The House of Representatives passed its version of the FY2020 National Defense Authorization Act (“NDAA”) last week. The headline story was the remarkably close, party-line vote: in contrast to past years, the bill received no Republican votes, and eight Democratic Members voted against it.
Those partisan dynamics obscured the inclusion of two important amendments – one Republican and one Democratic – regarding bid protest policy that the House quietly adopted in its bill. The provisions are not yet law, since the House and Senate must still resolve differences in their respective NDAAs through the conference process. In this post, we summarize these provisions and encourage government contractors to watch them closely in the coming months.
The first amendment from Rep. Houlahan (D-PA) would allow contracting officers to provide more fulsome explanations to disappointed bidders on task or delivery orders under multiple award IDIQ contracts. For orders valued between the simplified acquisition threshold and $5.5 million, the amendment would require contracting officers to provide, on written request, “a brief explanation” for the decision on these orders, including “a summary of the rationale for the award and an evaluation of the significant weak or deficient factors in the offeror’s offer.” This provision builds on the recent trend of efforts by Congress to increase transparency regarding agency award decisions.
The more significant amendment from Rep. Norman (R-SC) would modify a pilot program on shifting the costs of bid protests denied by the Government Accountability Office (“GAO”). The pilot program originated in the FY2018 NDAA. That year, the Senate proposed a provision that would penalize certain contractors who lose GAO protests by requiring the contractor to pay the government’s costs incurred in processing the protest. The Senate’s language would have applied to protestors with revenues over $100 million, and would have imposed the cost-shifting penalty if GAO denied “all of the elements” of the protest. Those penalties would have taken effect immediately.
Because the House had no corresponding provision in FY18, the text went to the House-Senate conference committee for resolution. The conferees modified the Senate provision by raising the applicability threshold to $250 million and cabining the cost-shifting penalties to a pilot program. Under the terms of the final conference text, the pilot program was slated to start in December 2019 (two years after enactment of the bill), and to end in December 2022 (five years after enactment).
Rep. Norman’s amendment would adjust this pilot program in two ways. First, it would narrow the scope of the penalty by defining the government’s relevant costs as the “direct costs incurred by the Department in support of hearings to adjudicate covered protests” — a significant change from the current language that includes all “costs incurred in processing covered protests.” Second, it would delay the start of the program until “60 days after the Secretary of Defense certifies in writing to the congressional defense committees that the Department of Defense has business systems that have been independently audited and that can accurately identify the direct costs incurred by the Department of Defense in support of hearings to adjudicate covered protests.”
That is a tall order. Although the Department has made significant strides in auditability, it is not clear that the Secretary could make such a certification before the pilot program’s December 2022 expiration date. In other words, this requirement could run out the clock on the pilot program.
Bid protest policy remains a priority for the Department and for acquisition policy experts in Congress, so we expect this provision to receive significant attention during the FY20 conference.