This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

75878

Vol. 69, No. 243

Monday, December 20, 2004

1Effective July 7, 2004, the agency’s legal name 

became the Government Accountability Office 

pursuant to Pub. L. 108–271, 118 Stat. 811. GAO 

will amend title 4, chapter I of the CFR to reflect 

the name change.

GOVERNMENT ACCOUNTABILITY 

OFFICE 

4 CFR Part 21

Government Accountability Office, 

Administrative Practice and Procedure, 

Bid Protest Regulations, Government 

Contracts

AGENCY: Government Accountability 

Office.1

ACTION: Proposed rule.

SUMMARY: The Government 

Accountability Office (GAO) is 

proposing to amend its Bid Protest 

Regulations, promulgated in accordance 

with the Competition in Contracting Act 

of 1984 (CICA), 31 U.S.C. 3551–3556, to 

implement the requirements in the 

Ronald W. Reagan National Defense 

Authorization Act for Fiscal Year 2005, 

Pub. L. 108–375, 118 Stat. 1811, enacted 

on October 28, 2004. The proposed 

amendments to GAO’s Bid Protest 

Regulations implement the legislation’s 

provisions related to the bid protest 

process, where a public-private 

competition has been conducted under 

Office of Management and Budget 

(OMB) Circular A–76, as revised on May 

29, 2003, regarding an activity or 

function of a Federal agency performed 

by more than 65 full-time equivalent 

employees of the Federal agency. In this 

regard, the legislating grants designated 

representatives of an in-house 

competitor the status of an ‘‘interested 

party’’ to file a protest at GAO or the 

status of an ‘‘intervenor’’ to participate 

in a protest filed at GAO. In addition, 

consistent with the legislation, GAO is 

proposing to add a provision to its Bid 

Protest Regulations stating that GAO 

will not review the decision of an 

agency tender official to file a protest (or 

not to file a protest) in connection with 

a public-private competition. At this 

time, GAO believes that these proposed 

revisions are the only regulatory 

changes necessary to implement the 

statutory requirements expanding the 

definitions of an interested party and an 

intervenor in protests involving publicprivate competitions. GAO welcomes 

comments on these proposed revisions, 

as well as suggestions for changes to 

other areas of GAO’s Bid Protest 

Regulations or the bid protest process at 

GAO relating to protests of publicprivate competitions conducted under 

OMB Circular A–76.

DATES: Comments must be submitted on 

or before February 18, 2005.

ADDRESSES: Comments may be 

submitted by e-mail at 

RegComments@gao.gov, or by facsimile 

at (202) 512–9749. Due to delivery 

delays, submission by regular mail is 

discouraged. Comments may be sent by 

Federal Express or United Parcel 

Service addressed to: Michael R. 

Golden, Assistant General Counsel, 

Government Accountability Office, 441 

G Street, NW., Washington, DC 20548. 

GAO intends to make all comments 

filed available to the public, including 

names and other identifying 

information. Information in a 

submission that the sender does not 

believe should be released should be 

clearly marked.

FOR FURTHER INFORMATION CONTACT:

Daniel I. Gordon (Managing Associate 

General Counsel), Michael R. Golden 

(Assistant General Counsel) or Linda. S. 

Lebowitz (Senior Attorney), (202) 512–

9732.

SUPPLEMENTARY INFORMATION: On June 

13, 2003, GAO published a notice in the 

Federal Register, 68 FR 35411, which 

sought comments on a number of issued 

concerning the effect of OMB’s revisions 

to Circular A–76 (revised Circular), 

which governs how Federal agencies 

determine whether to transfer 

performance of commercial activities 

from the public to the private sector, or 

vice versa. Performance of Commercial 

Activities, 68 FR 32134 (May 29, 2003). 

These revisions make competitions 

involving in-house competitors more 

similar to private-private competitions 

conducted under the Federal 

Acquisition Regulation (FAR) than has 

previously been the case with the 

competitive sourcing process. GAO 

specifically solicited comments 

regarding two key legal questions, 

namely, whether the revisions made to 

the Circular affect the standing of an inhouse competitor to file a protest at 

GAO and, if so, who should have the 

representational capacity to file such a 

protest. The notice also solicited 

comments on other procedural issues 

raised by the Circular’s revisions. 

In response to this notice, GAO 

received a total of 71 sets of comments: 

1 letter from three members of Congress; 

9 letters from agencies; 5 letters from 

unions; 7 letters from associations; 47 

letters from individuals (including 

Federal employees); and 2 letters from 

private lawyers. Some of those 

submitting comments argued that no 

one has standing to protest on behalf of 

an in-house competitor without an 

amendment to CICA, which provides 

the statutory framework for GAO’s bide 

protest function; others contended that 

the 2003 revisions to the Circular 

justified GAO finding that individual 

Federal employees and their unions 

now had standing to file protests 

without the need to amend CICA. GAO 

also received comments concerning a 

number of other procedural issues 

including, for example, the requirement 

to exhaust the administrative appeal 

process before filing a protest a GAO, 

the authority for GAO to review 

streamlined competitions involving 65 

or fewer full-time equivalent employees, 

and the applicability of GAO’s 

protective order procedures.

GAO carefully considered the 

comments received and ultimately 

addressed the in-house competitor 

standing issue in Dan Duefrene; Kelley 

Dull; Brenda Neuerburg; Gabrielle 

Martin, B–293590.2 et al., April 19, 

2004, CPD ¶ 82. In that decision, GAO 

concluded that, notwithstanding the 

May 29, 2003 revisions to OMB Circular 

A–76, the in-house competitor in a 

public-private competition conducted 

under the Circular was not an offeror 

and, therefore, under the current 

language of CICA, no representative of 

an in-house competitor was an 

interested party eligible to maintain a 

protest before GAO. 

On the same day that the decision 

Dan Deufrene, et al. was issued, the 

Comptroller General sent a letter to the 

cognizant congressional committees, 

explaining that, based on GAO’s legal 

analysis of its statutory authority to 

decide bid protests under CICA, because 

an in-house competitor did not meet the 

current CICA definition of an interested 

party, GAO was required to dismiss any

Federal Register / Vol. 69, No. 243 / Monday, December 20, 2004 / Proposed Rules 75879

protest filed by an in-house competitor. 

In the letter, the Comptroller General 

recognized that policy considerations, 

including the principles unanimously 

agreed to by the congressionallychartered Commercial Activities Panel, 

weighed in favor of allowing certain 

protests by in-house competitors with 

respect to A–76 competitions and, as a 

result, Congress might want to consider 

amending CICA to allow GAO to decide 

such protests. Consistent with that 

letter, the National Defense 

Authorization Act for Fiscal Year 2005 

amended GAO’s statutory authority 

under CICA to decide protests filed by 

in-house competitors. 

The proposed revisions to GAO’s Bid 

Protest Regulations to implement the 

National Defense Authorization Act for 

Fiscal Year 2005 are set forth below: 

Interested Party 

In accordance with sec. 326(a) of the 

National Defense Authorization Act for 

Fiscal Year 2005, GAO proposes to add 

a new paragraph to paragraph (a) of 4 

CFR 21.0 to expand the definition of an 

interested party to include the official 

responsible for submitting the Federal 

agency tender in a public-private 

competition conducted under OMB 

Circular A–76 regarding an activity or 

function of a Federal agency performed 

by more than 65 full-time equivalent 

employees of the Federal agency. 

Intervenor 

In accordance with sec. 326(c) of the 

National Defense Authorization Act for 

Fiscal Year 2005, GAO proposes to add 

a new paragraph to paragraph (b) of 4 

CFR 21.0 to expand the definition of an 

intervenor to include a person 

representing a majority of the employees 

of the Federal agency who are engaged 

in the performance of the activity or 

function subject to the public-private 

competition conducted under OMB 

Circular A–76 regarding an activity or 

function of a Federal agency performed 

by more than 65 full-time equivalent 

employees of the Federal agency. In 

addition, based on the proposed 

expansion of the definition of an 

interested party, GAO proposes to revise 

paragraph (b) of 4 CFR 21.0 to expand 

the definition of an intervenor to 

include the official responsible for 

submitting the Federal agency tender. 

Issues Not for GAO Review 

In accordance with sec. 326(b) of the 

National Defense Authorization Act for 

Fiscal Year 2005, GAO is proposing to 

add a new paragraph to 4 CFR 21.5 to 

reflect that GAO will not review the 

decision of an agency tender official to 

file a protest (or not to file a protest) in 

connection with a public-private 

competition.

These proposed revisions reflect the 

only language in sec. 326 of the National 

Defense Authorization Act for Fiscal 

Year 2005 that directly amends GAO’s 

bid protest authority under CICA. GAO 

does not believe that any other 

regulatory revisions are required at this 

time. GAO solicits comments on these 

proposed revisions, as well as 

suggestions for changes to other areas of 

GAO’s Bid Protest Regulations or GAO’s 

bid protest relating to A–76 protests 

under the revised Circular, including, 

for example, the applicability of GAO’s 

protective order procedures. Prior to 

issuing final regulations, GAO will 

determine, based on the comments 

received in response to this notice of 

proposed rulemaking, whether 

additional revisions to GAO’s Bid 

Protest Regulations are warranted. GAO 

also will consider whether any changes 

to the bid protest process in the context 

of GAO’s considerations of A–76 

protests under the revised Circular are 

required and, if so, the most appropriate 

means of publicizing these changes, for 

example, by revising GAO’s Bid Protest 

Descriptive Guide. 

Other Procedural Matters 

With reference to the responses GAO 

received to its notice of June 13, 2003, 

GAO believes that it is appropriate here 

to address two issues raised in that 

notice—whether GAO would continue 

to apply the requirement that the 

protester first exhaust the administrative 

appeal process before filing its protest at 

GAO and whether GAO would hear 

protests of streamlined competitions 

authorized by the revisions to OMB 

Circular A–76. GAO notes that there 

was virtual unanimity from commenters 

concerning the resolution of these two 

issues. 

GAO had a longstanding rule that it 

would generally not hear a protest 

regarding an A–76 cost comparison 

until the unique A–76 administrative 

appeal process provided by the agency 

was exhausted. GAO’s position was 

based on considerations of comity and 

efficiency, and GAO recognized that 

there was no statutory or regulatory 

requirement that an offeror exhaust 

available agency-level remedies before 

protesting to GAO. The revised Circular 

abolished the unique A–76 

administrative appeal process, instead 

providing that a directly interested party 

could contest at the agency various 

aspects of a standard competition and 

that the resolution of such contest by 

the agency would be governed by the 

procedures in FAR Subpart 33.103, 

which describe the agency-level bid 

protest process. 

Under GAO’s Bid Protest Regulations 

with the exception of the exhaustion 

rule GAO imposed for A–76 protests, a 

protester has never been required to file 

an agency-level protest before filing a 

protest at GAO. In light of the fact that 

the revised Circular abolishes the 

unique A–76 administrative appeal 

process and in accordance with the 

consensus view of the commenters, 

GAO has decided that it will not apply 

the exhaustion requirement to protests 

filed at GAO challenging A–76 

competitions conducted under the 

revised Circular. In other words, 

protests concerning A–76 competitions 

under the revised Circular will be 

treated just like any other protest filed 

at GAO. Accordingly, as with non-A–76 

protests, while a prostester challenging 

an A–76 competition may elect to seek 

resolution of its protest at the agency in 

the first instance, GAO will not require 

the protester to file an agency-level 

protest as a prerequisite to filing a 

protest at GAO. 

Regarding streamlined competitions, 

i.e., competitions under the process 

reserved by the revised Circular for 

functions involving 65 or fewer fulltime equivalent employees, the revised 

Circular states that no party may contest 

any aspect of the competition. In Vallie 

Bray, B–293840, B–293840.2, Mar. 30, 

2004, 2004 CPD ¶ 52, GAO addressed 

the protest of a streamlined competition 

conducted under the revised Circular. 

GAO concluded that, where a 

streamlined competition is conducted 

without using the procurement 

system—that is, without a solicitation 

being issued—GAO lacks jurisdiction 

under CICA to consider a protest. If, 

however, an agency issues a solicitation 

as part of a streamlined A–76 

competition, thereby using the 

procurement system to determine 

whether to contract out or to perform 

work in-house, GAO would consider a 

protest by an interested party alleging 

that the agency had not complied with 

the applicable procedures in the 

selection process or that the agency had 

conducted an evaluation that was 

inconsistent with the solicitation’s 

evaluation criteria or applicable statutes 

and regulations. GAO intends to follow 

the Vallie Bray precedent with respect 

to protests of streamlined competitions 

conducted under the revised Circular.

List of Subjects in CFR Part 21

Administrative practice and 

procedure, Bid protest regulations, 

Government contracts.

For the reasons set out in the 

preamble, title 34, chapter I, subchapter 

75880 Federal Register / Vol. 69, No. 243 / Monday, December 20, 2004 / Proposed Rules 

B, part 21 of the Code of Federal 

Regulations is proposed to be revised to 

read as follows:

PART 21—BID PROTEST 

REGULATIONS 

1. The authority citation for part 21 

continues to read as follows:

Authority: 31 U.S.C. 3551–3556.

2. Amend § 21.0 by redesignating 

paragraph (a) as paragraph (a)(1) and 

adding new paragraph (a)(2), and by 

redesignating paragraph (b) as paragraph 

(b)(1) and adding new paragraph (b)(2) 

to read as follows:

§ 21.0 Definitions. 

(a)(1) * * *

(a)(2) In a public-private competition 

conducted under Office of Management 

and Budget Circular A–76 regarding an 

activity or function of a Federal agency 

performed by more than 65 full-time 

equivalent employees of the Federal 

agency, the official responsible for 

submitting the Federal agency tender is 

also an interested party.

(b)(1) * * *

(b)(2) If an interested party files a 

protest in connection with a publicprivate competition conducted under 

Office of Management and Budget 

Circular A–76 regarding an activity or 

function of a Federal agency performed 

by more than 65 full-time equivalent 

employees of the Federal agency, a 

person representing a majority of the 

employees of the Federal agency who 

are engaged in the performance of the 

activity or function subject to the 

public-private competition and the 

official responsible for submitting the 

Federal agency tender as described in 

paragraph (a)(2) of this section may also 

be intervenors.

* * * * *

3. Amend § 21.5 by adding paragraph 

(k) to read as follows:

§ 21.5 Protest issues not for 

consideration. 

(k) Decision whether or not to file a 

protest on behalf of Federal employees.

GAO will not review the decision of an 

agency tender official to file a protest or 

not to file a protest in connection with 

a public-private competition.

Anthony H. Gamboa, 

General Counsel, United States Government 

Accountability Office.

[FR Doc. 04–27615 Filed 12–16–04; 10:03 

am] 

BILLING CODE 1610–02–M

DEPARTMENT OF AGRICULTURE

Agricultural Research Service 

7 CFR Part 500 

National Arboretum

AGENCY: Agricultural Research Service; 

Research, Education, and Economics; 

USDA.

ACTION: Proposed rule.

SUMMARY: The Department of 

Agriculture (USDA) seeks comments on 

a proposed rule change that would 

modify the rules of conduct at the 

United States National Arboretum 

(USNA) and the schedule of fees to be 

charged for certain uses of the facilities, 

grounds, and services at the USNA.

DATES: Comments must be submitted on 

or before February 18, 2005.

ADDRESSES: Address all correspondence 

to Thomas S. Elias, Director, U.S. 

National Arboretum, Beltsville Area, 

Agricultural Research Service, 3501 

New York Avenue, NE., Washington, DC 

20002.

FOR FURTHER INFORMATION CONTACT:

Dana Laster, Administrative and 

Marketing Manager, U.S. National 

Arboretum, Beltsville Area, ARS, 3501 

New York Avenue, NE., Washington, DC 

20002; (202) 245–4539.

SUPPLEMENTARY INFORMATION:

Classification 

This rule change has been reviewed 

under Executive Order 12866, and it has 

been determined that it is not a 

‘‘significant regulatory action’’ rule 

because it will not have an annual effect 

on the economy of $100 million or more 

or adversely and materially affect a 

sector of the economy, productivity, 

competition, jobs, the environment, 

public health or safety, or State, local, 

or Tribal governments or communities. 

This rule change will not create any 

serious inconsistencies or otherwise 

interfere with actions taken or planned 

by another agency. It will not materially 

alter the budgetary impact of 

entitlements, grants, user fees, or loan 

programs, or the rights and obligations 

of recipients thereof, and does not raise 

novel legal or policy issues arising out 

of legal mandates, the President’s 

priorities, or principles set forth in 

Executive Order 12866. 

Regulatory Flexibility Act 

The Department of Agriculture 

certifies that this rule change will not 

have a significant impact on a 

substantial number of small entities as 

defined in the Regulatory Flexibility 

Act, Pub. L. No. 96–354, as amended (5 

U.S.C. 601, et seq.). 

Paperwork Reduction Act 

In accordance with the Office of 

Management and Budget (OMB) 

regulations (5 CFR part 1320) which 

implement the Paperwork Reduction 

Act of 1995, Pub. L. 104–13, as amended 

(44 U.S.C. chapter 35), the information 

collection and recordkeeping 

requirements that have been imposed in 

the management of these programs have 

been approved by OMB and assigned 

OMB control number 0518–0024 for the 

use of facilities or the performance of 

photography/cinematography at the 

USNA. 

Background 

Section 890(b) of the Federal 

Agriculture Improvement and Reform 

Act of 1996, Pub. L. 104–127 (1996 Act) 

expanded the authorities of the 

Secretary of Agriculture to charge 

reasonable fees for the use of USNA 

facilities and grounds. These authorities 

included the ability to charge fees for 

temporary use by individuals or groups 

of USNA facilities and grounds 

consistent with the mission of the 

USNA. In addition, authority was 

granted to charge fees for the use of the 

USNA for commercial photography and 

cinematography. Pursuant to the Act, 

the Agricultural Research Service (ARS) 

promulgated a fee schedule for the 

USNA at 7 CFR part 500, subpart B. All 

rules and regulations noted in 7 CFR 

part 500, subpart A, Conduct on the U.S. 

National Arboretum Property, also 

apply to individuals or groups granted 

approval to use the facilities and 

grounds. 

This proposed rule change modifies 7 

CFR part 500, subparts A and B. The 

USNA will continue to charge fees for 

riding its tram service, for use of the 

grounds and facilities, and for 

photography and cinematography. The 

USNA will allow use of its facilities and 

grounds for activities such as 

luncheons, dinners, receptions, and 

similar events in order to provide 

financial support to the USNA. The 

Director of the USNA will continue to 

have discretion to waive fees for nonprofit scientific or educational 

organizations the purposes and interests 

of which are complementary to the 

mission of the USNA, such as the 

Friends of the National Arboretum, the 

National Bonsai Foundation, and the 

National Capital Area Federation of 

Garden Clubs. Even in cases of fee 

waiver, however, the USNA will seek to 

recover costs incurred in connection 

with use of its facilities. Fees generated 

will be used to defray USNA expenses