (No. 88-2123, argued Jan. 8, 1990). If the Supreme Court finds that contracting out decisions may be grieved or arbitrated, Congress may wish to consider whether either forum created by the proposed amendment is still necessary.

Sincerely yours,

Comptroller General

of the United States