In a new rule announced yesterday, the FAR Council implemented prior statutory changes to GAO’s bid protest jurisdiction.  For task orders issued by the Department of Defense, NASA, or the Coast Guard, the rule provides that GAO will have jurisdiction only over task orders “valued in excess of $25 million.”

For civilian agencies, GAO continues to have jurisdiction over protests of task orders “valued in excess of $10 million.”  The rule also permanently repeals a pre-existing FAR clause that had set a September 30, 2016 expiration date on the ability to protest civilian agency task orders.

The new rule — codified as FAR 16.505(a)(10) — implements Section 835 of the National Defense Authorization Act for Fiscal Year 2017, which directed the FAR Council to establish the new DoD, NASA, and Coast Guard threshold.  (The sunset date for protests of civilian agency task orders had previously been repealed by the GAO Civilian Task and Delivery Order Protest Authority Act of 2016.)  According to the FAR Council, its new rule is designed to “follow[] the statute exactly.”

Procedural Traps for the Unwary

Contractors with indefinite-delivery/indefinite-quantity (“IDIQ”) contracts should be aware of the jurisdictional threshold for task order protests, which is one of many technical traps that can prevent disappointed offerors from challenging agency decisions — even when the agency decision is clearly contrary to law or irrational.

When considering a task order protest, a protester must take care to properly “value” the task order, using GAO-approved methods.  Generally, GAO values task orders on the face of the order, even if the protester argues that the value of the order should have been higher under a proper cost realism analysis.

For example, GAO recently dismissed a post-award protest of an allegedly improper sole-source task order because it was under the $25 million threshold, rejecting the protester’s calculation that the task order was worth roughly $30 million.  Erickson Helicopters, Inc., B-415176.3 et al., Dec. 11, 2017, 2017 CPD ¶ 378 at 10-12.  GAO’s decision involved a close reading of the task order and its option periods, demonstrating that it can be difficult to properly determine the “value” of a task order.

Determining the value of a task order in a pre-award protest can be even murkier.  One measure that GAO has considered is whether the proposals submitted in response to the solicitation exceeded the jurisdictional threshold.  Goldbelt Glacier Health Servs., LLC – Recon., B-410378.3, Feb. 6, 2015, 2015 CPD ¶ 75 at 5 (citing ICI Servs., Inc., B-409231.2, Apr. 23, 2014, 2014 CPD ¶ 132 at 3).

Notably, even if a task order does exceed the $25 million threshold for DoD, NASA, and the Coast Guard, or the $10 million threshold for other civilian agencies, a protester can file its protest only at GAO, not at the Court of Federal Claims.  On this point, the Federal Acquisition and Streamlining Act of 1994 is an independent bar on most task order protests at the court, excepting certain Federal Supply Schedule order protests and other less-common contract vehicles.

Out-of-Scope Task Orders Can Still Be Challenged at GAO or the Court

These jurisdictional restrictions do not apply, however, to protests that challenge a task or delivery order “on the grounds that the order increases the scope, period, or maximum value of the contract.”  Such protests may be brought at either GAO or the Court of Federal Claims, without regard to the value of the order.

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Photo of Jay Carey Jay Carey

A Chambers-rated government contracts practitioner, Jay Carey focuses his practice on bid protests, and regularly represents government contractors before the U.S. Government Accountability Office and the Court of Federal Claims. He has prosecuted and defended more than 80 protests, including some of…

A Chambers-rated government contracts practitioner, Jay Carey focuses his practice on bid protests, and regularly represents government contractors before the U.S. Government Accountability Office and the Court of Federal Claims. He has prosecuted and defended more than 80 protests, including some of the most high-profile protests in recent years, for clients in the aerospace and defense, biotechnology, healthcare, information technology, and telecommunications sectors. Mr. Carey also counsels clients on compliance matters and all aspects of federal, state, and local government procurement and grant law. He counsels clients extensively on organizational conflicts of interest (OCIs) and on strategies for protecting and preserving intellectual property rights (in patents, data, and software).

Photo of Kayleigh Scalzo Kayleigh Scalzo

Kayleigh Scalzo represents government contractors in high-stakes litigation matters with the government and other private parties. She has litigated bid protests in a wide variety of forums, including the Government Accountability Office, U.S. Court of Federal Claims, U.S. Court of Appeals for the…

Kayleigh Scalzo represents government contractors in high-stakes litigation matters with the government and other private parties. She has litigated bid protests in a wide variety of forums, including the Government Accountability Office, U.S. Court of Federal Claims, U.S. Court of Appeals for the Federal Circuit, FAA Office of Dispute Resolution for Acquisition, Port Authority of New York and New Jersey, federal and state agencies, and state courts. She is also a co-head of the firm’s Claims, Disputes, and Other Litigation Affinity Group within the Government Contracts practice.

Kayleigh has particular experience navigating state and local procurement matters at both ends of the contract lifecycle, including bid protests and termination matters. In recent years, she has advised and represented clients in connection with procurements in Alaska, Arizona, California, the District of Columbia, Illinois, Indiana, Kansas, New Jersey, New York, Pennsylvania, Tennessee, Texas, and Virginia.

Kayleigh is a frequent speaker on bid protest issues, including the unique challenges of protests in state and local jurisdictions.

Photo of Evan R. Sherwood Evan R. Sherwood

Evan Sherwood advises government contractors on a wide range of matters, including claims and disputes, government investigations, suspension and debarment, bid protests, and regulatory counseling. In addition, Evan counsels clients on risk mitigation strategies, including the process of obtaining SAFETY Act protection.