General Accounting Office, Administrative Practice and Procedure, Bid Protest Regulations, Government Contracts

SUMMARY: The General Accounting Office (GAO) is proposing to revise its

Bid Protest Regulations to implement the requirement in the National

Defense Authorization Act for Fiscal Year 1996 that GAO, for new

protests filed on or after August 8, 1996, issue bid protest decisions

within 100 calendar days from the time a protest is filed at GAO. The

proposed revision will facilitate GAO's meeting the new statutory

deadline for issuing bid protest decisions and will improve the overall

effectiveness of the bid protest process at GAO.

DATES: Comments must be submitted on or before July 1, 1996.

ADDRESSES: Comments should be addressed to: Michael R. Golden,

Assistant General Counsel, General Accounting Office, 441 G Street,

NW., Washington, DC 20548.

FOR FURTHER INFORMATION CONTACT: Michael R. Golden (Assistant General

Counsel) or Linda S. Lebowitz (Senior Attorney), 202-512-9732.

SUPPLEMENTARY INFORMATION: On February 21, 1996, the General Accounting

Office (GAO) published an advance notice of proposed rulemaking (61 FR

6579) soliciting comments on how its bid protest procedures could be

revised in order to facilitate GAO's meeting a new statutory deadline

for issuing bid protest decisions, while also improving the overall

effectiveness of the bid protest process at GAO. In this regard, the

National Defense Authorization Act for Fiscal Year 1996, Pub. L. 104-

106, 110 Stat. 186, which was enacted on February 10, 1996, requires

GAO, effective August 8, 1996, to issue bid protest decisions within

100 calendar days from the time a protest is filed at GAO, shortening

the current 125-calendar-day requirement. (Any further reference to

``days'' means ``calendar days.'') In the advance notice, GAO

specifically invited comments on changing its longstanding timeliness

rule to permit the filing of a protest 5 days after a statutorily

required debriefing, and on the feasibility of promoting early document

production in appropriate cases to facilitate the expeditious

resolution of bid protests. GAO also invited the submission of ideas

regarding the appropriate length of regulatorily imposed deadlines, as

well as suggestions concerning the use of accelerated or alternative

procedures to more expeditiously resolve bid protests.

Interested persons were invited to submit comments on GAO's advance

notice by March 22, 1996. We received written comments from 10 Federal

agencies, 2 bar associations, 2 law firms, 1 industry association, and

2 vendors. In preparing this proposed rule, we have carefully

considered all comments received. The commenters generally recognized

the effectiveness of our previous efforts to streamline the bid protest

process at GAO and to provide meaningful relief to vendors wrongfully

excluded from procurements, as reflected in the final rule published on

August 10, 1995 (60 FR 40737) and effective October 1, 1995. The

commenters made suggestions on how GAO could improve the internal

management of the bid protest process. While we are adopting many of

the suggested management practices and we expect to implement others in

the near future, we believe that regulatory implementation of such

improvements is unnecessary. For example, we are focusing on promptly

resolving early requests for partial or complete dismissals of

protests. We are also establishing procedures to routinely issue

protective orders, where warranted, shortly after a protest is filed.

Significant proposed revisions to GAO's Bid Protest Regulations are

set forth below.

Statutorily Imposed Deadlines

In accordance with sec. 5501 of the National Defense Authorization

Act for Fiscal Year 1996, GAO proposes to revise paragraph (c) of

Sec. 21.3 to require a contracting agency to file its report in

response to a protest with GAO within 30 days, as opposed to 35 days,

after receiving telephone notice of the protest from GAO. GAO also

proposes to revise paragraph (a) of Sec. 21.9 to require our Office to

issue a decision on a bid protest within 100 days after the protest is

filed with our Office.

Timeliness Rules

Consistent with the suggestion of several commenters, GAO's

proposed regulation at Sec. 21.2(a)(2) requires that protests, except

those alleging a solicitation impropriety, filed under a procurement in

which a debriefing is required by law be filed not later than 5 days

after the debriefing; in all other cases, the protest is required to be

filed within 10 days after the basis of protest is known or should have

been known, whichever is earlier. (Wherever possible throughout this

proposed rule in the interests of simplification and user-friendliness,

GAO proposes to establish filing times using multiples of ``five''

days. For example, GAO has reduced the ``knew/should have known''

timeliness rule from 14 days to 10 days.) GAO believes that this

proposed change to the timeliness rule will help to ensure the prompt

and fair resolution of bid protests.

Consistent with the suggestion of several commenters, GAO proposed

to add a new paragraph (a)(4) to Sec. 21.2 which reduces the time for

filing supplemental or amended protests from 14 days (pursuant to the

current ``knew/should have known'' timeliness rule) to 5 days after the

basis of protest is known or should have been known, whichever is

earlier. GAO believes that this shortening of time will permit GAO to

issue a consolidated decision resolving the supplemental or amended

protests, usually based on information provided with the agency report,

within the original 100-day period, thus avoiding rollover situations

or the issuance of separate decisions.

In paragraph (a)(3) of Sec. 21.2, GAO proposes to shorten the time

for filing a protest based on initial adverse agency action on an

agency-level protest from 14 days to 5 days. GAO agrees with those

commenters who suggested this proposed revision, recognizing that in

cases where there has been an agency-level protest, the protest issues

are usually already developed.

[[Page 19206]]

Early Document Production

In paragraph (d)(2) of Sec. 21.1, GAO proposes to add language

requiring a protester to explain the relevancy of specifically

requested documents to its protest grounds.

GAO received numerous comments concerning early document production

as a means of facilitating the prompt resolution of bid protests. As

previously addressed in the final rule at 60 FR 40737, 40738, while GAO

believes that early document production will promote the expeditious

resolution of appropriate bid protests and will result in other system

efficiencies, GAO also believes that early document production should

be accomplished on a voluntary basis, with an agency assessing the

value of such a procedure in a particular case. In this regard, in

paragraph (c) of Sec. 21.3, GAO proposes to explicitly recognize that

documents may be provided prior to the filing of the agency report or

may otherwise be made available to the parties, such as by allowing

parties to review documents on site at the agency prior to the filing

of the report.

GAO also proposes to add to paragraph (c) of Sec. 21.3 a

requirement that 5 days prior to the filing of the agency report, in

cases in which the protester has filed a request for specific

documents, that the agency provide to all parties and GAO a list of

those documents, or portions of documents, which the agency has

released to the protester or intends to produce in its report, and

those documents which the agency intends to withhold from the protester

and the reasons for the proposed withholding. GAO further proposes to

require that any objection to the scope of an agency's proposed

disclosure or nondisclosure of documents be filed with GAO and the

other parties within 1 day of receipt of this list.

Throughout Sec. 21.3, GAO proposes to clarify the language to

reflect the current longstanding practice that parties need not provide

entire documents if only certain portions of these documents are

relevant to the protest.

Several commenters expressed concern that in light of the shortened

timeframe for resolving bid protests, unsolicited submissions after the

filing of comments on the agency report or hearing are particularly

inappropriate. GAO proposes to address this concern by adding a

sentence to the proposed Sec. 21.3(j), currently at Sec. 21.3(i), which

states that the agency and other participating parties shall not submit

any additional statements unless the statements are specifically

requested by GAO or submitted after permission has been granted by GAO.

Other Regulatorily Imposed Deadlines

To facilitate meeting the shortened statutory deadline for issuing

bid protest decisions, GAO also proposes to reduce the following filing

periods: in the proposed Sec. 21.3(g), currently at Sec. 21.3(f), the

agency must respond to supplemental document requests within 2 days, as

opposed to 5 days; in the proposed Sec. 21.3(h), currently at

Sec. 21.3(g), when withheld documents are furnished, the protester's

comments on the agency report are due within the original comment

filing period, not 10 days after its receipt of the additional

documents, unless GAO specifically grants an extension; and in the

proposed Sec. 21.3(i), currently at Sec. 21.3(h), comments on the

agency report are due within 10 days, as opposed to 14 days, after

receipt of the report unless GAO specifically grants an extension. In

paragraph (b) of Sec. 21.14, GAO proposes to shorten the time for

filing requests for reconsideration (the resolution of such requests

are not subject to statutory deadlines) from 14 days to 10 days.

Accelerated or Alternative Procedures

Many commenters suggested that GAO promote the use of flexible

alternative procedures to expedite the resolution of bid protests.

Paragraph (e) of Sec. 21.10 already contains language allowing for the

establishment of accelerated schedules and the issuance of summary

decisions. In paragraph (e) of Sec. 21.10, GAO proposes to add language

specifically acknowledging that flexible alternative procedures may be

used to promptly and fairly resolve bid protests. In response to

numerous comments, GAO also proposes to add a new paragraph (f) to

Sec. 21.10, providing that GAO may conduct status conferences, by

telephone or in person, with all parties participating in the protest

to promote the expeditious development and resolution of the protest.

Miscellaneous Matters

GAO proposes to revise paragraph (e) of Sec. 21.0 in accordance

with the statutory requirement under 31 U.S.C. 3555(b) that GAO

prescribe procedures for the computation of days for all periods

described in Subchapter V, Chapter 35 of Title 31, United States Code.

In paragraph (a) of Sec. 21.3, and in response to one commenter's

suggestion, GAO proposes that all protest communications be sent by

means reasonably calculated to effect ``expeditious'' delivery,

clarifying what was intended by our previous use of ``timely''

delivery.

For annual reporting purposes, GAO proposes to add language to the

proposed Sec. 21.3(d), currently at Sec. 21.3(c), requiring agencies to

include a ``best estimate'' of the value of goods and services being

procured.

GAO proposes to remove the substantive content of paragraph (d) of

Sec. 21.5 addressing procurements protested to the General Services

Administration Board of Contract Appeals, see sec. 5101 of the National

Defense Authorization Act for Fiscal Year 1996, and proposes to replace

the substantive content with a new dismissal ground regarding the

violation of sec. 27 of the Office of Federal Procurement Policy (OFPP)

Act, 41 U.S.C. 423. Specifically, as proposed, Sec. 21.5(d) provides

that for any Federal procurement, GAO will not review an alleged

violation of subsections (a), (b), (c), and (d) of sec. 27 of the OFPP

Act, as amended by sec. 4304 of the National Defense Authorization Act

for Fiscal Year 1996, if the protester failed to report to the Federal

agency responsible for the procurement the information the protester

believes constitutes evidence of the offense within 14 days after the

protester first discovered the possible violation.

Comments

Comments concerning the proposed rule should reference file number

B-259187.2. Comments may be filed by hand delivery or mail at the

address in the address line, or by facsimile transmission 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 to read as follows:

1. Part 21 is revised to read as follows:

PART 21--BID PROTEST REGULATIONS

Sec.

21.0 Definitions.

21.1 Filing a protest.

21.2 Time for filing.

21.3 Notice of protest, submission of agency report, and time for

filing of comments on report.

21.4 Protective orders.

21.5 Protest issues not for consideration.

21.6 Withholding of award and suspension of contract performance.

21.7 Hearings.

21.8 Remedies.

[[Page 19207]]

21.9 Time for decision by GAO.

21.10 Express options, flexible alternative procedures, accelerated

schedules, summary decisions, and status conferences.

21.11 Effect of judicial proceedings.

21.12 Distribution of decisions.

21.13 Nonstatutory protests.

21.14 Request for reconsideration.

Authority: 31 U.S.C. 3551-3556.

Sec. 21.0 Definitions.

(a) Interested party means an actual or prospective bidder or

offeror whose direct economic interest would be affected by the award

of a contract or by the failure to award a contract.

(b) Intervenor means an awardee if the award has been made or, if

no award has been made, all bidders or offerors who appear to have a

substantial prospect of receiving an award if the protest is denied.

(c) Federal agency means any executive department or independent

establishment in the executive branch, including any wholly owned

government corporation, and any establishment in the legislative or

judicial branch, except the Senate, the House of Representatives, and

the Architect of the Capitol and any activities under his direction.

(d) Contracting agency means a Federal agency which has awarded or

proposes to award a contract under a protested procurement.

(e) Days are calendar days. In computing any period of time

described in Subchapter V, Chapter 35 of Title 31, United States Code,

including those described in this part, the day from which the period

begins to run is not counted, and when the last day of the period is a

Saturday, Sunday, or Federal holiday, the period extends to the next

day that is not a Saturday, Sunday, or Federal holiday. Similarly, when

the General Accounting Office (GAO), or another Federal agency where a

submission is due, is closed for all or part of the last day, the

period extends to the next day on which the agency is open.

(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 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. A document may be filed by

hand delivery, mail, or commercial carrier; parties wishing to file a

document by facsimile transmission or other electronic means must

ensure that the necessary equipment is operational at GAO's Procurement

Law Control Group.

Sec. 21.1 Filing a protest.

(a) An interested party may protest a solicitation or other request

by a Federal agency for offers for a contract for the procurement of

property or services; the cancellation of such a solicitation or other

request; an award or proposed award of such a contract; and a

termination of such a contract, if the protest alleges that the

termination was based on improprieties in the award of the contract.

(b) Protests must be in writing and addressed as follows: General

Counsel, General Accounting Office, 441 G Street, NW., Washington, DC

20548, Attention: Procurement Law Control Group.

(c) A protest filed with GAO shall:

(1) Include the name, address, and telephone and facsimile numbers

of the protester,

(2) Be signed by the protester or its representative,

(3) Identify the contracting agency and the solicitation and/or

contract number,

(4) Set forth a detailed statement of the legal and factual grounds

of protest including copies of relevant documents,

(5) Set forth all information establishing that the protester is an

interested party for the purpose of filing a protest,

(6) Set forth all information establishing the timeliness of the

protest,

(7) Specifically request a ruling by the Comptroller General of the

United States, and

(8) State the form of relief requested.

(d) In addition, a protest filed with GAO may:

(1) Request a protective order,

(2) Request specific documents, explaining the relevancy of the

documents to the protest grounds, and

(3) Request a hearing, explaining the reason that a hearing is

needed to resolve the protest.

(e) The protester shall furnish a complete copy of the protest,

including all attachments, to the individual or location designated by

the contracting agency in the solicitation for receipt of protests, or

if there is no designation, to the contracting officer. The designated

individual or location (or, if applicable, the contracting officer)

must receive a complete copy of the protest and all attachments no

later than 1 day after the protest is filed with GAO. The protest

document must indicate that a complete copy of the protest and all

attachments are being furnished within 1 day to the appropriate

individual or location.

(f) No formal briefs or other technical forms of pleading or motion

are required. Protest submissions should be concise and logically

arranged, and should clearly state legally sufficient grounds of

protest. Protests of different procurements should be separately filed.

(g) Unless precluded by law, GAO will not withhold material

submitted by a protester from any party outside the government. If the

protester believes that the protest contains information which should

be withheld, a statement advising of this fact must be on the front

page of the submission. This information must be identified wherever it

appears, and the protester must file, within 1 day after the filing of

its protest with GAO, a redacted copy of the protest which omits the

information.

(h) Parties who intend to file documents containing classified

information should notify GAO in advance to obtain advice regarding

procedures for filing and handling the information.

(i) A protest may be dismissed for failure to comply with any of

the requirements of this section, except for the items in paragraph (d)

of this section. In addition, a protest shall not be dismissed for

failure to comply with paragraph (e) of this section where the

contracting officer has actual knowledge of the basis of protest, or

the agency, in the preparation of its report, was not prejudiced by the

protester's noncompliance.

Sec. 21.2 Time for filing.

(a)(1) Protests based upon alleged improprieties in a solicitation

which are apparent prior to bid opening or the time set for receipt of

initial proposals shall be filed prior to bid opening or the time set

for receipt of initial proposals. In procurements where proposals are

requested, alleged improprieties which do not exist in the initial

solicitation but which are subsequently incorporated into the

solicitation must be protested not later than the next closing time for

receipt of proposals following the incorporation.

(2) Except for protests covered by paragraph (a)(1) of this

section, protests filed by a party that has received a debriefing

required by law shall be filed not later than 5 days after the

debriefing, and in all other cases, not later than 10 days after the

basis of protest is known or should have been known, whichever is

earlier.

(3) If a timely agency-level protest was previously filed, any

subsequent protest to GAO filed within 5 days of actual or

[[Page 19208]]

constructive knowledge of initial adverse agency action will be

considered, provided the agency-level protest was filed in accordance

with paragraphs (a)(1) and (a)(2) of this section, unless the

contracting agency imposes a more stringent time for filing, in which

case the agency's time for filing will control. In cases where an

alleged impropriety in a solicitation is timely protested to a

contracting agency, any subsequent protest to GAO will be considered

timely if filed within the 5-day period provided by this paragraph,

even if filed after bid opening or the closing time for receipt of

proposals.

(4) Protests which supplement or amend a previously filed protest

shall be filed not later than 5 days after the basis of protest is

known or should have been known, whichever is earlier.

(b) Protests untimely on their face may be dismissed. A protester

shall include in its protest all information establishing the

timeliness of the protest; a protester will not be permitted to

introduce for the first time in a request for reconsideration

information necessary to establish that the protest was timely.

(c) GAO, for good cause shown, or where it determines that a

protest raises issues significant to the procurement system, may

consider an untimely protest.

Sec. 21.3 Notice of protest, submission of agency report, and time for

filing of comments 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 reasonable 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.

(b) A contracting agency or intervenor which believes that the

protest or specific protest allegations should be dismissed before

submission of an agency report should file a request for dismissal as

soon as practicable.

(c) The contracting agency shall file a report on the protest with

GAO within 30 days after the telephone notice of the protest from GAO.

The report provided to the parties need not contain documents which the

agency has previously furnished or otherwise made available to the

parties in response to the protest. Five days prior to the filing of

the report, in cases in which the protester has filed a request for

specific documents, the agency shall provide to all parties and GAO a

list of those documents, or portions of documents, which the agency has

released to the protester or intends to produce in its report, and the

documents which the agency intends to withhold from the protester and

the reason for the proposed withholding. Any objection to the scope of

the agency's proposed disclosure or nondisclosure of documents must be

filed with GAO and the other parties within 1 day of receipt of this

list.

(d) The report shall include the contracting officer's statement of

the relevant facts, including a best estimate of the acquisition's

value, a memorandum of law, and a list and a copy of all relevant

documents, or portions of documents, not previously produced,

including, as appropriate: the protest; the bid or proposal submitted

by the protester; the bid or proposal of the firm which is being

considered for award, or whose bid or proposal is being protested; all

evaluation documents; the solicitation, including the specifications;

the abstract of bids or offers; and any other relevant documents. In

appropriate cases, the contracting agency may request that the

protester produce relevant documents, or portions of documents, that

are not in the agency's possession.

(e) Subject to any protective order issued in the protest pursuant

to Sec. 21.4, the contracting agency shall simultaneously furnish a

copy of the report to the protester and any intervenors. The copy of

the report filed with GAO shall list the parties who have been

furnished copies of the report. Where a protester does not have counsel

admitted to a protective order and documents are withheld from the

protester in accordance with this part, the agency shall provide

documents adequate to inform the protester of the basis of the agency's

position.

(f) The contracting agency may request an extension of time for the

submission of the agency report. Extensions will be granted on a case-

by-case basis.

(g) The protester may request additional documents when their

existence or relevance first becomes evident. Except when authorized by

GAO, any request for additional documents must be filed with GAO and

the contracting agency not later than 2 days after their existence or

relevance is known or should have been known, whichever is earlier. The

contracting agency shall provide the requested documents, or portions

of documents, and a list to GAO and the other parties within 2 days or

explain why it is not required to produce the documents.

(h) Upon the request of a party, GAO will decide whether the

contracting agency must provide any withheld documents, or portions of

documents, and whether this should be done under a protective order.

When withheld documents are provided, the protester's comments on the

agency report shall be filed within the original comment filing period

unless GAO determines that an extension is appropriate.

(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 or a written statement

requesting that the case be decided on the existing record, or requests

an extension of time within the 10-day period. 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. Upon a showing that the specific circumstances of a

protest require a period longer than 10 days for the submission of

comments, GAO will set a new date for the submission of comments.

Extensions will be granted on a case-by-case basis.

(j) GAO may request or permit the submission of additional

statements by the parties and by other parties not participating in the

protest as may be necessary for the fair resolution of the protest. The

agency and other participating parties shall not submit any additional

statements unless the statements are specifically requested by GAO or

submitted after permission has been granted by GAO.

Sec. 21.4 Protective orders.

(a) At the request of a party or on its own initiative, GAO may

issue a protective order controlling the treatment of protected

information. Such information may include proprietary, confidential, or

source-selection-sensitive material, as well as other information the

release of which

[[Page 19209]]

could result in a competitive advantage to one or more firms. The

protective order shall establish procedures for application for access

to protected information, identification and safeguarding of that

information, and submission of redacted copies of documents omitting

protected information. Because a protective order serves to facilitate

the pursuit of a protest by a protester through counsel, it is the

responsibility of protester's counsel to request that a protective

order be issued and to submit timely applications for admission under

that order.

(b) If no protective order has been issued, the agency may withhold

from the parties those portions of its report which would ordinarily be

subject to a protective order. GAO will review in camera all

information not released to the parties.

(c) After a protective order has been issued, counsel or

consultants retained by counsel appearing on behalf of a party may

apply for admission under the order by submitting an application to

GAO, with copies furnished simultaneously to all parties. The

application shall establish that the applicant is not involved in

competitive decision-making for any firm that could gain a competitive

advantage from access to the protected information and that there will

be no significant risk of inadvertent disclosure of protected

information. Objections to an applicant's admission shall be raised

within 2 days after receipt of the application, although GAO may

consider objections raised after that time.

(d) Any violation of the terms of a protective order may result in

the imposition of such sanctions as GAO deems appropriate, including

referral to appropriate bar associations or other disciplinary bodies

and restricting the individual's practice before GAO.

Sec. 21.5 Protest issues not for consideration.

GAO shall summarily dismiss a protest or specific protest

allegations that do not state a valid basis for protest, are untimely

(unless considered pursuant to Sec. 21.2(c)), or are not properly

before GAO. A protest or specific protest allegations may be dismissed

any time sufficient information is obtained by GAO warranting

dismissal. Where an entire protest is dismissed, no agency report shall

be filed; where specific protest allegations are dismissed, an agency

report shall be filed on the remaining allegations. Among the protest

bases which shall be dismissed are the following:

(a) Contract administration. The administration of an existing

contract is within the discretion of the contracting agency. Disputes

between a contractor and the agency are resolved pursuant to the

disputes clause of the contract and the Contract Disputes Act of 1978.

41 U.S.C. 601-613.

(b) Small Business Administration issues.--(1) Small business size

standards and standard industrial classification. Challenges of

established size standards or the size status of particular firms, and

challenges of the selected standard industrial classification may be

reviewed solely by the Small Business Administration. 15 U.S.C.

637(b)(6).

(2) Small Business Certificate of Competency Program. Any referral

made to the Small Business Administration pursuant to sec. 8(b)(7) of

the Small Business Act, or any issuance of, or refusal to issue, a

certificate of competency under that section will not be reviewed by

GAO absent a showing of possible bad faith on the part of government

officials or a failure to consider vital information bearing on the

firm's responsibility. 15 U.S.C. 637(b)(7).

(3) Procurements under sec. 8(a) of the Small Business Act. Under

that section, since contracts are entered into with the Small Business

Administration at the contracting officer's discretion and on such

terms as are agreed upon by the procuring agency and the Small Business

Administration, the decision to place or not to place a procurement

under the 8(a) program is not subject to review absent a showing of

possible bad faith on the part of government officials or that

regulations may have been violated. 15 U.S.C. 637(a).

(c) Affirmative determination of responsibility by the contracting

officer. Because the determination that a bidder or offeror is capable

of performing a contract is based in large measure on subjective

judgments which generally are not readily susceptible of reasoned

review, an affirmative determination of responsibility will not be

reviewed absent a showing of possible bad faith on the part of

government officials or that definitive responsibility criteria in the

solicitation were not met.

(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, Pub. L. 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.

(e) Protests not filed either in GAO or the contracting agency

within the time limits set forth in Sec. 21.2.

(f) Protests which lack a detailed statement of the legal and

factual grounds of protest as required by Sec. 21.1(c)(4), or which

fail to clearly state legally sufficient grounds of protest as required

by Sec. 21.1(f).

(g) Procurements by agencies other than Federal agencies as defined

by sec. 3 of the Federal Property and Administrative Services Act of

1949, 40 U.S.C. 472. Protests of procurements or proposed procurements

by agencies such as the U.S. Postal Service, the Federal Deposit

Insurance Corporation, and nonappropriated fund activities are beyond

GAO's bid protest jurisdiction as established in 31 U.S.C. 3551-3556.

(h) Subcontract protests. GAO will not consider a protest of the

award or proposed award of a subcontract except where the agency

awarding the prime contract has requested in writing that subcontract

protests be decided pursuant to Sec. 21.13.

Sec. 21.6 Withholding of award and suspension of contract performance.

Where a protest is filed with GAO, the contracting agency may be

required to withhold award and to suspend contract performance. The

requirements for the withholding of award and the suspension of

contract performance are set forth in 31 U.S.C. 3553 (c) and (d).

Sec. 21.7 Hearings.

(a) At the request of a party or on its own initiative, GAO may

conduct a hearing in connection with a protest. The request shall set

forth the reasons why a hearing is needed.

(b) Prior to the hearing, GAO may hold a pre-hearing conference to

discuss and resolve matters such as the procedures to be followed, the

issues to be considered, and the witnesses who will testify.

(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.

(d) All parties participating in the protest shall be invited to

attend the hearing. Others may be permitted to

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attend as observers and may participate as allowed by GAO's hearing

official. In order to prevent the improper disclosure of protected

information at the hearing, GAO's hearing official may restrict

attendance during all or part of the proceeding.

(e) Hearings shall normally be recorded and/or transcribed. If a

recording and/or transcript is made, any party may obtain copies at its

own expense.

(f) If a witness whose attendance has been requested by GAO fails

to attend the hearing or fails to answer a relevant question, GAO may

draw an inference unfavorable to the party for whom the witness would

have testified.

(g) If a hearing is held, no separate comments on the agency report

should be submitted unless specifically requested by GAO. Each party

shall file with GAO, within 5 days after the hearing was held or as

specified by GAO, a single document expressing any comments on both the

hearing and agency report, with copies furnished to the other parties.

By the due date, if the protester has not filed comments or a written

statement requesting that the case be decided on the existing record,

GAO shall dismiss the protest.

(h) In post-hearing comments, the parties should reference all

testimony and admissions in the hearing record that they consider

relevant, providing specific citations to the testimony and admissions

referenced.

Sec. 21.8 Remedies.

(a) If GAO determines that a solicitation, cancellation of a

solicitation, termination of a contract, proposed award, or award does

not comply with statute or regulation, it shall recommend that the

contracting agency implement any combination of the following remedies:

(1) Refrain from exercising options under the contract;

(2) Terminate the contract;

(3) Recompete the contract;

(4) Issue a new solicitation;

(5) Award a contract consistent with statute and regulation; or

(6) Such other recommendation(s) as GAO determines necessary to

promote compliance.

(b) In determining the appropriate recommendation(s), GAO shall,

except as specified in paragraph (c) of this section, consider all

circumstances surrounding the procurement or proposed procurement

including the seriousness of the procurement deficiency, the degree of

prejudice to other parties or to the integrity of the competitive

procurement system, the good faith of the parties, the extent of

performance, the cost to the government, the urgency of the

procurement, and the impact of the recommendation(s) on the contracting

agency's mission.

(c) If the head of the procuring activity determines that

performance of the contract notwithstanding a pending protest is in the

government's best interest, GAO shall make its recommendation(s) under

paragraph (a) of this section without regard to any cost or disruption

from terminating, recompeting, or reawarding the contract.

(d) If GAO determines that a solicitation, proposed award, or award

does not comply with statute or regulation, it may recommend that the

contracting agency pay the protester the costs of:

(1) Filing and pursuing the protest, including attorneys' fees and

consultant and expert witness fees; and

(2) Bid and proposal preparation.

(e) If the contracting agency decides to take corrective action in

response to a protest, GAO may recommend that the agency pay the

protester the costs of filing and pursuing the protest, including

attorneys' fees and consultant and expert witness fees. The protester

shall file any request that GAO recommend that costs be paid within 15

days after being advised that the contracting agency has decided to

take corrective action. The protester shall furnish a copy of its

request to the contracting agency, which may file a response within 15

days after receipt of the request, with a copy furnished to the

protester.

(f)(1) If GAO recommends that the contracting agency pay the

protester the costs of filing and pursuing the protest and/or of bid or

proposal preparation, the protester and the agency shall attempt to

reach agreement on the amount of costs. The protester shall file its

claim for costs, detailing and certifying the time expended and costs

incurred, with the contracting agency within 90 days after receipt of

GAO's recommendation that the agency pay the protester its costs.

Failure to file the claim within that time may result in forfeiture of

the protester's right to recover its costs.

(2) The contracting agency shall issue a decision on the claim for

costs as soon as practicable after the claim is filed. If the protester

and the contracting agency cannot reach agreement within a reasonable

time, GAO may, upon request of the protester, recommend the amount of

costs the agency should pay in accordance with 31 U.S.C. 3554(c). In

such cases, GAO may also recommend that the contracting agency pay the

protester the costs of pursuing the claim for costs before GAO.

(3) The contracting agency shall notify GAO within 60 days after

GAO recommends the amount of costs the agency should pay the protester

of the action taken by the agency in response to the recommendation.

Sec. 21.9 Time for decision by GAO.

(a) GAO shall issue a decision on a protest within 100 days after

it is filed.

(b) In protests where GAO uses the express option procedures in

Sec. 21.10, GAO shall issue a decision on a protest within 65 days

after it is filed.

(c) GAO, to the maximum extent practicable, shall resolve a timely

supplemental protest adding one or more new grounds to an existing

protest, or an amended protest, within the time limit established in

paragraph (a) of this section for decision on the initial protest. If a

supplemental or an amended protest cannot be resolved within that time

limit, GAO may resolve the supplemental or amended protest using the

express option procedures in Sec. 21.10.

Sec. 21.10 Express options, flexible alternative procedures,

accelerated schedules, summary decisions, and status conferences.

(a) At the request of a party or on its own initiative, GAO may

decide a protest using an express option.

(b) The express option will be adopted at the discretion of GAO and

only in those cases suitable for resolution within 65 days.

(c) Requests for the express option shall be in writing and

received in GAO no later than 5 days after the protest or supplemental

protest is filed. GAO will promptly notify the parties whether the case

will be handled using the express option.

(d) When the express option is used, the following schedule applies

instead of those deadlines in Sec. 21.3 and Sec. 21.7:

(1) The contracting agency shall file a complete report with GAO

and the parties within 20 days after it receives notice from GAO that

the express option will be used.

(2) Comments on the agency report shall be filed with GAO and the

other parties within 5 days after receipt of the report.

(3) If a hearing is held, no separate comments on the agency report

under paragraph (d)(2) of this section should be submitted unless

specifically requested by GAO. Consolidated comments on the agency

report and hearing shall be filed within 5 days after the hearing was

held or as specified by GAO.

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(4) Where circumstances demonstrate that a case is no longer

suitable for resolution using the express option, GAO shall establish a

new schedule for submissions by the parties.

(e) GAO may use flexible alternative procedures to promptly and

fairly resolve a protest, including establishing an accelerated

schedule and/or issuing a summary decision.

(f) GAO may conduct status conferences by telephone or in person

with all parties participating in a protest to promote the expeditious

development and resolution of the protest.

Sec. 21.11 Effect of judicial proceedings.

(a) A protester must immediately advise GAO of any court proceeding

which involves the subject matter of a pending protest and must file

with GAO copies of all relevant court documents.

(b) GAO will dismiss any protest where the matter involved is the

subject of litigation before a court of competent jurisdiction, or

where the matter involved 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.

Sec. 21.12 Distribution of decisions.

(a) Unless it contains protected information, a copy of a decision

shall be provided to the protester, any intervenors, the head of the

contracting activity responsible for the protested procurement, and the

senior procurement executive of each Federal agency involved; a copy

shall also be made available to the public. A copy of a decision

containing protected information shall be provided only to the

contracting agency and to individuals admitted to any protective order

issued in the protest. A public version omitting the protected

information shall be prepared wherever possible.

(b) Decisions are available from GAO by electronic means.

Sec. 21.13 Nonstatutory protests.

(a) GAO will consider protests concerning awards of subcontracts by

or for a Federal agency, sales by a Federal agency, or procurements by

agencies of the government other than Federal agencies as defined in

Sec. 21.0(c) if the agency involved has agreed in writing to have

protests decided by GAO.

(b) The provisions of this part shall apply to nonstatutory

protests except for the provision of Sec. 21.8(d) pertaining to

recommendations for the payment of costs. The provision for the

withholding of award and the suspension of contract performance, 31

U.S.C. 3553 (c) and (d), also does not apply to nonstatutory protests.

Sec. 21.14 Request for reconsideration.

(a) The protester, any intervenor, and any Federal agency involved

in the protest may request reconsideration of a bid protest decision.

GAO will not consider a request for reconsideration that does not

contain a detailed statement of the factual and legal grounds upon

which reversal or modification is deemed warranted, specifying any

errors of law made or information not previously considered.

(b) A request for reconsideration of a bid protest decision shall

be filed, with copies to the parties who participated in the protest,

not later than 10 days after the basis for reconsideration is known or

should have been known, whichever is earlier.

(c) GAO will summarily dismiss any request for reconsideration that

fails to state a valid basis for reconsideration or is untimely. The

filing of a request for reconsideration does not require the

withholding of award and the suspension of contract performance under

31 U.S.C. 3553 (c) and (d).

Robert P. Murphy,

General Counsel.

[FR Doc. 96-10831 Filed 4-30-96; 8:45 am]

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