Federal Contract Law: GAO plans protest rule revisions'it's about time

GAO plans protest rule revisions'it's about time

Joseph J. Petrillo

The General Accounting Office has announced its intention to revise the rules on bid protests. GAO, which has been deciding protests for about 70 years, received statutory sanction back in 1984, with the Competition in Contracting Act.

The notice announcing the proposed rules mentioned four areas that GAO is considering revamping.

One proposal calls for a change to the standard of review for affirmative determinations of responsibility. This is when a protester objects to a procuring agency's decision that a winning contractor is a responsible company'a required condition for a government contract.

GAO's model had been a U.S. Court of Claims ruling governing claims for recovery of bid preparation costs.

Because a determination of responsibility was based on hard-to-review subjective judgments, GAO's rules stated that a protest on this ground had to show 'possible bad faith on the part of government officials.'

GAO also recognized exceptional situations in which the protest was over 'definitive responsibility criteria' in the solicitation. These criteria were often quantified, so GAO could easily determine whether the awardee met the prescribed test.

But a 1996 law ended District Court jurisdiction over bid protests and changed the review standard. That law made it clear that the standards of the Administrative Procedure Act applied to bid protest litigation.

In a ruling last year, the Federal Circuit held that these standards applied to all aspects of bid protests, including affirmative determinations of responsibility. The upshot? In the future, the test will be whether the affirmative decision was arbitrary and capricious, not whether it showed bad faith.

Proving bad faith on the part of government officials is virtually impossible. Meeting the 'arbitrary and capricious' standard is merely difficult.

GAO's second area for change concerns its successful alternative dispute resolution program, which its rules don't even mention. They should.

Third, GAO wants to reconsider the rule allowing losing bidders to postpone filing protests until after they have been debriefed, if a debriefing is required. This rule has had the unintended consequence of delaying protests of certain pre-award matters. As an example, the notice cites a hypothetical violation of the Procurement Integrity Act. GAO would prefer to have such issues raised before award.

Finally, GAO wants its rules to recognize the reality that most protests are filed by fax. In fact, after Sept. 11, GAO won't even accept hand-delivered protest packages at its Jersey-barrier-clad building. It can do much more to implement electronic filing, which is obviously the wave of the future.

The notice invites other suggestions for changes. I vote for GAO to reform its rules barring consolidation of multiple protests of the same procurement. No other judicial or administrative forum I know of uses GAO's current whimsical practice of keeping protests separate but often issuing a single decision. Why?

Joseph J. Petrillo is an attorney with the Washington law firm of Petrillo & Powell. E-mail him at jp@petrillopowell.com.

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