The Department of Defense (“DoD”) has proposed a new rule limiting the use of “brand name or equal” contract competitions, calling on contracting officers to publicly justify their need for a brand name-type product before issuing a solicitation.  The rule would implement Section 888(a) of the National Defense Authorization Act of 2017, which directed the Secretary of Defense to “ensure that competition in [DoD] contracts is not limited” by brand name references without a justification under 10 U.S.C. § 2304(f).

Background

Federal procurement law requires agencies to draft competitive solicitations that describe the Government’s needs generally, rather than referencing a specific type of product.  FAR 11.104.  However, “under certain circumstances,” agencies may request a specific brand name product or its equal.  Id.  An off-brand product is “equal” if it shares the same the same salient characteristics as the brand name product.  E.g., Glem Gas S.p.A., B-414179, Feb. 23, 2017, 2017 CPD ¶ 60 at 4.

Contractors have at times challenged, through pre-award bid protests, agency decisions to reference a brand name product as unfair and unduly restrictive of competition, contrary to the Competition in Contracting Act of 1984’s (“CICA”) requirement for full and open competition.  See G.H. Harlow Co., Inc., B-266049, Jan. 26, 1996, 96-1 CPD ¶ 95 at 2-3 (denying protest that brand name or equal solicitation was unduly restrictive of competition); Hesco Bastion Ltd. v. United States, 136 Fed. Cl. 146, 154 (2018) (explaining how the agency took corrective action to remove unduly restrictive terms from its brand name or equal solicitation).  Despite that, the FAR provides that a brand name or equal solicitation is normally deemed to satisfy CICA’s competition requirement.  FAR 6.302-1(c)(2).

DoD’s Proposed Rule

DoD’s new rule would reverse the FAR’s acceptance of brand name or equal specifications for DoD procurements.  Instead, before issuing a brand name or equal solicitation, DoD contracting officers would need to execute a written justification and approval (“J&A”) in accordance with FAR 6.303 and FAR 6.304.  Those provisions generally require contracting officers to publicize their decision to award a contract by a means other than full and open competition, document their reasoning for doing so, and provide supporting data for the decision.  Additionally, FAR 6.304(a) also requires DoD contracting officers to seek the approval of a senior agency official before finalizing a J&A, including the approval of the “senior procurement executive” for acquisitions over $93 million.  FAR 6.304(a)(4); DFARS 206.304(a)(4).

Although DoD’s proposed rule would make it harder for a contracting officer to use a brand name or equal solicitation, it may also make it more difficult to file a timely pre-award bid protest of the contracting officer’s decision.

Under current law, at both the Government Accountability Office (“GAO”) and the Court of Federal Claims, a protest challenging a solicitation’s terms must be filed before the closing date for receipt of initial proposals.  A prospective protester can thus normally wait until DoD publishes its final solicitation before protesting the grounds rules of a competition, allowing for time to consider all the terms of a solicitation.  However, GAO generally holds that protests of a J&A must be filed within 10 days of their public posting on FedBizOpps.  Depending on the circumstances, if DoD’s rule is adopted, offerors who disagree with a brand name or equal determination may need to protest at GAO immediately following the publication of a J&A on FedBizOpps, rather than waiting to see a final draft of the Agency’s solicitation.[1]

What It Means

For industry, the upshot of the proposed rule is that contractors will need to track the development of a brand name or equal procurement from its earliest stages.  If the rule is adopted, contractors that provide brand name products may need to provide agencies with information to support a written J&A.  Meanwhile, contractors that could be disadvantaged by a brand name specification would have to be alert not only to the issuance of a J&A relating to a brand name specification, but also to the need to take immediate action in order to timely challenge it.  And in either case, contractors would be wise to closely monitor additional developments related to this proposed rule as it progresses through the administrative rulemaking process.

[1] The Court of Federal Claims does not use this 10-day rule, but complications could also arise at the Court depending on the length of time between a J&A’s issuance and the filing of a protest.

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Photo of Michael Wagner Michael Wagner

Mike Wagner represents companies and individuals in complex compliance and enforcement matters arising in the public procurement context. Combining deep regulatory expertise and extensive investigations experience, Mike helps government contractors navigate detailed procurement rules and achieve the efficient resolution of government investigations and…

Mike Wagner represents companies and individuals in complex compliance and enforcement matters arising in the public procurement context. Combining deep regulatory expertise and extensive investigations experience, Mike helps government contractors navigate detailed procurement rules and achieve the efficient resolution of government investigations and enforcement actions.

Mike regularly represents contractors in federal and state compliance and enforcement matters relating to a range of procurement laws and regulations. He has particular experience handling investigations and litigation brought under the civil False Claims Act, and he routinely counsels government contractors on mandatory and voluntary disclosure considerations under the FAR, DFARS, and related regulatory regimes. He also represents contractors in high-stakes suspension and debarment matters at the federal and state levels, and he has served as Co-Chair of the ABA Suspension & Debarment Committee and is principal editor of the American Bar Association’s Practitioner’s Guide to Suspension & Debarment (4th ed.) (2018).

Mike also has extensive experience representing companies pursuing and negotiating grants, cooperative agreements, and Other Transaction Authority agreements (OTAs). In this regard, he has particular familiarity with the semiconductor and clean energy industries, and he has devoted substantial time in recent years to advising clients on strategic considerations for pursuing opportunities under the CHIPS Act, Inflation Reduction Act, and Bipartisan Infrastructure Law.

In his counseling practice, Mike regularly advises government contractors and suppliers on best practices for managing the rapidly-evolving array of cybersecurity and supply chain security rules and requirements. In particular, he helps companies assess and navigate domestic preference and country-of-origin requirements under the Buy American Act (BAA), Trade Agreements Act (TAA), Berry Amendment, and DOD Specialty Metals regulation. He also assists clients in managing product and information security considerations related to overseas manufacture and development of Information and Communication Technologies & Services (ICTS).

Mike serves on Covington’s Hiring Committee and is Co-Chair of the firm’s Summer Associate Program. He is a frequent writer and speaker on issues relating to procurement fraud and contractor responsibility, and he has served as an adjunct professor at the George Washington University Law School.

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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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