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  (The sunset date for protests of civilian agency task orders had previously been repealed by the GAO Civilian Task and Delivery Order Protest Authority Act of 2016.)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

Recognized by Chambers as one of the nation’s top bid protest lawyers and government contracts practitioners, Jay Carey represents clients in complex, high-stakes government procurements often worth billions of dollars. He is a vice-chair of the firm’s Government Contracts practice group and a…

Recognized by Chambers as one of the nation’s top bid protest lawyers and government contracts practitioners, Jay Carey represents clients in complex, high-stakes government procurements often worth billions of dollars. He is a vice-chair of the firm’s Government Contracts practice group and a co-chair of the Aerospace, Defense, and National Security industry group.

Jay has won bid protests collectively worth more than $100 billion, for clients across a range of industries — including aerospace & defense, energy, healthcare, biotechnology, cybersecurity, IT, and telecommunications. He litigates protests before the U.S. Government Accountability Office (GAO); the Court of Federal Claims (COFC); and state tribunals across the country. A list of his recent wins can be found under the “Representative Matters” tab.

In addition, Jay advises clients on compliance matters, conducts internal investigations, and defends against investigations by federal and state agencies. He also counsels clients on matters related to the formation of government contracts, including organizational conflicts of interest and the protection of intellectual property rights when entering into procurement contracts, grants, cooperative agreements, and “Other Transaction Authority” agreements with the government.

Jay serves as co-chair of the American Bar Association Public Contract Law Section’s Bid Protest Committee.

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Photo of Kayleigh Scalzo Kayleigh Scalzo

Ranked by Chambers USA among government contracts practitioners, Kayleigh Scalzo represents government contractors in bid protests and other 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…

Ranked by Chambers USA among government contracts practitioners, Kayleigh Scalzo represents government contractors in bid protests and other 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, federal and state agencies, and state courts.

Kayleigh a co-chair of the American Bar Association Public Contract Law Section’s Bid Protest Committee. She is also a frequent speaker on bid protest issues.

Kayleigh maintains an active pro bono practice focused on immigration issues and gender rights.

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Photo of Evan R. Sherwood Evan R. Sherwood

Evan Sherwood counsels federal contractors on Contract Disputes Act (CDA) claims, the cost accounting standards (CAS), cost allowability, requests for equitable adjustment (REAs), contract terminations for convenience/default, and related audits, litigations, and investigations. He also advises on contract compliance and formation issues, including TINA/defective pricing…

Evan Sherwood counsels federal contractors on Contract Disputes Act (CDA) claims, the cost accounting standards (CAS), cost allowability, requests for equitable adjustment (REAs), contract terminations for convenience/default, and related audits, litigations, and investigations. He also advises on contract compliance and formation issues, including TINA/defective pricing, data rights, mandatory disclosure rules, ethics, conflicts of interest, teaming arrangements, and other transaction agreements (OTAs). He has litigated matters before the Court of Federal Claims, the Armed Services Board of Contract Appeals, the Government Accountability Office, and the Federal District Courts.

In his work for defense and civilian agency contractors, Evan:

  • Prepares CDA claims and REAs;
  • Litigates matters involving CAS compliance, cost accounting practice changes, and cost allowability under the FAR and grant rules;
  • Defends contractors during audits and investigations involving the Defense Contract Audit Agency (DCAA), Defense Contract Management Agency (DCMA), and the Office of the Inspector General (OIG);
  • Advises on constructive changes, work delays, defective specifications, stop-work orders, government-furnished property, CPARS, warranty matters, data rights, and quality controls;
  • Counsels on disputes between primes and subcontractors, including teaming disputes; and
  • Conducts internal investigations and defends clients in federal investigations involving whistleblower allegations and retaliation claims.

Evan is a Vice Chair of the ABA Public Contract Law Section’s Contract Claims & Disputes Resolution Committee. He routinely writes and speaks about legal issues in federal contracting.

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