[Federal Register: December 20, 2004 (Volume 69, Number 243)]
[Proposed Rules]
[Page 75878-75880]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20de04-35]
========================================================================
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.
========================================================================
[[Page 75878]]
GOVERNMENT ACCOUNTABILITY OFFICE
4 CFR Part 21
Government Accountability Office, Administrative Practice and
Procedure, Bid Protest Regulations, Government Contracts
AGENCY: Government Accountability Office.\1\
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Government Accountability Office (GAO) is proposing to
amend its Bid Protest Regulations, promulgated in accordance with the
Competition in Contracting Act of 1984 (CICA), 31 U.S.C. 3551-3556, to
implement the requirements in the Ronald W. Reagan National Defense
Authorization Act for Fiscal Year 2005, Pub. L. 108-375, 118 Stat.
1811, enacted on October 28, 2004. The proposed amendments to GAO's Bid
Protest Regulations implement the legislation's provisions related to
the bid protest process, where a public-private competition has been
conducted under Office of Management and Budget (OMB) Circular A-76, as
revised on May 29, 2003, regarding an activity or function of a Federal
agency performed by more than 65 full-time equivalent employees of the
Federal agency. In this regard, the legislating grants designated
representatives of an in-house competitor the status of an ``interested
party'' to file a protest at GAO or the status of an ``intervenor'' to
participate in a protest filed at GAO. In addition, consistent with the
legislation, GAO is proposing to add a provision to its Bid Protest
Regulations stating that GAO will not review the decision of an agency
tender official to file a protest (or not to file a protest) in
connection with a public-private competition. At this time, GAO
believes that these proposed revisions are the only regulatory changes
necessary to implement the statutory requirements expanding the
definitions of an interested party and an intervenor in protests
involving public-private competitions. GAO welcomes comments on these
proposed revisions, as well as suggestions for changes to other areas
of GAO's Bid Protest Regulations or the bid protest process at GAO
relating to protests of public-private competitions conducted under OMB
Circular A-76.
---------------------------------------------------------------------------
\1\ Effective July 7, 2004, the agency's legal name became the
Government Accountability Office pursuant to Pub. L. 108-271, 118
Stat. 811. GAO will amend title 4, chapter I of the CFR to reflect
the name change.
---------------------------------------------------------------------------
DATES: Comments must be submitted on or before February 18, 2005.
ADDRESSES: Comments may be submitted by e-mail at RegComments@gao.gov,
or by facsimile at (202) 512-9749. Due to delivery delays, submission
by regular mail is discouraged. Comments may be sent by Federal Express
or United Parcel Service addressed to: Michael R. Golden, Assistant
General Counsel, Government Accountability Office, 441 G Street, NW.,
Washington, DC 20548. GAO intends to make all comments filed available
to the public, including names and other identifying information.
Information in a submission that the sender does not believe should be
released should be clearly marked.
FOR FURTHER INFORMATION CONTACT: Daniel I. Gordon (Managing Associate
General Counsel), Michael R. Golden (Assistant General Counsel) or
Linda. S. Lebowitz (Senior Attorney), (202) 512-9732.
SUPPLEMENTARY INFORMATION: On June 13, 2003, GAO published a notice in
the Federal Register, 68 FR 35411, which sought comments on a number of
issued concerning the effect of OMB's revisions to Circular A-76
(revised Circular), which governs how Federal agencies determine
whether to transfer performance of commercial activities from the
public to the private sector, or vice versa. Performance of Commercial
Activities, 68 FR 32134 (May 29, 2003). These revisions make
competitions involving in-house competitors more similar to private-
private competitions conducted under the Federal Acquisition Regulation
(FAR) than has previously been the case with the competitive sourcing
process. GAO specifically solicited comments regarding two key legal
questions, namely, whether the revisions made to the Circular affect
the standing of an in-house competitor to file a protest at GAO and, if
so, who should have the representational capacity to file such a
protest. The notice also solicited comments on other procedural issues
raised by the Circular's revisions.
In response to this notice, GAO received a total of 71 sets of
comments: 1 letter from three members of Congress; 9 letters from
agencies; 5 letters from unions; 7 letters from associations; 47
letters from individuals (including Federal employees); and 2 letters
from private lawyers. Some of those submitting comments argued that no
one has standing to protest on behalf of an in-house competitor without
an amendment to CICA, which provides the statutory framework for GAO's
bide protest function; others contended that the 2003 revisions to the
Circular justified GAO finding that individual Federal employees and
their unions now had standing to file protests without the need to
amend CICA. GAO also received comments concerning a number of other
procedural issues including, for example, the requirement to exhaust
the administrative appeal process before filing a protest a GAO, the
authority for GAO to review streamlined competitions involving 65 or
fewer full-time equivalent employees, and the applicability of GAO's
protective order procedures.
GAO carefully considered the comments received and ultimately
addressed the in-house competitor standing issue in Dan Duefrene;
Kelley Dull; Brenda Neuerburg; Gabrielle Martin, B-293590.2 et al.,
April 19, 2004, CPD ] 82. In that decision, GAO concluded that,
notwithstanding the May 29, 2003 revisions to OMB Circular A-76, the
in-house competitor in a public-private competition conducted under the
Circular was not an offeror and, therefore, under the current language
of CICA, no representative of an in-house competitor was an interested
party eligible to maintain a protest before GAO.
On the same day that the decision Dan Deufrene, et al. was issued,
the Comptroller General sent a letter to the cognizant congressional
committees, explaining that, based on GAO's legal analysis of its
statutory authority to decide bid protests under CICA, because an in-
house competitor did not meet the current CICA definition of an
interested party, GAO was required to dismiss any
[[Page 75879]]
protest filed by an in-house competitor. In the letter, the Comptroller
General recognized that policy considerations, including the principles
unanimously agreed to by the congressionally-chartered Commercial
Activities Panel, weighed in favor of allowing certain protests by in-
house competitors with respect to A-76 competitions and, as a result,
Congress might want to consider amending CICA to allow GAO to decide
such protests. Consistent with that letter, the National Defense
Authorization Act for Fiscal Year 2005 amended GAO's statutory
authority under CICA to decide protests filed by in-house competitors.
The proposed revisions to GAO's Bid Protest Regulations to
implement the National Defense Authorization Act for Fiscal Year 2005
are set forth below:
Interested Party
In accordance with sec. 326(a) of the National Defense
Authorization Act for Fiscal Year 2005, GAO proposes to add a new
paragraph to paragraph (a) of 4 CFR 21.0 to expand the definition of an
interested party to include the official responsible for submitting the
Federal agency tender in a public-private competition conducted under
OMB Circular A-76 regarding an activity or function of a Federal agency
performed by more than 65 full-time equivalent employees of the Federal
agency.
Intervenor
In accordance with sec. 326(c) of the National Defense
Authorization Act for Fiscal Year 2005, GAO proposes to add a new
paragraph to paragraph (b) of 4 CFR 21.0 to expand the definition of an
intervenor to include a person representing a majority of the employees
of the Federal agency who are engaged in the performance of the
activity or function subject to the public-private competition
conducted under OMB Circular A-76 regarding an activity or function of
a Federal agency performed by more than 65 full-time equivalent
employees of the Federal agency. In addition, based on the proposed
expansion of the definition of an interested party, GAO proposes to
revise paragraph (b) of 4 CFR 21.0 to expand the definition of an
intervenor to include the official responsible for submitting the
Federal agency tender.
Issues Not for GAO Review
In accordance with sec. 326(b) of the National Defense
Authorization Act for Fiscal Year 2005, GAO is proposing to add a new
paragraph to 4 CFR 21.5 to reflect that GAO will not review the
decision of an agency tender official to file a protest (or not to file
a protest) in connection with a public-private competition.
These proposed revisions reflect the only language in sec. 326 of
the National Defense Authorization Act for Fiscal Year 2005 that
directly amends GAO's bid protest authority under CICA. GAO does not
believe that any other regulatory revisions are required at this time.
GAO solicits comments on these proposed revisions, as well as
suggestions for changes to other areas of GAO's Bid Protest Regulations
or GAO's bid protest relating to A-76 protests under the revised
Circular, including, for example, the applicability of GAO's protective
order procedures. Prior to issuing final regulations, GAO will
determine, based on the comments received in response to this notice of
proposed rulemaking, whether additional revisions to GAO's Bid Protest
Regulations are warranted. GAO also will consider whether any changes
to the bid protest process in the context of GAO's considerations of A-
76 protests under the revised Circular are required and, if so, the
most appropriate means of publicizing these changes, for example, by
revising GAO's Bid Protest Descriptive Guide.
Other Procedural Matters
With reference to the responses GAO received to its notice of June
13, 2003, GAO believes that it is appropriate here to address two
issues raised in that notice--whether GAO would continue to apply the
requirement that the protester first exhaust the administrative appeal
process before filing its protest at GAO and whether GAO would hear
protests of streamlined competitions authorized by the revisions to OMB
Circular A-76. GAO notes that there was virtual unanimity from
commenters concerning the resolution of these two issues.
GAO had a longstanding rule that it would generally not hear a
protest regarding an A-76 cost comparison until the unique A-76
administrative appeal process provided by the agency was exhausted.
GAO's position was based on considerations of comity and efficiency,
and GAO recognized that there was no statutory or regulatory
requirement that an offeror exhaust available agency-level remedies
before protesting to GAO. The revised Circular abolished the unique A-
76 administrative appeal process, instead providing that a directly
interested party could contest at the agency various aspects of a
standard competition and that the resolution of such contest by the
agency would be governed by the procedures in FAR Subpart 33.103, which
describe the agency-level bid protest process.
Under GAO's Bid Protest Regulations with the exception of the
exhaustion rule GAO imposed for A-76 protests, a protester has never
been required to file an agency-level protest before filing a protest
at GAO. In light of the fact that the revised Circular abolishes the
unique A-76 administrative appeal process and in accordance with the
consensus view of the commenters, GAO has decided that it will not
apply the exhaustion requirement to protests filed at GAO challenging
A-76 competitions conducted under the revised Circular. In other words,
protests concerning A-76 competitions under the revised Circular will
be treated just like any other protest filed at GAO. Accordingly, as
with non-A-76 protests, while a prostester challenging an A-76
competition may elect to seek resolution of its protest at the agency
in the first instance, GAO will not require the protester to file an
agency-level protest as a prerequisite to filing a protest at GAO.
Regarding streamlined competitions, i.e., competitions under the
process reserved by the revised Circular for functions involving 65 or
fewer full-time equivalent employees, the revised Circular states that
no party may contest any aspect of the competition. In Vallie Bray, B-
293840, B-293840.2, Mar. 30, 2004, 2004 CPD ] 52, GAO addressed the
protest of a streamlined competition conducted under the revised
Circular. GAO concluded that, where a streamlined competition is
conducted without using the procurement system--that is, without a
solicitation being issued--GAO lacks jurisdiction under CICA to
consider a protest. If, however, an agency issues a solicitation as
part of a streamlined A-76 competition, thereby using the procurement
system to determine whether to contract out or to perform work in-
house, GAO would consider a protest by an interested party alleging
that the agency had not complied with the applicable procedures in the
selection process or that the agency had conducted an evaluation that
was inconsistent with the solicitation's evaluation criteria or
applicable statutes and regulations. GAO intends to follow the Vallie
Bray precedent with respect to protests of streamlined competitions
conducted under the revised Circular.
List of Subjects in CFR Part 21
Administrative practice and procedure, Bid protest regulations,
Government contracts.
For the reasons set out in the preamble, title 34, chapter I,
subchapter
[[Page 75880]]
B, part 21 of the Code of Federal Regulations is proposed to be revised
to read 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 redesignating paragraph (a) as paragraph
(a)(1) and adding new paragraph (a)(2), and by redesignating paragraph
(b) as paragraph (b)(1) and adding new paragraph (b)(2) to read as
follows:
Sec. 21.0 Definitions.
(a)(1) * * *
(a)(2) In a public-private competition conducted under Office of
Management and Budget Circular A-76 regarding an activity or function
of a Federal agency performed by more than 65 full-time equivalent
employees of the Federal agency, the official responsible for
submitting the Federal agency tender is also an interested party.
(b)(1) * * *
(b)(2) If an interested party files a protest in connection with a
public-private competition conducted under Office of Management and
Budget Circular A-76 regarding an activity or function of a Federal
agency performed by more than 65 full-time equivalent employees of the
Federal agency, a person representing a majority of the employees of
the Federal agency who are engaged in the performance of the activity
or function subject to the public-private competition and the official
responsible for submitting the Federal agency tender as described in
paragraph (a)(2) of this section may also be intervenors.
* * * * *
3. Amend Sec. 21.5 by adding paragraph (k) to read as follows:
Sec. 21.5 Protest issues not for consideration.
(k) Decision whether or not to file a protest on behalf of Federal
employees. GAO will not review the decision of an agency tender
official to file a protest or not to file a protest in connection with
a public-private competition.
Anthony H. Gamboa,
General Counsel, United States Government Accountability Office.
[FR Doc. 04-27615 Filed 12-16-04; 10:03 am]
BILLING CODE 1610-02-M