Summary
- The Relationship Between GAO and the Federal Courts
- When GAO and the Court of Federal Claims Disagree
- The Problem of Finding the Hidden Rules in GAO Decisions
Public Contract Law Journal
When Recommendations Become Requirements: How the GAO’s “Non-Binding” Bid Protest Decisions Create Unofficial Procurement Rules Contracting Officers Are Expected to Follow
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Abstract
The Government Accountability Office’s (GAO) bid protest decisions often create standards that are followed to nearly the same degree as statutes, Executive Orders (EOs), and regulations and are often given similar deference. GAO decisions, however, are much harder for contracting officers (COs) to find, read, and understand than statutes, regulations, and EOs. This confusion fundamentally undermines the intent of the Federal Acquisition Regulation (FAR) to create a single source for all acquisition regulations that is written in simple, easy to understand language and creates an untenable situation for COs who are unaware of these additional rules. Codification of the standards created by GAO decisions would allow public participation and comment during the rule-making process and provide clearer, more consistent guidance on topics where the FAR has left room for interpretation that is currently being filled by standards created in GAO’s bid protest decisions.
I. Introduction
The Federal Acquisition Regulation (FAR) tells members of the government acquisition team they
may assume if a specific strategy, practice, policy or procedure is in the best interests of the Government and is not addressed in the FAR, nor prohibited by law (statute or case law), Executive order [EO] or other regulation, that the strategy, practice, policy or procedure is a permissible exercise of authority.
The FAR and Agency FAR Supplements provide regulations governing supply and services procurements for the government. The FAR also provides acquisition policies and procedures for agencies and contracting officers (COs).
While seemingly straightforward, FAR 1.102(d) provides guidance to COs that is more problematic than it appears. The direction for COs to comply with the FAR, related statutes, EOs, and other regulations is fairly straightforward and, generally, easy for COs to follow. The FAR includes citations to statutes, EOs, Office of Management and Budget (OMB) circulars, Office of Federal Procurement Policy (OFPP) policy letters, and the Code of Federal Regulations (C.F.R.) and tells COs that these references automatically incorporate any relevant amendments to statutes or other documents. The FAR is amended, as necessary, to incorporate policies and procedures related to new statutes or EOs and revisions to existing ones. While the need to revise the FAR can come from any statute, the National Defense Authorization Act (NDAA) accounts for many FAR revisions by including direction to the FAR Council to promulgate a regulation implementing policies or procedures for a specific section of the NDAA. The problematic portion of the FAR 1.102(d) guidance is the statement that a practice, policy, or procedure is permissible if it is not prohibited by case law, a term that is not defined in the FAR but, presumably, refers to rules stated in judicial decisions.
In many instances, the inclusion of “case law” in FAR 1.102(d) has no impact at all. It is often either ignored entirely or addressed by imposing a circular definition. When a prospective offeror objects to the terms of a solicitation or an interested party objects to the award of a contract, a protest may be submitted claiming that the solicitation is flawed or the CO erred in awarding the contract because of a failure to comply with a requirement in a statute or regulation. Bid protest decisions issued by the Government Accountability Office (GAO) and the United States Court of Federal Claims (COFC) frequently address actions by the agency that are not specifically mentioned in the FAR. These decisions sometimes uphold the CO’s actions on the grounds that “a procurement procedure is permissible where not specifically prohibited.” Other decisions, however, create rules and then determine that a CO acted improperly in failing to follow the stated rule. It is the second type of decision that is problematic because those decisions apply a standard that is not explicitly stated in statute or the FAR.
The discussion in this paper is confined to the application of this problem in the context of bid protest decisions published by GAO and COFC. The problem is complex. Complying with FAR 1.102(d) requires the CO to do at least two things: 1) understand the meaning of the term case law; and 2) find, read, interpret, and understand applicable case law. In addressing the first part of this complex equation, it is necessary to first define bid protests, briefly review relevant history, and examine the regulations and policy guidance related to bid protests. This will provide the critical framework for the second part of the complex equation, which requires an analysis of the benefits, risks, and outcomes related to imposing on COs a duty to locate, read, understand, and interpret bid protest decisions to comply with case law that is not cited in the FAR.
II. Bid Protests: Background and Processes
Understanding why this requirement is problematic requires fitting together a number of pieces, many of which are easier to understand by placing them within a historical context. From the 1780s through 1984, negotiated contracts were the exception to the requirement of formal advertising. In the late 1960s through the early 1980s, discussions increasingly focused on reforming government procurement regulations. In 1978, Congress imposed a statutory requirement for OFPP to create the FAR as a “single, simplified, uniform” procurement regulation. Two of the main objectives for the FAR that are important to this discussion were to 1) create a simple regulation “written in plain English” and 2) allow for public participation in the rule-making process. In 1984, the Competition in Contracting Act (CICA) changed the preferred method of contracting from formal advertising (competitive bidding) to competitive negotiated procurement and became the basis for the FAR. Competitive procurement processes are now required in government procurement, to the maximum extent practicable, to give contractors “a fair chance to compete,” ensure low prices, and “avoid favoritism and conflict of interest.” CICA included express statutory authority for GAO to hear and decide bid protests.
A. An Overview of Bid Protests
A protest is a written objection by an interested party to a solicitation for offers for a property or services contract, the cancellation of a solicitation, an award of a contract, or the termination or cancellation of a contract award. For bid protests, an interested party is defined as “an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by failure to award the contract.” An interested party may elect to file a protest with the contracting agency, COFC, or GAO. Two of these fora—COFC and GAO— issue written decisions of their bid protest, often providing clarifications or interpretations of procurement regulations, which can prove helpful to both COs and contractors.
While there are similarities, there are more significant differences between the GAO’s and COFC’s processes, procedures, and use of prior legal precedence in future decisions. One notable difference is the GAO’s significantly longer history of issuing bid protest decisions.
B. The History of Bid Protests
Complaints about government contracts have existed since the government began issuing contracts. In an 1875 decision, the Supreme Court confirmed that the government’s sovereign powers did not apply when the government entered into the stream of commerce and, by doing so, subjected itself to the laws that applied to individual citizens. Despite the option for post-award contract disputes to be heard, grievances regarding solicitation content or government award decisions were not covered by the federal courts because of a well-settled rule that such a cause of action did not exist. The cases said a common-law remedy was not available to a frustrated bidder who disagreed with conduct by a public official in his official capacity, such as decisions related to the content of a solicitation or selecting a contractor to receive an award.
1. Bid Protests in the Court of Public Opinion and Agency Protests
In the early years, protests of solicitation practices and award decisions in government contracting occurred only in the court of public opinion. In at least one documented case in the mid-1800s, a prospective contractor took a protest directly to the government. The hearing and resolution of that matter may have been the first documented pre-award agency protest. The practice became more common over time, but agencies were generally reluctant to formalize their bid protest processes or procedures. Now, covered by FAR Part 33, agencies are required to have a process in place allowing for the submission of agency level protests. Agencies are also now required to provide a written response to a protest, but agency bid protest decisions are not published or available for public review.
2. Statutory Direction
Congress was similarly reluctant to provide express statutory direction regarding bid protests. GAO’s statutory authority to hear bid protests was not expressly provided by Congress until CICA was passed in 1984. GAO, however, interpreted language in the Budget and Accounting Act of 1921 as providing implied authority and began deciding bid protests in the mid-1920s. Between the time GAO found an implied authority to decide bid protests and the time GAO was granted express authority to do so by CICA, the federal courts also wrestled with questions concerning their authority to decide bid protests. The following details the progression from the Attorney General’s opinion in the 1850s that no federal court had authority to hear and issue opinions related to solicitations and award decisions, to decisions in cases from the 1970s finding clear authority in the Administrative Procedure Act (APA) for federal courts to hear and decide bid protests, to statutes expressly granting bid protest jurisdiction to certain federal courts.
3. The Opinion of the Courts
Federal courts were given jurisdiction to hear contractor claims against the United States when Congress created the U.S. Court of Claims in 1855. In the beginning, cases protesting contract awards were generally treated like other contract disputes and were mostly unsuccessful. Prior to 1970, decisions of both the courts and GAO acknowledged the principle that “statutes governing the letting of public contracts are for the protection of the Government and bidders have no standing in court to compel administrative action thereunder.”
For example, a federal district court case from 1934 determined that courts had no authority to grant relief or interfere with an awarded contract based on an accusation by a private citizen that the contract was awarded improperly. The court noted that standing could come from a federal statute but found no statute expressly granting a right to bring a claim against the government for failure to award a contract to a “low bidder whose bid has been rejected.” The court noted that the government’s statutory duty to accept the lowest responsible bid was made for the benefit of the government, not the bidder, preventing the bidder from using the statute to bring a case against the government. The court’s opinion then examined the statutory requirement that the government select the lowest responsible bidder for award, noting that regulations, like the one in question, requiring discretion on the part of the CO prevented review by the judicial branch of the government. Had the duty been purely “ministerial” and involved no discretion, the court would have, perhaps, reached a different conclusion, but circumstances not supporting that finding left the court “powerless to afford relief.”
A few years later, the 1940 Supreme Court opinion in Perkins v. Lukens Steel made it clear that there was no private right to sue the government for failure to follow required procurement procedures in statutes or agency regulations. The Court opined that allowing judicial review of the government’s administration of its purchasing powers would be a departure from the well-settled division between the judicial and executive branches of government, and, absent a clear statutory intent to invoke judicial supervision, the Court saw no reason to abandon the complete authority of the executive and legislative branches to enter into government contracts that had been in place since the beginning of government contracting. The Court concluded that, with regard to private individuals, no acts by the government amounted to a harm (“tortious violation”) and a suit brought by these individuals instead amounted to interference with the internal affairs of government officials. This case provided precedent for federal courts to dismiss bid protests for several decades.
Six years after the Perkins v. Lukens Steel decision, the APA was passed. Section 10(a) of the APA provided that “[a]ny person suffering legal wrong because of any agency action, or adversely affected or aggrieved by such action within the meaning of any relevant statute, shall be entitled to judicial review thereof.” Section 10(e) of the APA provided that “the reviewing court shall decide all relevant questions of law” and shall “hold unlawful and set aside agency action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”
The D.C. Circuit’s Scanwell Laboratories, Inc. v. Shaffer decision in 1970 applied the APA in a way that changed the long-standing precedent that federal courts could not hear bid protests. The court held that the “legal rights doctrine” of standing, on which prior cases had relied, was no longer good law because Section 10(e) of the APA provided the previously missing statutory authority to hear such cases and waived the government’s sovereign immunity, both of which were necessary for federal court jurisdiction over complaints by disappointed bidders. Soon after the Scanwell decision provided a legal basis for federal district courts to claim jurisdiction over bid protest cases, the majority of federal district courts began hearing protests.
In the Federal Courts Improvement Act of 1982, Congress provided statutory authority to the Federal Claims Court for bid protests, resulting in both the federal district courts and the Federal Claims Court having jurisdiction over bid protests from 1982 through 2001. The statute provided clear direction that COFC (formerly the Federal Claims Court), when hearing bid protest cases, “shall review the agency’s decision pursuant to the standards set forth in section 706 of title 5,” the judicial review portion of APA section 10(e). COFC continues to have jurisdiction over bid protest cases but is a less popular forum for such matters than GAO.
4. GAO’s Authority to Hear Bid Protests Prior to CICA (1921 to 1984)
GAO has a much longer history as a bid protest forum than COFC. GAO was created by the Budget and Accounting Act of 1921. Prior to CICA, from 1921 to 1984, GAO’s plenary authority to hear bid protests came from the Comptroller General’s interpretation of the Budget and Accounting Act of 1921. Nothing in the congressional record of the debates related to the Budget and Accounting Act of 1921 indicated that GAO was to function as a bid protest forum, but GAO received complaints and issued decisions regarding allegations of wrongdoing related to solicitations and government contract awards based on an implied statutory authority until 1984.
When requested, GAO would review invitations to bid to determine whether the specifications were unduly restrictive or included only the minimum needs of the government. Decisions made by GAO were not subject to judicial review. GAO continued to hear bid protests in addition to the federal courts under its implied statutory authority until CICA was passed in 1984, creating a major change to the bid protest landscape.
C. GAO’s Current Statutory Authority to Hear Bid Protests (After CICA)
In 1984, CICA provided GAO an express, but not exclusive, statutory authority to hear bid protests “concerning an alleged violation of a procurement statute or regulation.” GAO was required to prescribe procedures for the “expeditious decision of protests,” including an express option, under the authority granted by CICA. Although GAO does not have exclusive authority over all bid protests, GAO does have exclusive statutory jurisdiction over protests “in connection with” issuance or proposed issuance of a task or delivery order, over a specified dollar value, and protests that an order changes the scope, period of performance, or maximum value of the order’s underlying Indefinite Delivery Indefinite Quantity (IDIQ) contract, regardless of dollar value.
CICA laid out numerous administrative rules, deadlines, and documentation requirements, but did not state the purpose of the GAO’s bid protest authority or provide guidance regarding how GAO should make bid protest decisions. A general consensus has emerged that the purpose of the bid protest system is twofold: 1) to protect competition by ensuring participants in the procurement system comply with the rules; and 2) to ensure the integrity of the government procurement system through increased transparency for bid protest causes and outcomes. With regard to the rules for making decisions, GAO has been free to make its own determinations regarding such things as, for example, what constitutes the complete record for a protest, allowability of extraneous statements or information, and whether decisions must follow precedent from prior GAO decisions or COFC rulings. The next section explores these questions.
III. GAO’s Bid Protest Function
Protests filed at GAO are decided by the Comptroller General, who must issue a final decision within 100 days after the date the protest is properly submitted to the GAO. CICA provides numerous requirements for notification, submission of documentation, and required deadlines. While waiting for GAO to make a decision, an agency may not award the contract or continue performance on an already awarded contract after receiving notice that a timely protest has been filed (commonly referred to as a “CICA stay”), although this can be bypassed if certain statutory requirements are met.
Protected GAO protest decisions are made available to “the interested parties; the head of the procuring activity responsible for the solicitation, proposed award, or award of the contract; and the senior procurement executive of the Federal agency involved.” Public versions of GAO bid protest decisions are published on the GAO’s website, usually within a day or two after the decision date.
A. GAO’s Bid Protest Decisions
GAO will either dismiss a bid protest or issue a decision. GAO can dismiss a protest for failure to state “legally sufficient grounds” or as “academic” if an agency voluntarily takes corrective action. GAO will sustain a protest if it finds a “solicitation, proposed award, or award does not comply with a statute or regulation.” GAO’s review of an agency’s proposal “evaluation is limited to determining whether the evaluation was reasonable and consistent with the stated evaluation criteria.” When determining that an evaluation does not comply with statute or regulation, GAO may recommend that the agency refrain from exercising any contract options; “recompete the contract immediately”; “issue a new solicitation”; “terminate the contract”; award a contract consistent with statute and regulation; implement any combination of these recommendations; or “implement such other recommendations as the Comptroller General determines to be necessary in order to promote compliance with procurement statutes and regulations.” When deciding a protest, GAO will not substitute its judgment for the agency’s and will not sustain a protest based merely on an offeror’s disagreement with the agency’s decision. A protestor generally has the burden to prove that the agency’s actions were unreasonable or unlawful.
GAO may also recommend an agency pay the costs of “filing and pursuing the protest, including reasonable attorneys’ fees and consultant and expert witness fees; and . . . bid proposal preparation” to an appropriate interested party. GAO’s authority includes recommending an agency pay a protestor’s costs even if the agency decides to take corrective action. GAO sees the recommendation for an agency to pay costs not “as an award to prevailing protesters or as a penalty to the agency, but rather . . . to encourage agencies to take prompt action to correct apparent defects in competitive procurements.” When deciding whether to recommend that an agency pay costs, GAO will consider how quickly an agency acts in taking corrective action following the filing of a protest. Since 2013, GAO has been required to report the most frequent reasons for sustaining bid protests. Since FY 2013, GAO has reported a total of nine different protest grounds that resulted in a sustained protest, but these broad, aggregated categories do not provide the level of detail necessary to understand why GAO sustained the protests. The grounds, in order of frequency from most to least reported, are as follows:
Table 1: Most Prevalent Bid Protest Grounds from GAO’s Annual Reports for FY 2013 Through FY 2022.
| Protest Ground | FY22 | FY21 | FY20 | FY19 | FY18 | FY17 | FY16 | FY15 | FY14 | FY13 |
| Unreasonable technical evaluation | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 5 | 3 | |
| Unreasonable cost or price evaluation | 3 | 3 | 5 | 2 | 3 | 3 | 1 | 4 | ||
| Flawed selection decision | 2 | 3 | 3 | 5 | 4 | 2 | ||||
| Unequal treatment (of offerors) | 4 | 4 | 4 | 3 | ||||||
| Unreasonable past performance evaluation | 4 | 2 | 2 | 2 | ||||||
| Inadequate documentation of the record | 2 | 4 | 4 | 2 | ||||||
| Failure to follow evaluation criteria | 3 | 1 | 1 | |||||||
| Flawed solicitation | 3 | 2 | ||||||||
| Flawed discussions | 2 |
The tables below show the number of bid protests for each of the past ten FYs.
Table 2: Bid Protest Statistics from COFC’s Annual Reports for FY 2013 to FY 2022.
| FY22 | FY21 | FY20 | FY19 | FY18 | FY17 | FY16 | FY15 | FY14 | FY13 | |
| Protests Received | 123 | 140 | 120 | 146 | 171 | 129 | 113 | 133 | 95 | 102 |
| Protests Reopened | 3 | 2 | 4 | 2 | 1 | 3 | 7 | 3 | 0 | 0 |
| Protest CasesDisposed Of | 125 | 153 | 116 | 141 | 170 | 133 | 103 | 124 | 100 | 105 |
| Protest Cases Pending at the Start of FY (Oct. 1) | 62 | 75 | 69 | 61 | 59 | 62 | 42 | 30 | 35 | 41 |
| Protest Cases Pending at the End of FY (Sep. 30) | 63 | 62 | 74 | 67 | 60 | 60 | 62 | 42 | 31 | 38 |
Table 3: Bid Protest Statistics from GAO’s Annual Reports forFY 2013 to FY 2022.
| FY22 | FY21 | FY20 | FY19 | FY18 | FY17 | FY16 | FY15 | FY14 | FY13 | |
| Protests Received | 1595 | 1816 | 2052 | 2071 | 2474 | 2433 | 2621 | 2496 | 2445 | 2298 |
| Protest Cases Closed the Prior FY | 1598 | 913 | 2024 | 2080 | 2505 | 2471 | 2586 | 2522 | 2351 | 2389 |
| Protests Re: Task or Delivery Orders | 344 | 401 | 417 | 373 | 356 | 256 | 375 | 335 | 292 | 259 |
| Merit (Sustain + Deny) Decisions | 455 | 581 | 545 | 587 | 622 | 581 | 616 | 587 | 556 | 509 |
| Number of Sustains | 59 | 85 | 84 | 77 | 92 | 99 | 139 | 68 | 72 | 87 |
| Sustain Rate | 13% | 15% | 15% | 13% | 15% | 17% | 23% | 12% | 13% | 17% |
GAO decisions are recommendations and are not binding on an agency. Although agencies are not required to take corrective action or comply with the GAO’s recommendations in response to a bid protest filed at GAO, agencies are required to report to GAO any recommendations that have not been fully implemented within sixty days of receiving the recommendation, and GAO is required to annually report to Congress each instance an agency did not comply with the the GAO’s recommendation. GAO has reported only fourteen instances of agencies not following their recommendations since 1995.
Whether as a direct result of the GAO’s authority to report agencies to Congress and recommend agencies pay fees if an agency does not take prompt actions to resolve protests or for other reasons, agencies generally follow the GAO’s recommendations. Since agencies typically follow the GAO’s recommendations, it is important to understand what precedent is set by GAO decisions and who is required to follow precedent from prior GAO decisions.
B. Precedent
GAO generally follows its own precedent from prior decisions. GAO has emphatically rejected arguments that it is unreasonable to rely on its own prior decisions because GAO decisions are not binding judicial precedent. Because GAO decisions are not binding legal precedent, the principle of stare decisis does not apply to GAO directly; but GAO typically follows the precedent from its prior decisions “in order to promote clarity and certainty for the procurement community.” GAO has also stated that protest grounds based on disagreements with prior GAO decisions involving identical legal issues, absent other mitigating factors, will likely result in dismissal for failure to state sufficient grounds to support a protest.
The GAO’s bid protest guide asserts that its “bid protest cases have resulted in a uniform body of law applicable to the procurement process upon which the Congress, the courts, agencies, and the public rely.” GAO decisions have further elaborated, explaining that “[i]gnoring prior decisions and potentially reaching conflicting legal decisions would create material uncertainty and would be inconsistent with the critical role and purpose of [the GAO’s] forum,” and would go against CICA’s mandate for GAO to provide an “inexpensive and expeditious resolution of protests” for GAO to interpret factually identical legal issues differently, absent changes in the facts or underlying supporting legal framework.
C. The Relationship Between GAO and the Federal Courts
Since GAO is not the only bid protest forum, understanding GAO’s role necessitates examining the relationship between GAO and the federal courts. If COFC or the United States Court of Appeals for the Federal Circuit (CAFC) issues a bid protest decision constituting a final adjudication on the merits, GAO is barred from further consideration of the matter. Although GAO is not required to follow decisions by COFC or CAFC, GAO does often consider COFC and CAFC bid protest decisions in making their decisions and GAO has made changes to its own Bid Protest Regulations on at least one occasion to incorporate “seminal” decisions from the federal courts.
Unlike GAO decisions, COFC bid protest decisions are binding on the parties. COFC is required to follow precedent from the U.S. Supreme Court, CAFC, and the Court of Claims (predecessor to COFC), but is not bound by decisions of GAO, the boards of contract appeals, or other COFC judges.
An interested party may seek reconsideration of a GAO decision by COFC, in that a protest can be filed at COFC after GAO had issued a final decision. For these cases, COFC will review the agency’s decision and the record before the court, but will not conduct an appellate review of the GAO’s decision. COFC gives a “high degree of deference” to GAO decisions and generally treats GAO decisions as “expert opinions,” except when the case involves an issue regarding a question of law that is reserved for the court to decide.
Since GAO typically follows its own precedent from prior bid protests and COFC will often favorably consider following the rationale from GAO’s prior bid protest decisions, the GAO’s bid protest decisions clearly carry a great deal of weight despite being labeled as “recommendations” and “advisory.” The weight that GAO’s decisions carry makes it imperative to understand the impact those decisions have on agency and CO decisions in planning for and conducting procurements.
IV. The Impact of GAO Bid Protest Decisions
When an agency publishes a solicitation for a negotiated procurement, the agency is not required to announce every rule of negotiated procurement within the solicitation. The reasoning behind this rule is that prospective offerors are given constructive legal notice of the negotiated procurement procedures in the FAR because they are published in the Federal Register. This is an important statement for two reasons. First, it clearly articulates that both the government and contractors are considered to have constructive knowledge of the rules for procurement stated in the FAR. Second, the statement emphasizes the importance of publication in allowing public input and providing public notice of these rules. A rule published in the Federal Register is first published as a draft, allowing for public review and comment. After receipt of public comments, the agency reviews the comments, debates their merit, documents any changes made based on the comments, and publishes the final rule in the Federal Register with comments received and responses to those comments, as appropriate. This critical process puts the public on notice and provides opportunities for public input into final rules.
Protests at COFC are decided by presidentially appointed judges who go through Senate confirmation to be seated on the bench. GAO protest decisions, on the other hand, are written by GAO attorneys who are hired by the GAO to decide bid protests as a function of their government employment. The attorneys chosen for these roles are not selected by publicly elected officials, and the general public has no direct or indirect input into who is selected to perform these duties. Because GAO bid protest decisions are only advisory recommendations that are not binding on the agency, this distinction should not matter; however, the pseudo binding nature of the GAO’s bid protest decisions leaves agencies with few options other than to follow the GAO’s decisions, creating a situation that is akin to rulemaking without public input.
A. GAO Sometimes Creates “Rules” That Are Not in the FAR
The GAO’s review of an agency’s actions often requires GAO to determine whether actions taken were necessary or reasonable in order to comply with the FAR. The majority of the GAO’s decisions on a particular topic are consistent with each other, even over a long time span, when the facts are the same or similar. For example, in response to a protest alleging that an agency conducted an unreasonable evaluation, as previously mentioned, GAO “will not substitute [its] judgment for that of the agency” and will review an evaluation only to determine whether it was “reasonable and consistent with the stated evaluation criteria and applicable procurement statutes and regulations.” In many decisions, the GAO’s reasoning simply examines whether an agency did (or did not) do what is required (or not required) to comply with the applicable regulation(s).
In some instances, an obvious action is required or not required as a natural consequence of complying with a regulation. When this occurs, the GAO’s decision will often articulate the requirements that an agency must meet for GAO to determine that the agency acted in compliance with the regulation. Some of the GAO’s decisions, however, establish a requirement that is not explicitly stated in the regulations and is either not intuitively obvious or not the only reasonable action that could be taken to comply with the regulation. There are many examples of this, but the two examples focused on in the subsequent discussion are decisions related to solicitations containing key personnel requirements and decisions related to a solicitation requiring a price realism evaluation for a firm-fixed price contract award.
1. GAO Decisions Regarding “Key Personnel” Requirements
Key personnel are considered essential to the successful performance of the contract and are sometimes included in the technical evaluation for a best value tradeoff source selection. The FAR does not provide guidance for including key personnel as part of a technical evaluation. Generally, proposals should be evaluated only on what is stated in the proposal. In deciding protests related to key personnel, GAO has stated that offerors may not represent a firm commitment from an incumbent employee for a key personnel position based only on hopes or beliefs that the offeror will ultimately provide the proposed employee, and there are decisions finding that an agency’s evaluation should not rely solely on express statements made in an offeror’s proposal regarding key personnel availability. These decisions leave COs in the unenviable position of determining when it is necessary to search beyond the four corners of the proposal to properly evaluate key personnel.
The more problematic decisions are those in which GAO has provided guidance regarding proposed key personnel who have become unavailable during the source selection process. While GAO typically will not consider matters related to administration or performance of the contract after award, GAO has carved out a special exception for protest grounds alleging an impermissible “bait and switch”—a situation where the awardee’s proposed key personnel are unavailable at the contract award. If an agency becomes aware that an offeror’s key personnel has become unavailable, the “agency has a choice between evaluating the original proposal as submitted, or opening discussions to allow for modified proposals.” If discussions are not held, an offeror will not be able to submit replacement key personnel for those who are unavailable, making them ineligible for award.
The problem is not that the GAO’s standards or guidance are incorrect per se, but that GAO is basing these decisions on rules that are not stated in the FAR. Unless a CO makes the effort to examine GAO decisions on the topic, the CO has no notice that these standards will be binding should the unfortunate circumstance of having unavailable key personnel come to light during a source selection or at the time of award. While some COs may be aware of these decisions, the decisions are not as easy to locate as the rules clearly stated within statutes, EOs, or regulations.
2. Rules from GAO Decisions Regarding “Price Realism” Analysis
Another topic where GAO has created standards beyond what is explicitly stated in the FAR is price realism. The rule that a price reasonableness determination is used to determine whether proposed prices are too high and a price realism analysis is used to determine whether proposed prices are too low is not explicitly stated in the FAR. The FAR does not specifically use the term “price realism” but does state that a realism analysis may be used for some competitive fixed-price-type contracts when there is concern that offerors may not understand requirements and may propose costs that are too low to meet requirements.
GAO has consistently decided that “[a]bsent a solicitation provision advising [offerors] that the agency intends to conduct a price realism analysis, agencies are neither required nor permitted to conduct such an analysis in issuing a fixed-price [contract].” If a solicitation clearly notifies offerors that a price realism evaluation may be conducted or the agency may conduct an evaluation to determine whether proposed prices are too low, the agency is required to conduct a price realism evaluation. Conversely, a price realism evaluation is impermissible if the solicitation does not explicitly state that one will be performed. This creates an issue where a CO who is unaware of the GAO’s decisions might, for example, issue a solicitation that reserves an option for the government to perform a realism analysis without committing to doing so, believing that it is within their discretion to do so as long as the FAR, statute, or regulation does not prohibit it.
B. Conflicting Precedent Within GAO’s Decisions
While GAO generally follows its own prior bid protest decisions, scrutiny of decisions has revealed instances where GAO has seemingly established more than one precedent. One example of conflicting precedent appears in GAO decisions interpreting the statutory definition of “interested party.” Another example is GAO decisions regarding whether an agency properly engaged in discussions, which appear to provide three possible standards in accordance with the definition provided in FAR part 15. Examining these GAO decisions can provide valuable insight into aspects of statutes or regulations that may be confusing to contracting officers or contractors. These GAO decisions can serve as a road map for law makers and regulators seeking to clarify or revise problematic language in a statute or regulation.
1. Differences in GAO Decisions Regarding Unstated Evaluation Criteria
Ralph Nash recently explored the topic of unstated evaluation criteria in GAO protests and found that GAO has established two different standards in their decisions: the first is “whether the solicitation reasonably informs vendors of the basis for the evaluation,” and the second is whether the evaluation is “reasonably related to or encompassed by the stated criteria” in the solicitation. It may be a matter of semantics, but the first “asks whether offerors could perceive the unstated criteria from the solicitation language,” while the second “asks whether the unstated criteria are ‘reasonably related’ to the solicitation language.” GAO has stated the second standard a myriad of ways: “intrinsic to, or reasonably subsumed within”; “reasonably related to or encompassed by”; and “a clear nexus between the stated and unstated criteria” are all, according to GAO, the same standard. Even assuming these three phrases have the same meaning, the GAO’s decisions have shown that they are not the same as the standard requiring that “the solicitation reasonably informs vendors of the basis for the evaluation.”
2. Three Different Standards from GAO Decisions Regarding Discussions
Discussions is another area in which GAO has imposed more than one standard. The FAR’s guidance on discussions makes it clear that, notwithstanding any requirements stated in FAR 15.306(d), it is ultimately the CO’s decision whether to conduct discussions and how much to discuss. Despite significant guidance in the FAR, source selection discussions are seemingly laden with pitfalls, and COs often struggle with them.
Three main standards have emerged. The first indicates that agencies only need to generally lead offerors to areas within their proposal that require changes or improvement. The second requires the government to be as specific as possible when advising offerors of the shortcomings in their proposal and requires COs to disclose every deficiency in an offeror’s proposal. The third states that discussions are specific to each procurement and the level of specificity required depends on the level of specificity of the requirement but discussions must be equal. While the first standard appears in more of the GAO’s recent decisions, GAO has not revoked any decisions or distinguished facts for applying specific standards.
GAO tends to apply standards from prior decisions when reviewing a protest involving similar facts. The GAO’s decisions will often cite to or directly quote a prior decision, providing consistent guidance. Conversely, the decisions where GAO has provided conflicting guidance create an additional concern because it leaves COs unclear as to which standard applies to which facts.
C. When GAO and the Court of Federal Claims Disagree
The problem becomes more complex when factoring in that GAO and COFC do not always agree. While COs have significant leeway to decide how to conduct a procurement, many COs are strongly opposed to taking actions that could directly result in a protest. When GAO and COFC decisions conflict, COs often find themselves with no clear path forward. In these instances, there is often no advice from a skilled acquisition attorney or senior leader that can resolve the problem of having to choose between two or more possible courses of action, any of which could potentially lead to a sustained protest.
1. Different Decisions Regarding “Late” Emailed Proposals
According to the FAR, emailed proposals that do not arrive in the CO’s inbox by the required date and time stated in the solicitation are late and should not be considered for award. The FAR provides exceptions allowing acceptance in certain limited circumstances. GAO and COFC have interpreted the FAR provision regarding late email proposal submissions differently.
GAO has issued numerous decisions stating that the Electronic Commerce exception applies to emailed proposals, but the Government Control exception does not. COFC views the regulation differently, identifying the critical questions as first, defining where the designated location for the receipt of proposals was and, second, whether the proposal had “reached” or was “received” at the designated location prior to the closing date and time for the proposals. COFC has noted that the court “must walk a fine line” in deciding late proposal receipt protests because too broad an interpretation can undermine the purpose of the rule that “late is late,” but too narrow a reading risks introducing “unfairness and arbitrariness” into the procurement process, which could unduly limit competition.
2. Different Decisions Regarding “Key Personnel” Requirements
COFC recently decided a case where GAO previously issued a decision regarding key personnel becoming unavailable. In Golden IT, one COFC judge has declined to follow the line of GAO decisions requiring offerors to tell the Government when key personnel become unavailable after the submission of proposals. The Golden IT decision stated that the court “will not conjure up a rule—and particularly not one untethered from a statute, regulation, or Federal Circuit decision—requiring offerors . . . to routinely update the government when facts and circumstances change post-proposal . . . submission, during the course of the government’s evaluation period.” COFC’s decision noted that the court was “unable to locate the basis for the GAO’s rule” and found the GAO’s rule to be “without legal basis and ‘unfair,’” noting that the rule had not been published in the Federal Register and that the public had not been provided with opportunity to comment.
Splits between GAO and COFC cause additional uncertainty and confusion in an already difficult area of procurement. The Golden IT decision not only splits with the GAO’s long-standing reasoning, but it also provides clear notice that COFC is aware some GAO decisions create rules that are not stated in statutes, EOs, regulations, or federal court decisions. The wording of this statement draws a clear distinction between federal circuit decisions and GAO decisions and may provide insight into COFC’s view of what should or should not be considered “case law” under FAR 1.102(d). Additionally, because the decisions of one COFC judge are not binding on other COFC judges, it is unclear whether other COFC judges will continue to follow the GAO’s long-established rule or will issue future decisions aligned with the reasoning in the Golden IT case.
V. The Problem of Finding the Hidden Rules in GAO Decisions
The guidance provided in the GAO’s decisions is based on applying a legal analysis to the facts of a particular protest. Once GAO decisions are located, finding guidance requires searching to find relevant decisions and then determining whether the facts in the decision are similar to or distinguishable from the facts that prompted the research.
A. Researching GAO Decisions
The desired result when researching GAO decisions is a clearer understanding of a specific topic and of how GAO has addressed those specific topics, primarily those related to solicitations, source selections, award decision documentation, and debriefings.
The GAO’s decisions are published on its website, which has a keyword search option allowing users to narrow the number of decisions to be reviewed. However, not every topic has a pinpointed FAR citation that can be searched and key word searches are likely to yield a high number of results. In addition to the search features not being configured to permit in-depth research on a particular topic, there is no mechanism to eliminate obsolete decisions.
An Internet search for GAO bid protest decisions returns thousands of results, including multiple articles, blogs, and other content explaining GAO and COFC bid protest decisions. The underlying goal of providing this free information to the public is to solicit additional business for law firms, not to provide comprehensive advice to COs or anyone else regarding the rules that GAO has created in a recent bid protest decision.
Commercial solutions provide search features not available on the GAO’s website, but the tools are designed for attorneys. Getting useful results requires training and practice and providing subscriptions to these tools for all COs would be prohibitively expensive.
The option of using artificial intelligence (AI) to search for relevant GAO decisions and other applicable case law has garnered increased attention as various AI tools are becoming increasingly user friendly and mainstream. A recent interview with an attorney who has attempted to use ChatGPT to research bid protest decisions revealed a puzzling result. Using ChatGPT to search for GAO decisions on a particular topic caused the AI to return results for cases that are unpublished or do not actually exist. This phenomenon was repeated on multiple occasions for different bid protest topic searches. While the reason that these results were provided by ChatGPT is not clear, it is clear that using AI to search through hundreds of GAO decisions for a particular topic is not yet a viable solution to this problem. Regardless of the method used, even if a CO is able to find all of the decisions relevant to a particular topic, and is certain all of the outdated or irrelevant decisions have been eliminated, still another hurdle must be overcome: reading and interpreting the decisions.
1. Most Contracting Officers Are Not Attorneys (and May Not Understand How to Apply the GAO’s Decisions)
Prior to CICA, procurement was not a recognized government profession, and minimum qualifications or standards did not exist for COs. Government COs are now required to have a bachelor’s degree, and many COs have at least some graduate-level education or a graduate degree. But even in the current well-educated acquisition workforce, most COs are not attorneys and are not trained to understand and interpret legal opinions. GAO decisions are written by attorneys and are almost always written in response to complex legal arguments made in briefs submitted by attorneys for the protester and the government. This means that understanding the GAO’s decisions requires a basic understanding of certain legal parlance and terms of art. Reading a single GAO case can be difficult for someone unfamiliar with reading legal writing. Skimming through numerous cases to find the relevant ones is an even more difficult task. When a relevant decision is located, familiarity with the structure of GAO decisions is necessary to quickly ascertain the usefulness of the particular decision in comparison with the topic being researched. These numerous hurdles to researching, understanding, and keeping up to date with the various GAO decisions lead COs to rely heavily on their government attorney advisors to navigate the traps and pitfalls lurking in GAO decisions, especially when a GAO decision creates a “rule” or standard that is not expressly stated in statutes or regulations.
B. The Government Attorney’s Role in Acquisition
Contract attorneys are not officially part of the acquisition workforce but are vital members of the acquisition team, bringing a unique set of skills to the procurement process. Attorneys advising COs and other members of the acquisition team assist them in detecting, avoiding, and resolving problems and potential pitfalls throughout the acquisition process.
An article published sixty years ago pointed out that “[l]itigation stemming from the tremendous amount of Government contracting has posed many and varied interesting problems.” The number of government-specific rules and regulations that a government contracts attorney must learn and understand has multiplied over the years, creating a tome of government procurement specific laws that government procurement attorneys must understand to effectively advise the acquisition workforce. Given the wide range of practice areas expected of many government attorneys, the attorneys advising COs are not always specialists or experts in procurement.
VI. Proposed Solutions
Since not all COs have the skills and knowledge to find the information themselves or have an attorney advisor who specializes in federal procurement law, a solution is needed to address the gap between what a CO knows and what they need to know about GAO bid protest decisions. Critical thinking is an essential element in a CO’s job. When a CO is not aware of, and unable to consider, all of the relevant rules and guidance, they are forced to solve a puzzle that is missing critical pieces. This clearly increases risk and may increase protests.
A. Temporary Solutions
Several available options may help to close this knowledge gap. In the near term, one option is to provide additional resources to COs to increase their awareness of the GAO decisions that may be relevant to, or have an impact on, the decisions that they make. One option is to create a searchable guide that includes plain-language summaries of GAO decisions, links to actual GAO decisions, and an overview of lessons learned. This guide would need to be easily accessible, available on demand, and updated regularly. Ideally, the guide would be organized by FAR part and searchable by key word or protest topic.
Another option would be to create training classes that provide an overview of the most common lessons learned from GAO decisions, in plain language, focusing on relevant information not covered in the FAR. To better meet the needs of the contracting workforce, the training could be created in two parts: an initial in-depth course and a shorter supplemental course, for those who have already taken the initial course, providing only the relevant changes from the preceding year. The training could potentially be developed by or in partnership with Defense Acquisition University and Federal Acquisition Institute.
A third option would be to rely on training developed by a non-government entity, such as National Contract Management Association. Both the tool and the training would need to be developed with contracting professionals as the target audience, not attorneys, and would require regular updates. Providing these types of tools and training would provide a quicker, easier, and more accessible option to COs to close these critical gaps in knowledge.
B. Addressing the Real Problem
When GAO makes a decision that creates an unofficial rule for government procurement, the fact that it is difficult for COs to find and follow is only part of the issue. The other part of the problem is that the GAO’s decisions have no public input. The GAO’s bid protest opinions are advisory in nature, and the recommendations are not binding on agencies, but Congress requires GAO to report agencies that do not to follow recommendations. This arrangement acts as a forcing function, making it a pseudo mandate to follow the recommendations in the GAO’s decisions despite the assertion that they are advisory only. By following precedent from prior opinions in subsequent bid protest decisions, GAO has created a set of unofficial rules that are not found in a statute or regulation but, in some instances, must be followed as if they were. This use of unofficial rules goes against the requirement for public input into the rules put in place by all three branches of government.
It is overtly stated and unambiguous that statutes and regulations are mandatory and must be followed by government contracting professionals. Written statutes typically provide clear, consistent guidance that can be relied on by COs when making decisions regarding solicitation content, methods for conducting source selections, writing award decisions, creating debriefings, and awarding a contract. Congress is publicly elected. Congressional committee and floor discussions are a matter of public record, making the process transparent. Congress often includes requirements in statutes for agencies to promulgate regulations to provide implementing guidance EOs, which have at times had a significant impact on government procurement, are written by the President who is also a publicly elected official. Regulations are promulgated by agencies to provide policies and procedures. Before a final regulation is published and becomes effective, a draft of the proposed regulation is posted in the Federal Register, and a comment period is provided to obtain public opinion. These processes exist specifically to counterbalance the fact that regulations are written by employees of executive branch agencies who are not publicly elected. Since the general public does not have an opportunity to select the people who will write the regulations, the public is given an opportunity to provide comments on the regulations themselves before they are made final.
While bid protest decisions are always decided without public input, there is a significant distinction related to public input into the person making the decision in a COFC bid protest decision and a GAO bid protest. COFC judges are appointed by the President and confirmed by the Senate before sitting on the court. Appointment by a publicly elected official and additional scrutiny by numerous other publicly elected officials provides the general public a role, even if it is at least once removed, in the process of selecting who will make the decisions. For both statutes and COFC bid protest decisions, the drafter of the document is selected, directly or indirectly, by the public. The GAO attorneys who decide bid protests are hired without any public input or selection process, and GAO issues bid protest decisions without public input.
One solution that could be explored would be imposition of an approval process for those writing GAO decisions that is similar to the confirmation process required for COFC judges. However, a solution focused on the rulemaking process is probably a more realistic option and would be easier to implement.
To initiate the rule making process, topics that could be addressed by making a change to the FAR or an agency FAR supplement would need to be identified. One method of doing this would be to convene a panel or committee in the executive branch to review published GAO decisions, focusing primarily on decisions that have created standards or rules that are outside of the written guidance in the FAR, to identify topics that could be addressed by amending the FAR. The Procurement Policy and Attorney Roundtable (PPAR) is a potential option for performing this function, given that the PPAR already exists and already performs functions that are closely related to these recommended reviews. Once a topic is identified, a proposed rule could be written and submitted for consideration. A proposed rule might seek to codify a standard from a particular GAO decision or change the FAR to provide guidance counteracting an undesirable standard imposed by the GAO’s decisions on a particular topic. These proposed rules would be subject to the same requirements and opportunities for public comment as any other proposed rule, resolving the need for public comment on many of the standards imposed by GAO that are not yet stated in regulation. The ultimate goal would be for as many of the standards stated in the GAO’s decisions to be addressed in regulation in order to provide clear, accessible guidance to acquisition professionals.
VII. Conclusion
GAO decisions often create rules that are followed to nearly the same degree as statutes, EOs, and regulations and are often given similar deference. GAO decisions, however, are much harder for COs to find, read, and understand than statutes and regulations. This difficulty fundamentally undermines the intent of the FAR to create a single source for all acquisition regulations that is written in a simple, easy to understand language and creates an untenable situation for COs who are unaware of these additional rules. Codification of the standards created by GAO decisions would permit public participation and comment during the regulation process and provide clearer, more consistent guidance on topics where the FAR has left room for interpretation that is currently being filled by standards created in the GAO’s bid protest decisions.
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