House and Senate Strike Deal on Bid Protest Reforms in FY 2018 NDAA
Earlier this year, the U.S. Senate and House of Representatives passed different versions of the National Defense Authorization Act for Fiscal Year 2018 (“FY 2018 NDAA”). The Senate version contained dramatic bid protest reforms that, with the exception of the reforms to debriefing, were largely unpopular in the government contracting community. The House version did not contain these reforms. After meeting in conference over the past month to iron out the differences between the two bills, on Nov. 8, 2017, the House and Senate Armed Services Committees announced an agreement had been reached. Contractors can breathe a sigh of relief, as most (if not all) of the protest reforms that the contracting community viewed negatively were left out of the bill agreed to in conference.
Section 818 of the agreed bill contains major reforms to the post-award debriefing process (though limited to DoD procurements), which should be beneficial to both contractors and the government.
In addition, Section 827 of the agreed bill calls for the Department of Defense (“DoD”) to conduct a pilot program to determine the effectiveness of requiring very large contractors to reimburse the DoD for costs incurred in processing a GAO that is denied in its entirety. While some contractors may view this pilot program negatively, it will only impact a minority of protesters and it is likely to have only a minimal impact on the decision making process of those protesters that would qualify for the pilot program.
Below is a summary of the changes between the version of the bill passed by the Senate, and the version agreed to by the Senate/House Conference Committee.
Summary of Changes Between Senate Bill and Agreed Bill
|Topic||Senate Version (Sept. 2017)||Version Agreed to by Senate/House Conference Committee (Nov, 2017)|
|Post-Award Debriefings for DoD Procurements — Content & Entitlement||
All mandatory post-award debriefings must provide details and comprehensive statements of the agency’s rating for each evaluation criterion and of the agency’s overall award decision. The agency would be encouraged to release all information that otherwise would be releasable in the course of a bid protest challenge to an award.
A requirement for disclosure of the agency’s written source selection award determination, redacted if necessary to protect other offerors’ confidential and proprietary information.
A requirement to provide a combined written and oral debriefing for all contract awards and task or delivery orders valued at +$10M.
At the option of an offeros, the agency would be required to provide the offeror (or where more appropriate, the offeror’s outside counsel or other appropriate outside representative) access to an unredacted copy of the source selection award determination and the supporting agency record for all contract awards and task or delivery orders valued at +$10M.
Both the winning and losing offerors would be entitled to a debriefing.
All “required” post-award debriefings, while protecting the confidential and proprietary information of other offerors, shall include, at a minimum, the agency’s written source selection award determination, redacted to protect the confidential and proprietary information of other offerors if (1) the contract award exceeds $100M, or (2) the contract award exceeds $10M and the contractor requesting the debriefing is a small business or nontraditional contractor who request such disclosure
A requirement for a written or oral debriefing for all contract awards and task or delivery orders valued at $10M or higher.
Both the winning and losing offerors would be entitled to a debriefing.
|Post-Award Debriefings for DoD Procurements — Follow-Up Questions & Protest/Stay Timing||
Disappointed offeror would be allowed the opportunity for follow-up questions within two business days of receiving a post-award debriefing to be answered in writing by the agency within five business days.
The debriefing would not be considered concluded, and the five day post-debriefing period pertaining to when a protest needs to be filed to invoke a CICA stay, would not commence until the day the agency delivers its written responses to the disappointed offeror.
|Disappointed offeror would be allowed the opportunity for follow-up questions within two business days of receiving a post-award debriefing to be answered in writing by the agency within five business days. The debriefing would not be considered concluded, and the five day post-debriefing period pertaining to when a protest needs to be filed to invoke a CICA stay, would not commence until the day the agency delivers its written responses to the disappointed offeror.|
|GAO Protests – Protest Pays Government’s Costs for Denied Protests of DoD Procurements||Contractors, with +$100M in revenue in the previous year, that file a protest at GAO on a DoD procurement shall pay DoD’s costs incurred for processing the protest if all elements of the protest are denied in an opinion issued by GAO.||
DoD is required to carry out a three-year pilot program (which would not start until late-2019) to determine the effectiveness of requiring contractors to reimburse the DoD for costs incurred in processing GAO protests that are denied by GAO in their entirety.
The triggering contractor revenue threshold is increased from $100M to $250M.
|GAO Protests – Incumbent Contractor Profits Withheld||
Contractors that file a protest on a contract on which they are the incumbent contractor shall have all payments above incurred costs withheld on any bridge contracts or temporary contract extensions awarded to the contractor as a result of a delay in award resulting from the filing of such protest.
The protesting contractor would not receive the withheld payments unless the protested procurement was canceled or GAO issued an opinion sustaining (otherwise withheld payments would go to the government or the awardee).
Would apply to all protests at GAO, regardless of agency or contractor size.
|Eliminated from the agreed bill.|
|GAO Protests – 65 Day Deadline for Deciding Protest of DoD Procurements||Requiring GAO to decide protests concerning DoD procurements within 65 days after the date the protest is submitted (reduced from the current 100 day deadline), unless the protest contained “unusually complex issues or large agency records.”||Eliminated from the agreed bill.|
Since both the Senate and House will need to vote again on the agreed bill, there is some question as to whether the agreed bill will pass Congress — though the chances of passage at this point appear to be high.
Assuming it does pass, a revision to the DFARS will be required to effectuate the majority of changes to the debriefing process. It may still be another six months before a final rule would be published, and the agreed bill does leave some wiggle room on how the DoD might effectuate some of the changes to the debriefing process. Namely, how will small business opt-in to receiving a redacted copy of the written source selection decision work?
Also, unclear is the language in Section 818(a)(2) of the agreed bill:
the Secretary of Defense shall revise the [DFARS] to require that all required post-award debriefings … include, at a minimum … A requirement for a written or oral debriefing for all contract awards and task or delivery orders valued at $10,000,000 or higher.
All required post-award debriefings require a debriefing if the contract award is over $10M? Huh? Hopefully Congress clarified this matter, or clarity is provided in the DFARS revisions.
It will also be interesting to see how DoD implements the pilot program ordered in Section 827. How will DoD decide which contractors who qualify for the program will be subjected to the program (certainly no contractor is going to opt in)? How exactly will previous year revenue be measured?
The biggest concern with the reforms in the agreed bill is that they only apply to DoD procurements. As a result, there will be a different debriefing process (and likewise timing for GAO protests) for DoD and civilian agency procurements. It is hard imagine why debriefing (and related protest) procedures should be any different for DoD and civilian agency procurements. Will Congress will see fit to make these same changes apply to civilian agency procurements in the near future?
If you’d like to learn more about how these changes will impact federal contractors, and much more, please join us this Thursday for Federal Government Contracts: How to Navigate in the New Administration – Seminar/Webinar – Nov. 16, 2017. To help you navigate the rough seas of doing business with the federal government in this new administration, we have assembled nationally recognized practitioners who will cover a variety of topics relevant to government contractors across all industries.