New protest venue promises seasoned bid dispute reviews

Congress giveth, and Congress taketh away.

The Information Technology Management Reform Act swept away the bid protest
jurisdiction of the General Services Administration Board of Contract Appeals. But in
another law, Congress granted complete bid protest jurisdiction to a federal court, the
Court of Federal Claims. This court has great promise as an expert and independent forum
in which to air concerns about the bidding process.

The Court of Federal Claims already spends about one-third its time on government
contract cases, but these are appeals under the Contract Disputes Act. It previously had
extremely limited bid protest jurisdiction, which applied only to cases filed before
award. It resulted in less than a dozen decided cases each year.

The good news for all concerned is that the judges of this court have significant
exposure to, and experience in, the intricacies of federal contract law. Indeed, that is
probably why they gained their new power to review all bid protest suits.

The same law ends the current bid protest jurisdiction of the U.S. district courts
after four years. District court judges are generalists and are unlikely to know much
about CICA (the Competition in Contracting Act), the FAR (the Federal Acquisition
Regulation), the DFAR (the Defense Federal Acquisition Regulations) and the rest of the
contracting acronym land. At least the judges at the Court of Federal Claims speak our

The prospect of a court suit has some major advantages over litigating a bid protest at
the General Accounting Office. The court is not bound by GAO's extremely short and
excessively strict time limits, although a plaintiff seeking to enjoin contract award or
performance must act promptly.

A stay in contract performance is automatic under some circumstances when a protest is
filed at GAO, but an agency can override it with a written finding. A court injunction,
although it is not granted simply upon request, binds the agency.

Ascertaining the facts is usually crucial to success in a bid protest. The government
must file an "administrative record" with the court in a protest case, and this
is likely to be just as extensive as the report it would file at GAO. But where the
written record is inadequate (or certain other exceptions apply), the court can permit
depositions and other forms of discovery not available at GAO. Sometimes the facts are
disputed even after all the documents are disclosed. Then, oral testimony is necessary.
Both GAO and the Court of Federal Claims hold hearings where testimony under oath is
adduced. Court hearings will reach every contested issue, but GAO tends to limit its
hearings to specific narrow issues. Furthermore, the court has nationwide subpoena power
to compel the attendance of reluctant witnesses.

In the area of relief, there are pros and cons. Because it is a creature of the
legislative branch, GAO can only recommend a remedy not order one. Because agencies that
fail to take this recommendation must report themselves to Congress, most implement GAO's

But there are usually one or two mavericks each year who opt to disregard a protest
defeat and take the congressional heat. The Court of Federal Claims can award the same
type of relief as GAO. Federal agencies are not, however, known to ignore court orders.

The one area where GAO affords more complete relief is protest costs. GAO routinely
awards them to the prevailing protester. The Court of Federal Claims can do so only under
very limited circumstances-when a small business prevails in a case where the government's
position is not "substantially justified," and then only up to $125 per hour.
And a glitch in the new law makes even that limited power open to question.

All in all, the Court of Federal Claims looks like an effective and independent
judicial protest forum. And, until bureaucrats become incorruptible and infallible, the
procurement system needs one.

Joseph J. Petrillo is a lawyer with the Washington firm of Petrillo & Associates.
William E. Conner, an associate with the firm, contributed to this column.


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