More rights for contractors under new task and delivery order provisions

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Key provisions of the fiscal 2008 National Defense Authorization Act, which took effect May 27, enhance the rights of federal government contractors under multiple-award, indefinite-delivery, indefinite-quantity contracts. The new provisions add rigor and transparency to the procurement of task and delivery orders of more than $5 million. For task and delivery orders of more than $10 million, the new provisions afford disappointed bidders their first right to protest those awards to the Government Accountability Office since the passage of the Federal Acquisition Streamlining Act (FASA) of 1994.

Enhanced competition for orders valued over $5 million

Contractors have new rights to receive additional information during the competition and after the award of task or delivery orders of more than $5 million. Under FASA, multiple-award contract holders generally are entitled only to "a fair opportunity to be considered" for each order.

The new enhanced competition rules for orders of more than $5 million require that all IDIQ contract holders receive:

  • A notice and clear statement of the agency's requirements for the task or delivery order.
  • A reasonable period of time to provide a proposal in response to the notice.
  • The relative weight of significant factors and subfactors the agency expects to consider in making an award
  • A written statement documenting the basis for the award.
  • A post-award debriefing.

These new requirements will make task and delivery order procurements for orders of more than $5 million look more like Federal Acquisition Regulation Part 15 acquisitions.

Protests of orders worth more than $10 million

The new law also allows IDIQ contractors to protest a task or delivery order worth more than $10 million to GAO.

FASA severely limited the ability of a contractor to protest the award of a task or delivery order. Protests were permitted only when "the order increases the scope, period or maximum value of the contract under which the order is issued." GAO also ruled that it would hear protests of down-selections, in which an agency limits eligibility for future orders under a multiple-award IDIQ contract to only one contractor. The net result was that FASA barred the vast majority of challenges to task or delivery orders. The new rules will expose larger task- and delivery-order awards to outside scrutiny for the first time.

However, GAO's new bid protest jurisdiction raises some issues. One is the impact on agencies' internal processes for resolving disputed task- or delivery-order awards. FASA allowed disappointed bidders to complain to an agency's task- and delivery-order ombudsman, an infrequently used process akin to the agency-level bid protest. The new threat of GAO review should cause agencies to assess the efficacy of their ombudsman review process and its attractiveness as an alternative to filing at GAO.

The new law also raises questions regarding the timeliness and effect of protests at GAO. The essence of the issue is whether these task order awards will be treated in the same manner as FAR Part 15 contract awards for protest purposes. Following a FAR Part 15 contract award, the debriefing becomes the trigger for a timely protest and for securing a stay of performance under the Competition in Contracting Act's automatic stay provision. These rules should apply to task and delivery order protests, too, but the law does not clearly spell this out.

Congress' changes to the task- and delivery-order award process represent a modest step away from the streamlining goal of FASA but a step forward in improving procurement decision-making and assuring fairer treatment for contractors. GAO's new bid protest authority also expires in three years, so this debate is far from over.

John Jensen is a partner in the Government Contracts practice at Pillsbury Winthrop Shaw Pittman LLP. Senior associate Daniel Herzfeld contributed to this article.

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