GAO’s recent decision in HP Enterprise Services, LLC illustrates the challenges resulting from the recent changes to GAO’s task order protest jurisdiction. It also provides a useful overview of the current scope of GAO’s jurisdiction over such protests. HP Enterprise Services, LLC—Reconsideration, B-413382.3 (January 26, 2017).
Here is a bit of background on the recent jurisdictional changes that led to the decision. GAO lost its jurisdiction over protests of civilian task and delivery orders valued at over $10 million on September 30, 2016. This was the “sunset date” established in the 2008 National Defense Authorization Act. GAO’s jurisdiction over such protests for military agencies or departments, or for protests alleging increased scope, period, or maximum value of the underlying contract, remained undisturbed in 2016.
For approximately three months, contractors had no forum (and therefore, no remedy) for protests of civilian task orders valued over $10 million. That changed on December 14, 2016, when the Government Accountability Office Civilian Task and Delivery Order Protest Authority Act of 2016 became law. See Public Law No. 114-779 (Dec. 14, 2016). This law restored GAO’s civilian task order protest jurisdiction to its pre-October 1, 2016 scope.
Less than two weeks later, the scope of GAO’s jurisdiction over task order protests changed yet again. On December 23, 2016, the 2017 National Defense Authorization Act became law. See Public Law No. 114-328 (Dec. 23, 2016). Although major changes aimed at limiting federal bid protests had been under discussion, most of the limiting provisions were not adopted. The 2017 NDAA did not change the $10 million threshold for protests of civilian agency task order awards. But it increased GAO’s jurisdictional threshold for military agency task order protests from $10 million to $25 million. Protests asserting that a task order award was improper because it exceeded the scope, the performance period, or the maximum value of the underlying contract can be filed without regard to the threshold.
HP gets caught in a jurisdictional trap
Like many government contractors, HP Enterprise Services was ensnared in these changes. On July 11, 2016, HP protested the award of a task order to CACI, Inc. The task order was issued by GSA, but it required the delivery of IT support services to DoD. GSA took corrective action soon thereafter, and the protest was dismissed as academic.
On October 14, 2016, GSA informed HP that it had again selected CACI for award. On October 21—three weeks after the sunset date for civilian agency task order protests—HP filed another protest with GAO. HP asserted that GSA’s “corrective action was ineffective and failed to adequately address the serious issues raised by [HP’s] initial protest.” Like the initial protest, HP did not assert an increase in scope, period, or maximum value of the underlying contract.
GAO dismissed HP’s protest on November 30, concluding that GAO had no jurisdiction to consider the protest because it was filed after the September 30, 2016 statutory sunset. HP sought reconsideration of the decision on December 12. The GAO Civilian Task and Delivery Order Protest Authority Act of 2016 was signed into law two days later, and HP supplemented its motion for reconsideration two days after that.
GAO rejects all three of HP’s arguments
HP’s first argument was that the civilian agency jurisdictional sunset provision did not apply because GAO was conducting a procurement on behalf of a defense agency. Citing section 801 of the 2008 NDAA and FAR 17.703, HP argued that civilian agencies are “subject to GAO review, even if the civilian agency uses a non-DoD contract vehicle.” GAO found this argument unpersuasive. In GAO’s view, these provisions address the legal requirements applicable to civilian agencies conducting procurements on a defense agency’s behalf. They do not authorize a civilian agency to issue a contract or order pursuant to the statutory authority applicable to defense agencies, which appears in 10 USC § 2303(a). Further, they do not govern GAO’s jurisdiction over civilian agency procurements. GAO emphasized that its jurisdiction to consider protests of task orders issued by civilian agencies is governed by 41 U.S.C. § 4106(f). At the time of HP’s protest, GAO’s jurisdictional authority had expired by operation of the sunset provision. GAO’s decision in this regard is consistent with the decision in Analytic Strategies, LLC, B-413758.2, B-413758.3 (Nov. 28, 2016). According to GAO’s decision in that case, the fact that a defense agency will benefit from, fund, or place a task order issued by a civilian agency does not invoke the statutory authority that allows GAO to consider protests of task orders issued by defense agencies.
HP’s second argument was that GAO should reconsider its decision in light of the reinstatement of GAO’s jurisdiction over civilian agency task order protests. After all, GAO had jurisdiction to consider civilian agency task order protests filed before September 30 and after December 14. Consistent with its often unforgiving application of its statutorily-granted jurisdiction, GAO was unsympathetic. There was nothing in the statute that authorized GAO retroactive jurisdiction. There was nothing in the statute that would have eliminated the three-month gap in GAO’s jurisdiction over protests of civilian agency task orders.
Third, HP argued that GAO should consider the motion for reconsideration as a new protest filed after December 14, 2016 or reinstate the initial protest, which had been filed in July 2016. GAO was sympathetic to HP’s plight, acknowledging that “[HP] could not have filed a protest with our Office within ten days of GSA’s award to CACI.” But it nevertheless rejected the argument. In GAO’s words, “the underlying action being challenged is the agency’s allegedly improper award to CACI, which occurred on October 14.” GAO also refused HP’s invitation to reinstate the earlier protest. The purported inadequacy of an agency’s corrective action is not a basis to reinstate the underlying protest. GAO explained that an otherwise academic protest “is not revived by subsequent agency action or inaction.”
HP was one of many unlucky contractors that found themselves with grounds to protest the award of a task order between October 1, 2016 and December 14, 2016, but no venue with jurisdiction to assert it.
What’s next for GAO bid protests?
Although civilian agency task order protest jurisdiction has now been restored, the threshold for defense agency task order protests has increased to $25 million. This change will likely affect many more contractors. The current state of the law for task order protests is as follows:
- Task Orders Issued by Military Agencies or Departments. GAO has jurisdiction over protests of task order awards issued by military agencies or departments (e.g., the Secretaries of Defense, Army, Navy, Air Force, Homeland Security (for the Coast Guard), and NASA) only if: (1) the value of the task order award is at least $25 million; or (2) the protest asserts that the task order increases the scope, period, or maximum value of the underlying contract.
- Task Orders Issued by Civilian Agencies or Departments. GAO has jurisdiction over protests of task order awards issued by civilian agencies only if: (1) the value of the task order award is at least $10 million; or (2) the protest asserts that the task order increases the scope, period, or maximum value of the underlying contract. According the decisions in HP and Analytic Strategies, a task order award issued by a civilian agency is subject to the $10 million threshold even if it is for the benefit of a military agency, funded by a military agency, or placed by a military agency.
- FSS Orders. Protests of Federal Supply Schedule Orders orders of any value may be brought at the GAO.
- Court of Federal Claims Jurisdiction. Court of Federal Claims jurisdiction over civilian or military task order protests is limited to protests asserting that order increases the scope, period, or maximum value of the underlying contract.
GAO’s approach to past performance in protests of TRICARE managed care support contracts (Nov. 27, 2016)
How the Supreme Court’s decision in Kingdomware affects small business contracting (Sept. 19, 2016)