In an article published by National Defense Magazine, Bass, Berry & Sims attorneys Richard Arnholt and Sylvia Yi provided insight on the significant changes affecting defense contractors from the National Defense Authorization Act (NDAA) for fiscal year 2018, specifically concerning bid protests.
There are two significant big protest changes in the new NDAA:
- the introduction of a new three-year pilot program in which large defense contractors will be required to pay the Department of Defense’s costs where a protest is denied by the Government Accountability Office (GAO); and
- the enhancement of post-award debriefing rights.
“While Congress passed the former with the intent of reducing frivolous protests, it is likely the latter – which will give contractors greater insight into the rationale behind procurement decisions – that will have greater impact on the number of protests filed,” the authors wrote.
The loser-pays provision is limited to protests by “large contractors” – defined to be revenues in excess of $250 million – that are “denied in an opinion” by GAO, thus meaning it will most likely only apply to a small number of protests and will not have Congress’ desired effect of limiting frivolous protests. The pilot program is scheduled to go into effect on October 1, 2019.
The second significant change to the NDAA is implementing Section 818, which builds on an existing Air Force program that gave unsuccessful offerors an opportunity to request an “extended debriefing.” This allows an unsuccessful offeror’s outside counsel to review the agency’s redacted source selection documents and ask questions. The NDAA will expand this program for “extended debriefings” by requiring a revision of the DoD acquisition regulations to apply the extended debriefing requirements across the department.
There are three significant enhancements to this program under the NDAA. “First, contractors are entitled to a debriefing for all contracts and task orders valued at $10 million or higher. Second, the agency is required to disclose its redacted source selection for contracts in excess of $100 million. Third, contractors are provided an opportunity to ask follow-up questions after a debriefing,” Richard and Sylvia explained . A proposed rule implementing these changes is due in March, and Congress gave a deadline of six months from the date of enactment to implement all the changes.
“The ultimate impact of these changes will depend on the regulations issued to implement the NDAA provisions, so contractors should carefully monitor developments over the coming year.”
The full article, “Contractors Face Changes to Bid Protest Strategies,” was published on March 6, 2018, by National Defense Magazine and is available online.