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

SUMMARY: The General Accounting Office (GAO) is amending its Bid

Protest Regulations after receiving and considering the comments on the

advance notice of proposed rulemaking published on February 21, 1996,

and the proposed rule published on May 1, 1996. The final rule

implements 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 final rule will facilitate

GAO's meeting the new statutory deadline for issuing bid protest

decisions and will enhance the efficiency and effectiveness of the bid

protest process at GAO.

EFFECTIVE DATE: August 8, 1996.

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

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

SUPPLEMENTARY INFORMATION:

Effective Dates

Protests filed at GAO prior to the effective date of this final

rule will be considered under the previous rule published at 60 FR

40737 on August 10, 1995. That previous rule will also apply to (1)

protests filed on or after the effective date of this rule which

supplement or amend a protest filed at GAO prior to the effective date

of this rule and (2) claims and requests for reconsideration filed on

or after the effective date of this rule which concern a protest which

was considered under the previous rule.

Background

On February 21, 1996, GAO published an advance notice of proposed

rulemaking (61 FR 6579) soliciting comments on how its bid protest

procedures could be revised to facilitate GAO's meeting, effective

August 8, 1996, the new 100-calendar-day statutory deadline (which

shortens the former 125-calendar-day deadline) for issuing bid protest

decisions, as required by the National Defense Authorization Act for

Fiscal Year 1996, Pub. L. 104-106, 110 Stat. 186, enacted on February

10, 1996. (Further reference to ``days'' means calendar days.) GAO

invited comments addressing changing GAO's longstanding timeliness

rules to link the timely filing of a protest with a statutorily

required debriefing and on facilitating the expeditious resolution of

protests through the use of early document production. In addition, GAO

invited suggestions concerning the appropriate length of regulatorily

imposed deadlines and the use of accelerated or alternative procedures

to more expeditiously resolve bid protests.

In preparing the proposed rule, published on May 1, 1996 (61 FR

19205), GAO considered the written comments received in response to the

advance notice. These comments generally recognized our previous

efforts, as reflected in the final rule published on August 10, 1995

(60 FR 40737) and effective October 1, 1995, to streamline the bid

protest process at GAO and to provide meaningful relief to vendors

wrongfully harmed during the conduct of a procurement. The commenters

also suggested ways in which the internal management of GAO's bid

protest process could be enhanced.

Summary of Comments

Interested persons were invited to submit comments on GAO's

proposed rule by July 1, 1996. We received written comments from 13

Federal agencies, 2 bar associations, 2 industry associations, and 1

law firm. In adopting this final rule, we have carefully considered all

comments received. The commenters generally acknowledged GAO's efforts

to shorten regulatorily imposed deadlines in order to streamline and

expedite the bid protest process to meet the 100-day deadline for

issuing bid protest decisions and to help implement congressional

intent to shorten the length of the procurement cycle.

GAO has also enhanced ongoing internal initiatives to facilitate

the proactive management of cases and to accelerate the development and

resolution of bid protests. For example, we have adopted procedures to

simultaneously issue acknowledgment notices and protective orders in

appropriate cases; to identify shortly after a protest is filed those

cases in which a hearing appears likely to be appropriate; to encourage

the use of accelerated schedules, in lieu of invoking the express

option; to promote the expeditious resolution of summary dismissal

requests; and to encourage the use of status and other conferences. We

believe that regulatorily imposed improvements combined with proactive

management of cases will enable GAO to routinely issue a fully

developed decision resolving all issues raised in a protest within the

100-day deadline so that the protest does not unnecessarily delay the

procurement cycle.

A discussion of the more significant comments concerning GAO's

proposed rule, and our responses to these comments, are set forth

below.

Section 21.0--Definitions

Several commenters supported our proposal to prescribe procedures

for the uniform computation of ``days'' for all periods, including bid

protest filing periods and stay periods. In the proposed rule, we added

language to paragraph (e) of Sec. 21.0 which provides that in computing

any period of time described in Subchapter V, Chapter 35 of Title 31,

United States Code, the day from which the period begins to run will

not be counted, and that when the last day of the period falls on a

Saturday, Sunday, or Federal holiday, the period will extend to the

next day that is not a Saturday, Sunday, or Federal holiday. GAO adopts

the language as proposed. We believe that periods of time in the bid

protest system should be uniformly counted.

Section 21.1--Filing a Protest

To ensure that protesters focus their document and hearing

requests, in the proposed rule we added language to Sec. 21.1(d)(2)

which makes clear that when a protester makes a document request, the

protester must also explain

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why the documents requested are relevant to the protest. The proposed

language was supported by the commenters, and is adopted as proposed.

We believe this requirement will assist GAO and the parties to identify

those documents which are material to the disposition of the protest.

Similarly, we added language in the proposed rule to

Sec. 21.1(d)(3) which makes clear that when a protester requests a

hearing, the protester must also provide an explanation of why it

believes a hearing is necessary to resolve the protest. The proposed

language was supported by the commenters, and is adopted as proposed.

We think this requirement will assist GAO and the parties to identify

early in the protest process those cases in which a hearing appears to

be appropriate.

In response to a commenter's suggestion, we have added language to

paragraph (g) of Sec. 21.1 which makes clear the requirement that a

protester file the redacted copy of its protest with GAO and the agency

within 1 day after it files its unredacted protest with GAO. The

requirement ensures that an agency can expeditiously provide the

redacted copy of the protest to any intervenors.

Section 21.2--Time for Filing

We received numerous comments concerning the language in paragraph

(a)(2) of Sec. 21.2 in the proposed rule linking the timely filing of a

protest with a statutorily required debriefing, that is, a debriefing

which is ``requested and, when requested, is required.'' In the

proposed rule, we expressly linked our timeliness rule to the statutory

debriefing and stay provision of the Federal Acquisition Streamlining

Act of 1994 (FASA), Pub. L. 103-355, 108 Stat. 3243, enacted on October

13, 1994. As explained, we believed such linkage would be consistent

with congressional intent that a vendor receive a statutorily required

debriefing before deciding whether or not to file a protest. The

proposed linkage would have provided a uniform rule and practice--by

filing a protest within 5 days of a statutorily required debriefing, a

protest would be timely for bid protest purposes and the protester

would be entitled to a stay.

The commenters were generally receptive to the linkage concept, but

suggested various ways to clarify the proposed language. After

considering all of these proposals, we have replaced the proposed

language with the following language: ``Protests other than those

covered by paragraph (a)(1) of this section shall be filed not later

than 10 days after the basis of protest is known or should have been

known (whichever is earlier), with the exception of protests

challenging a procurement conducted on the basis of competitive

proposals under which a debriefing is requested and, when requested, is

required. In such cases, with respect to any protest basis which is

known or should have been known either before or as a result of the

debriefing, the initial protest shall not be filed before the

debriefing date offered to the protester, but shall be filed not later

than 10 days after the date on which the debriefing is held.''

This provision leaves intact GAO's longstanding timeliness rule

that protests challenging an award made using sealed bidding

procedures, protests raising supplemental/amended issues, and protests

based on information which was independently obtained after a

statutorily required debriefing must be filed within 10 days (formerly

14 days) after the basis of protest is known or should have been known,

whichever is earlier. In the final rule, we have adopted 10 days (not 5

days as proposed) as the basis for calculating most protest (and other)

filing periods consistent with the goal of making our bid protest

process as simple and straightforward as possible.

In procurements conducted on the basis of competitive proposals in

which a statutorily required debriefing is held, that is, where a

debriefing is requested and, when requested, is required, a protester

will always have up to 10 days after the debriefing to file its initial

protest.

In adopting the 10-day timeliness rule, we recognize the concerns

of those commenters who point out that shortening in any circumstances

GAO's requirement for a timely filed protest from the former 14 days to

the proposed 5 days would seriously diminish access to potential

protesters who are accustomed to working with the 14-day requirement.

At the same time, we recognize other commenters' legitimate concerns

that the protest cycle be as short as feasible and, in the era of

facsimile transmissions and express delivery services, 14 days is a

disproportionately long period of time to allow vendors to file a

protest. We think the 10-day timeliness rule adopted in this final rule

strikes the appropriate balance between the comments that potential

protesters should have time to prepare and file a well-considered

protest, and other comments that the addition of a full 2-week period

to the overall 100-day bid protest period is not consistent with the

congressional goal of an expeditious bid protest system.

Moreover, to address concerns regarding strategic or defensive

protests, and to encourage early and meaningful debriefings, GAO

provides in paragraph (a)(2) of Sec. 21.2 that protesters shall not

file an initial protest prior to the debriefing date offered to the

protester, but must file the initial protest not later than 10 days

after the date on which the debriefing is held. In order to administer

this rule, our Office may close a file without prejudice on any protest

which has been filed before a statutorily required debriefing, upon

appropriate notice by an agency that the statutorily required

debriefing date has been offered. We anticipate that this debriefing

will normally occur on the first date offered by the agency. However,

in the event that the agency subsequently agrees to another date, the

debriefing held on that date will be used as the basis for determining

the timeliness of the protest. While we recognize that this places a

potential burden on an agency's procurement cycle time, the agency has

within its control the ability to minimize this period by offering

early and meaningful debriefings consistent with congressional intent.

The adoption of a uniform 10-day timeliness rule provides for easy

calculation of protest filing periods and substantially maintains the

basic timeliness rule which has been in effect at GAO since 1975. This

10-day rule reflects a compromise which balances the legitimate

competing interests and concerns of all parties. Under this rule and

consistent with the statutory language in FASA, a protester may file a

timely protest on any issue within 5 days of a statutorily required

debriefing, as well as obtain a stay, thus eliminating the existing

anomaly that a protester may be eligible for a stay based on a filing

which does not constitute a timely protest. However, potential

protesters should be aware that, even after this compromise (and as is

currently also the case), a protester's initial filing may qualify as a

timely protest, but may not entitle the protester to a stay.

Nevertheless, a protester's opportunity to obtain meaningful review at

GAO will be maintained.

In paragraph (a)(3) of Sec. 21.2 in the proposed rule, we required

that any subsequent protest to our Office following a protester's

actual or constructive knowledge of initial adverse agency action on

its agency-level protest be filed within 5 days. While this 5-day

period was supported by several commenters, other commenters expressed

concern that this proposed filing period was too short and would not

provide protesters with sufficient time to consider an agency's

decision regarding the agency-level

[[Page 39041]]

protest and to decide whether to file a subsequent protest, which may

raise new issues, with GAO. We are adopting 10 days as the time period

for filing a subsequent protest with GAO following a protester's

knowledge of initial adverse agency action on its agency level protest

to help ensure that the protester's decision regarding the filing of

such a protest is well considered.

We have removed paragraph (a)(4) of Sec. 21.2 in the proposed rule

which required that supplemental or amended protests be filed within 5

days after the basis of protest is known or should have been known,

whichever is earlier. By removing the proposed language, we will

continue to require that supplemental or amended protests be filed in

accordance with the basic ``knew/should have known'' timeliness rule

which, as adopted in this final rule, is 10 days.

In addition, several commenters suggested that the time period for

filing supplemental or amended protests be aligned with the 10-day time

period for filing comments (the proposed language in paragraph (i) of

Sec. 21.3 is adopted) since we might consider arguments made in

comments to be new protest issues which would need to independently

satisfy GAO's timeliness rules. In light of this concern and consistent

with the desire to calculate protest and other filing periods in a

simple, straightforward manner, the time periods for filing

supplemental or amended protests and comments will be concurrent,

thereby achieving the ``bright line'' rule desired by the commenters.

Finally, a few commenters have expressed a concern that our

timeliness rules conflict with the 10-working-day timeliness

requirement contained in the North American Free Trade Agreement

(NAFTA). Since the effective date of NAFTA implementation, we have not

received a protest under the NAFTA rules. When NAFTA was implemented,

we consulted the United States Trade Representative who advised that

the minor inconsistency between NAFTA's and GAO's timeliness

requirements would not pose any problems. We are cognizant of the

inconsistency and believe that, because of the flexibility of our

timeliness rules, we will be able to afford a NAFTA protester all

treaty rights for purposes of the timely filing of a protest.

Section 21.3--Notice of Protest, Submission of Agency Report, and Time

for Filing of Comments on Report

Consistent with the requirement in the National Defense

Authorization Act for Fiscal Year 1996, GAO adopts the language as

proposed in paragraph (c) of Sec. 21.3 concerning the new 30-day time

period for filing the agency report (shortening the former 35-day

requirement) after telephone notice of the protest from GAO.

In response to suggestions from commenters that GAO encourage the

filing of relevant documents prior to the filing of the agency report,

GAO adopts the language as proposed in paragraph (c) of Sec. 21.3 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. As previously discussed in the final

rule at 60 FR 40737, 40738, we believe that in appropriate cases, an

agency's voluntary production of documents prior to the filing of its

agency report will facilitate the prompt resolution of the protest and

result in other system efficiencies.

In light of the shortened timeframe for resolving all protest

issues, GAO believes it is critical to resolve document disputes prior

to the filing of the agency report in order to avoid extending a

protester's comment period or affording a protester an opportunity to

file supplemental comments in response to the piecemeal release of

additional documents. For this reason, GAO adopts the language proposed

in paragraph (c) of Sec. 21.3 requiring that at least 5 days prior to

the filing of the agency report, in protests where specific documents

material to the disposition of the protest have been requested, 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 of those documents which the

agency intends to withhold from the protester and the reasons for the

proposed withholding. GAO believes this list will facilitate the

expeditious resolution of document disputes and ultimately the protest

itself. We decline to adopt the suggestion of some commenters that a

list be produced in all cases (including those cases where specific

documents have not been requested) because we believe such a

requirement would unduly burden the agencies without providing

corresponding benefits to the bid protest process.

Several commenters suggested that the proposed 1-day period for

filing objections with GAO and the other parties regarding the scope of

the agency's proposed disclosure/nondisclosure of documents after

receipt of the list should be at least 2 days. GAO adopts the

suggestion of these commenters by changing the language in paragraph

(c) of Sec. 21.3 making clear that any objection to the scope of the

agency's proposed disclosure/nondisclosure of documents be filed within

2 days after receipt of the list.

GAO adopts the proposed language, ``documents, or portions of

documents,'' throughout Sec. 21.3 which clarifies and reflects current

longstanding practice that parties need not provide entire documents if

only certain parts of the documents are relevant to the issues raised

in the protest.

One commenter expressed concern that agency reports for overseas

procurements often cannot be filed within the 30-day statutory period.

This difficulty is already provided for in redesignated paragraph (f)

of Sec. 21.3. (The proposed rule divided former paragraph (c) of

Sec. 21.3 into 2 parts, creating a new paragraph (d) in this section

and redesignating the subsequent paragraphs in this section.) In such

cases, consistent with current practice, an agency may request an

extension of time for filing the agency report. In response to another

commenter's concern, GAO has added language to paragraph (f) of

Sec. 21.3 to permit an agency to also request an extension of time to

file the list of documents proposed for disclosure/nondisclosure.

In redesignated paragraph (g) of Sec. 21.3, GAO adopts the proposed

language which requires agencies to respond to supplemental document

requests within 2 days after the protester requests additional

documents. This 2-day period is equivalent to the period given to the

protester to request additional documents after their existence or

relevance first becomes evident following receipt of the agency report

and places the parties on a level playing field regarding the

respective filing periods for supplemental documents.

Several commenters have expressed the view that it is inappropriate

after the filing of comments on the agency report or hearing for

agencies and other parties to file unsolicited responses to such

comments. GAO adopts the language proposed in redesignated paragraph

(j) of Sec. 21.3 which provides that such additional responses shall

not be submitted unless GAO specifically requests them or specifically

grants permission for their submission. This requirement will ensure

that the period of time for closing the protest record is not

unnecessarily extended. The requirement is not, however, intended to

foreclose the submission of additional information from an agency or

other

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parties when GAO believes that such input is appropriate.

Section 21.5--Protest Issues Not for Consideration

GAO adopts the language proposed in paragraph (d) of Sec. 21.5

concerning protests alleging a violation of subsection (a), (b), (c),

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

Act, 41 U.S.C. 423, as amended by sec. 4304 of the National Defense

Authorization Act for Fiscal Year 1996. The statute requires that

potential protesters notify the agency concerned of a possible

procurement integrity violation within 14 days of discovering the

alleged violation before protesting the matter to GAO. The statutory

requirement reflected in paragraph (d) of Sec. 21.5 will become

effective on January 1, 1997, unless the requirement is implemented by

OFPP by an earlier date. Pending OFPP's implementation of this

requirement and consistent with current practice, GAO will continue to

consider protests of alleged procurement integrity violations whether

or not the protester has notified the agency prior to filing its

protest.

Section 21.7--Hearings

Consistent with current practice, GAO adopts the language as

proposed in paragraph (c) of Sec. 21.7 which explicitly recognizes that

hearings may be conducted by telephone. In paragraph (g) of Sec. 21.7,

GAO adopts the language as proposed which reduces the time for filing

consolidated comments on the agency report and hearing from 7 days to 5

days after the hearing. In those circumstances where more time to file

consolidated comments is necessary, GAO retains the flexibility to

extend the comment period.

Section 21.8--Remedies

Several commenters have expressed concern that the 90-day timeframe

for filing claims is too long. In paragraph (f)(1) of Sec. 21.8, GAO

has shortened the time for filing claims to 60 days. This change in the

final rule will expedite the process for resolving claims and

ultimately closing the contract file in a particular matter.

Section 21.9--Time for Decision by GAO

In accordance with the statutory requirement in the National

Defense Authorization Act for Fiscal Year 1996, GAO adopts the language

as proposed in paragraph (a) of Sec. 21.9 that a decision on a protest

be issued within 100 days after a protest is filed (shortening the

former 125-day requirement).

Section 21.10--Express Options, Flexible Alternative Procedures,

Accelerated Schedules, Summary Decisions, and Status and Other

Conferences

Several commenters have recognized GAO's use of flexible

alternative procedures to resolve bid protests, deeming such procedures

particularly useful in light of the shortened statutory deadline for

issuing decisions. GAO adopts the language as proposed in paragraph (e)

of Sec. 21.10 which specifically references as examples the use of

accelerated schedules and/or the issuance of summary decisions as

flexible alternative procedures which have been and will continue to be

used by GAO to promptly and fairly resolve protests.

Further, GAO adopts the language proposed in the new paragraph (f)

of Sec. 21.10 which, reflecting current practice, expressly provides

for conducting telephone or in person status and other conferences with

all protest parties to promote the expeditious development and

resolution of the protest. We added language to paragraph (f) of

Sec. 21.10 to recognize that other types of informal conferences may

also be held. For example, GAO has used status and other conferences to

resolve protective order admission objections, document disputes, and

summary dismissal requests; to discuss issues related to hearings; and

to obtain answers to questions which are relevant and material to the

disposition of the protest. GAO has found that the use of status and

other conferences benefits all parties to a protest. While some

commenters suggested that we include in this final rule a specific time

for conducting such conferences, we decline to add such language in

order to retain the flexibility to conduct these conferences at any

time during the process, thereby tailoring the conferences to the

circumstances of a particular case.

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 amended 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.

21.9 Time for decision by GAO.

21.10 Express options, flexible alternative procedures, accelerated

schedules, summary decisions, and status and other 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

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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 reasons 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 not

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 a redacted copy of the protest

which omits the information with GAO and the agency within 1 day after

the filing of its protest with GAO.

(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) Protests other than those covered by paragraph (a)(1) of this

section shall be filed not later than 10 days after the basis of

protest is known or should have been known (whichever is earlier), with

the exception of protests challenging a procurement conducted on the

basis of competitive proposals under which a debriefing is requested

and, when requested, is required. In such cases, with respect to any

protest basis which is known or should have been known either before or

as a result of the debriefing, the initial protest shall not be filed

before the debriefing date offered to the protester, but shall be filed

not later than 10 days after the date on which the debriefing is held.

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

subsequent protest to GAO filed within 10 days of actual or

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 10-day period provided by this paragraph,

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

proposals.

(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

[[Page 39044]]

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. At least 5 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 of

the documents which the agency intends to withhold from the protester

and the reasons 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 2 days 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 contract 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 list of documents to be provided by the agency

pursuant to Sec. 21.3(c) or for the submission of the agency report.

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

(g) The protester may request additional documents after receipt of

the agency report 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 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 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.

[[Page 39045]]

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, 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. The provision in paragraph (d) of Sec. 21.5

will apply not later than January 1, 1997.

(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 to resolve the protest.

(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 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:

[[Page 39046]]

(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 60 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 a timely 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 and other

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 not later than 5 days after the protest or

supplemental/amended 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.

(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 and other 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

[[Page 39047]]

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. 96-19014 Filed 7-25-96; 8:45 am]

BILLING CODE 1610-01-P