[Federal Register Volume 61, Number 85 (Wednesday, May 1, 1996)]
[Proposed Rules]
[Pages 19205-19211]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10831]



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Proposed Rules
                                                Federal Register
________________________________________________________________________

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.

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Federal Register / Vol. 61, No. 85 / Wednesday, May 1, 1996 / 
Proposed Rules

[[Page 19205]]



GENERAL ACCOUNTING OFFICE

4 CFR Part 21


General Accounting Office, Administrative Practice and Procedure, 
Bid Protest Regulations, Government Contracts

AGENCY: General Accounting Office.

ACTION: Proposed rule.

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SUMMARY: The General Accounting Office (GAO) is proposing to revise its 
Bid Protest Regulations to implement the requirement in the National 
Defense Authorization Act for Fiscal Year 1996 that GAO, for new 
protests filed on or after August 8, 1996, issue bid protest decisions 
within 100 calendar days from the time a protest is filed at GAO. The 
proposed revision will facilitate GAO's meeting the new statutory 
deadline for issuing bid protest decisions and will improve the overall 
effectiveness of the bid protest process at GAO.

DATES: Comments must be submitted on or before July 1, 1996.

ADDRESSES: Comments should be addressed to: Michael R. Golden, 
Assistant General Counsel, General Accounting Office, 441 G Street, 
NW., Washington, DC 20548.

FOR FURTHER INFORMATION CONTACT: Michael R. Golden (Assistant General 
Counsel) or Linda S. Lebowitz (Senior Attorney), 202-512-9732.

SUPPLEMENTARY INFORMATION: On February 21, 1996, the General Accounting 
Office (GAO) published an advance notice of proposed rulemaking (61 FR 
6579) soliciting comments on how its bid protest procedures could be 
revised in order to facilitate GAO's meeting a new statutory deadline 
for issuing bid protest decisions, while also improving the overall 
effectiveness of the bid protest process at GAO. In this regard, the 
National Defense Authorization Act for Fiscal Year 1996, Pub. L. 104-
106, 110 Stat. 186, which was enacted on February 10, 1996, requires 
GAO, effective August 8, 1996, to issue bid protest decisions within 
100 calendar days from the time a protest is filed at GAO, shortening 
the current 125-calendar-day requirement. (Any further reference to 
``days'' means ``calendar days.'') In the advance notice, GAO 
specifically invited comments on changing its longstanding timeliness 
rule to permit the filing of a protest 5 days after a statutorily 
required debriefing, and on the feasibility of promoting early document 
production in appropriate cases to facilitate the expeditious 
resolution of bid protests. GAO also invited the submission of ideas 
regarding the appropriate length of regulatorily imposed deadlines, as 
well as suggestions concerning the use of accelerated or alternative 
procedures to more expeditiously resolve bid protests.
    Interested persons were invited to submit comments on GAO's advance 
notice by March 22, 1996. We received written comments from 10 Federal 
agencies, 2 bar associations, 2 law firms, 1 industry association, and 
2 vendors. In preparing this proposed rule, we have carefully 
considered all comments received. The commenters generally recognized 
the effectiveness of our previous efforts to streamline the bid protest 
process at GAO and to provide meaningful relief to vendors wrongfully 
excluded from procurements, as reflected in the final rule published on 
August 10, 1995 (60 FR 40737) and effective October 1, 1995. The 
commenters made suggestions on how GAO could improve the internal 
management of the bid protest process. While we are adopting many of 
the suggested management practices and we expect to implement others in 
the near future, we believe that regulatory implementation of such 
improvements is unnecessary. For example, we are focusing on promptly 
resolving early requests for partial or complete dismissals of 
protests. We are also establishing procedures to routinely issue 
protective orders, where warranted, shortly after a protest is filed.
    Significant proposed revisions to GAO's Bid Protest Regulations are 
set forth below.

Statutorily Imposed Deadlines

    In accordance with sec. 5501 of the National Defense Authorization 
Act for Fiscal Year 1996, GAO proposes to revise paragraph (c) of 
Sec. 21.3 to require a contracting agency to file its report in 
response to a protest with GAO within 30 days, as opposed to 35 days, 
after receiving telephone notice of the protest from GAO. GAO also 
proposes to revise paragraph (a) of Sec. 21.9 to require our Office to 
issue a decision on a bid protest within 100 days after the protest is 
filed with our Office.

Timeliness Rules

    Consistent with the suggestion of several commenters, GAO's 
proposed regulation at Sec. 21.2(a)(2) requires that protests, except 
those alleging a solicitation impropriety, filed under a procurement in 
which a debriefing is required by law be filed not later than 5 days 
after the debriefing; in all other cases, the protest is required to be 
filed within 10 days after the basis of protest is known or should have 
been known, whichever is earlier. (Wherever possible throughout this 
proposed rule in the interests of simplification and user-friendliness, 
GAO proposes to establish filing times using multiples of ``five'' 
days. For example, GAO has reduced the ``knew/should have known'' 
timeliness rule from 14 days to 10 days.) GAO believes that this 
proposed change to the timeliness rule will help to ensure the prompt 
and fair resolution of bid protests.
    Consistent with the suggestion of several commenters, GAO proposed 
to add a new paragraph (a)(4) to Sec. 21.2 which reduces the time for 
filing supplemental or amended protests from 14 days (pursuant to the 
current ``knew/should have known'' timeliness rule) to 5 days after the 
basis of protest is known or should have been known, whichever is 
earlier. GAO believes that this shortening of time will permit GAO to 
issue a consolidated decision resolving the supplemental or amended 
protests, usually based on information provided with the agency report, 
within the original 100-day period, thus avoiding rollover situations 
or the issuance of separate decisions.
    In paragraph (a)(3) of Sec. 21.2, GAO proposes to shorten the time 
for filing a protest based on initial adverse agency action on an 
agency-level protest from 14 days to 5 days. GAO agrees with those 
commenters who suggested this proposed revision, recognizing that in 
cases where there has been an agency-level protest, the protest issues 
are usually already developed.

[[Page 19206]]

Early Document Production

    In paragraph (d)(2) of Sec. 21.1, GAO proposes to add language 
requiring a protester to explain the relevancy of specifically 
requested documents to its protest grounds.
    GAO received numerous comments concerning early document production 
as a means of facilitating the prompt resolution of bid protests. As 
previously addressed in the final rule at 60 FR 40737, 40738, while GAO 
believes that early document production will promote the expeditious 
resolution of appropriate bid protests and will result in other system 
efficiencies, GAO also believes that early document production should 
be accomplished on a voluntary basis, with an agency assessing the 
value of such a procedure in a particular case. In this regard, in 
paragraph (c) of Sec. 21.3, GAO proposes to explicitly recognize that 
documents may be provided prior to the filing of the agency report or 
may otherwise be made available to the parties, such as by allowing 
parties to review documents on site at the agency prior to the filing 
of the report.
    GAO also proposes to add to paragraph (c) of Sec. 21.3 a 
requirement that 5 days prior to the filing of the agency report, in 
cases in which the protester has filed a request for specific 
documents, that the agency provide to all parties and GAO a list of 
those documents, or portions of documents, which the agency has 
released to the protester or intends to produce in its report, and 
those documents which the agency intends to withhold from the protester 
and the reasons for the proposed withholding. GAO further proposes to 
require that any objection to the scope of an agency's proposed 
disclosure or nondisclosure of documents be filed with GAO and the 
other parties within 1 day of receipt of this list.
    Throughout Sec. 21.3, GAO proposes to clarify the language to 
reflect the current longstanding practice that parties need not provide 
entire documents if only certain portions of these documents are 
relevant to the protest.
    Several commenters expressed concern that in light of the shortened 
timeframe for resolving bid protests, unsolicited submissions after the 
filing of comments on the agency report or hearing are particularly 
inappropriate. GAO proposes to address this concern by adding a 
sentence to the proposed Sec. 21.3(j), currently at Sec. 21.3(i), which 
states that the agency and other participating parties shall not submit 
any additional statements unless the statements are specifically 
requested by GAO or submitted after permission has been granted by GAO.

Other Regulatorily Imposed Deadlines

    To facilitate meeting the shortened statutory deadline for issuing 
bid protest decisions, GAO also proposes to reduce the following filing 
periods: in the proposed Sec. 21.3(g), currently at Sec. 21.3(f), the 
agency must respond to supplemental document requests within 2 days, as 
opposed to 5 days; in the proposed Sec. 21.3(h), currently at 
Sec. 21.3(g), when withheld documents are furnished, the protester's 
comments on the agency report are due within the original comment 
filing period, not 10 days after its receipt of the additional 
documents, unless GAO specifically grants an extension; and in the 
proposed Sec. 21.3(i), currently at Sec. 21.3(h), comments on the 
agency report are due within 10 days, as opposed to 14 days, after 
receipt of the report unless GAO specifically grants an extension. In 
paragraph (b) of Sec. 21.14, GAO proposes to shorten the time for 
filing requests for reconsideration (the resolution of such requests 
are not subject to statutory deadlines) from 14 days to 10 days.

Accelerated or Alternative Procedures

    Many commenters suggested that GAO promote the use of flexible 
alternative procedures to expedite the resolution of bid protests. 
Paragraph (e) of Sec. 21.10 already contains language allowing for the 
establishment of accelerated schedules and the issuance of summary 
decisions. In paragraph (e) of Sec. 21.10, GAO proposes to add language 
specifically acknowledging that flexible alternative procedures may be 
used to promptly and fairly resolve bid protests. In response to 
numerous comments, GAO also proposes to add a new paragraph (f) to 
Sec. 21.10, providing that GAO may conduct status conferences, by 
telephone or in person, with all parties participating in the protest 
to promote the expeditious development and resolution of the protest.

Miscellaneous Matters

    GAO proposes to revise paragraph (e) of Sec. 21.0 in accordance 
with the statutory requirement under 31 U.S.C. 3555(b) that GAO 
prescribe procedures for the computation of days for all periods 
described in Subchapter V, Chapter 35 of Title 31, United States Code.
    In paragraph (a) of Sec. 21.3, and in response to one commenter's 
suggestion, GAO proposes that all protest communications be sent by 
means reasonably calculated to effect ``expeditious'' delivery, 
clarifying what was intended by our previous use of ``timely'' 
delivery.
    For annual reporting purposes, GAO proposes to add language to the 
proposed Sec. 21.3(d), currently at Sec. 21.3(c), requiring agencies to 
include a ``best estimate'' of the value of goods and services being 
procured.
    GAO proposes to remove the substantive content of paragraph (d) of 
Sec. 21.5 addressing procurements protested to the General Services 
Administration Board of Contract Appeals, see sec. 5101 of the National 
Defense Authorization Act for Fiscal Year 1996, and proposes to replace 
the substantive content with a new dismissal ground regarding the 
violation of sec. 27 of the Office of Federal Procurement Policy (OFPP) 
Act, 41 U.S.C. 423. Specifically, as proposed, Sec. 21.5(d) provides 
that for any Federal procurement, GAO will not review an alleged 
violation of subsections (a), (b), (c), and (d) of sec. 27 of the OFPP 
Act, as amended by sec. 4304 of the National Defense Authorization Act 
for Fiscal Year 1996, if the protester failed to report to the Federal 
agency responsible for the procurement the information the protester 
believes constitutes evidence of the offense within 14 days after the 
protester first discovered the possible violation.

Comments

    Comments concerning the proposed rule should reference file number 
B-259187.2. Comments may be filed by hand delivery or mail at the 
address in the address line, or by facsimile transmission at 202-512-
9749.

List of Subjects in 4 CFR Part 21

    Administrative practice and procedure, Bid protest regulations, 
Government contracts.

    For the reasons set out in the preamble, Title 4, Chapter I, 
Subchapter B, of the Code of Federal Regulations is proposed to be 
amended to read as follows:
    1. Part 21 is revised to read as follows:

PART 21--BID PROTEST REGULATIONS

Sec.
21.0  Definitions.
21.1  Filing a protest.
21.2  Time for filing.
21.3  Notice of protest, submission of agency report, and time for 
filing of comments on report.
21.4  Protective orders.
21.5  Protest issues not for consideration.
21.6  Withholding of award and suspension of contract performance.
21.7  Hearings.
21.8  Remedies.

[[Page 19207]]

21.9  Time for decision by GAO.
21.10  Express options, flexible alternative procedures, accelerated 
schedules, summary decisions, and status conferences.
21.11  Effect of judicial proceedings.
21.12  Distribution of decisions.
21.13  Nonstatutory protests.
21.14  Request for reconsideration.

    Authority: 31 U.S.C. 3551-3556.


Sec. 21.0  Definitions.

    (a) Interested party means an actual or prospective bidder or 
offeror whose direct economic interest would be affected by the award 
of a contract or by the failure to award a contract.
    (b) Intervenor means an awardee if the award has been made or, if 
no award has been made, all bidders or offerors who appear to have a 
substantial prospect of receiving an award if the protest is denied.
    (c) Federal agency means any executive department or independent 
establishment in the executive branch, including any wholly owned 
government corporation, and any establishment in the legislative or 
judicial branch, except the Senate, the House of Representatives, and 
the Architect of the Capitol and any activities under his direction.
    (d) Contracting agency means a Federal agency which has awarded or 
proposes to award a contract under a protested procurement.
    (e) Days are calendar days. In computing any period of time 
described in Subchapter V, Chapter 35 of Title 31, United States Code, 
including those described in this part, the day from which the period 
begins to run is not counted, and when the last day of the period is a 
Saturday, Sunday, or Federal holiday, the period extends to the next 
day that is not a Saturday, Sunday, or Federal holiday. Similarly, when 
the General Accounting Office (GAO), or another Federal agency where a 
submission is due, is closed for all or part of the last day, the 
period extends to the next day on which the agency is open.
    (f) Adverse agency action is any action or inaction by a 
contracting agency which is prejudicial to the position taken in a 
protest filed with the agency, including a decision on the merits of a 
protest; the opening of bids or receipt of proposals, the award of a 
contract, or the rejection of a bid despite a pending protest; or 
contracting agency acquiescence in continued and substantial contract 
performance.
    (g) A document is filed on a particular day when it is received by 
GAO by 5:30 p.m., eastern time, on that day. A document may be filed by 
hand delivery, mail, or commercial carrier; parties wishing to file a 
document by facsimile transmission or other electronic means must 
ensure that the necessary equipment is operational at GAO's Procurement 
Law Control Group.


Sec. 21.1  Filing a protest.

    (a) An interested party may protest a solicitation or other request 
by a Federal agency for offers for a contract for the procurement of 
property or services; the cancellation of such a solicitation or other 
request; an award or proposed award of such a contract; and a 
termination of such a contract, if the protest alleges that the 
termination was based on improprieties in the award of the contract.
    (b) Protests must be in writing and addressed as follows: General 
Counsel, General Accounting Office, 441 G Street, NW., Washington, DC 
20548, Attention: Procurement Law Control Group.
    (c) A protest filed with GAO shall:
    (1) Include the name, address, and telephone and facsimile numbers 
of the protester,
    (2) Be signed by the protester or its representative,
    (3) Identify the contracting agency and the solicitation and/or 
contract number,
    (4) Set forth a detailed statement of the legal and factual grounds 
of protest including copies of relevant documents,
    (5) Set forth all information establishing that the protester is an 
interested party for the purpose of filing a protest,
    (6) Set forth all information establishing the timeliness of the 
protest,
    (7) Specifically request a ruling by the Comptroller General of the 
United States, and
    (8) State the form of relief requested.
    (d) In addition, a protest filed with GAO may:
    (1) Request a protective order,
    (2) Request specific documents, explaining the relevancy of the 
documents to the protest grounds, and
    (3) Request a hearing, explaining the reason that a hearing is 
needed to resolve the protest.
    (e) The protester shall furnish a complete copy of the protest, 
including all attachments, to the individual or location designated by 
the contracting agency in the solicitation for receipt of protests, or 
if there is no designation, to the contracting officer. The designated 
individual or location (or, if applicable, the contracting officer) 
must receive a complete copy of the protest and all attachments no 
later than 1 day after the protest is filed with GAO. The protest 
document must indicate that a complete copy of the protest and all 
attachments are being furnished within 1 day to the appropriate 
individual or location.
    (f) No formal briefs or other technical forms of pleading or motion 
are required. Protest submissions should be concise and logically 
arranged, and should clearly state legally sufficient grounds of 
protest. Protests of different procurements should be separately filed.
    (g) Unless precluded by law, GAO will not withhold material 
submitted by a protester from any party outside the government. If the 
protester believes that the protest contains information which should 
be withheld, a statement advising of this fact must be on the front 
page of the submission. This information must be identified wherever it 
appears, and the protester must file, within 1 day after the filing of 
its protest with GAO, a redacted copy of the protest which omits the 
information.
    (h) Parties who intend to file documents containing classified 
information should notify GAO in advance to obtain advice regarding 
procedures for filing and handling the information.
    (i) A protest may be dismissed for failure to comply with any of 
the requirements of this section, except for the items in paragraph (d) 
of this section. In addition, a protest shall not be dismissed for 
failure to comply with paragraph (e) of this section where the 
contracting officer has actual knowledge of the basis of protest, or 
the agency, in the preparation of its report, was not prejudiced by the 
protester's noncompliance.


Sec. 21.2  Time for filing.

    (a)(1) Protests based upon alleged improprieties in a solicitation 
which are apparent prior to bid opening or the time set for receipt of 
initial proposals shall be filed prior to bid opening or the time set 
for receipt of initial proposals. In procurements where proposals are 
requested, alleged improprieties which do not exist in the initial 
solicitation but which are subsequently incorporated into the 
solicitation must be protested not later than the next closing time for 
receipt of proposals following the incorporation.
    (2) Except for protests covered by paragraph (a)(1) of this 
section, protests filed by a party that has received a debriefing 
required by law shall be filed not later than 5 days after the 
debriefing, and in all other cases, not later than 10 days after the 
basis of protest is known or should have been known, whichever is 
earlier.
    (3) If a timely agency-level protest was previously filed, any 
subsequent protest to GAO filed within 5 days of actual or

[[Page 19208]]

constructive knowledge of initial adverse agency action will be 
considered, provided the agency-level protest was filed in accordance 
with paragraphs (a)(1) and (a)(2) of this section, unless the 
contracting agency imposes a more stringent time for filing, in which 
case the agency's time for filing will control. In cases where an 
alleged impropriety in a solicitation is timely protested to a 
contracting agency, any subsequent protest to GAO will be considered 
timely if filed within the 5-day period provided by this paragraph, 
even if filed after bid opening or the closing time for receipt of 
proposals.
    (4) Protests which supplement or amend a previously filed protest 
shall be filed not later than 5 days after the basis of protest is 
known or should have been known, whichever is earlier.
    (b) Protests untimely on their face may be dismissed. A protester 
shall include in its protest all information establishing the 
timeliness of the protest; a protester will not be permitted to 
introduce for the first time in a request for reconsideration 
information necessary to establish that the protest was timely.
    (c) GAO, for good cause shown, or where it determines that a 
protest raises issues significant to the procurement system, may 
consider an untimely protest.


Sec. 21.3  Notice of protest, submission of agency report, and time for 
filing of comments on report.

    (a) GAO shall notify the contracting agency by telephone within 1 
day after the filing of a protest, and, unless the protest is dismissed 
under this part, shall promptly send a written confirmation to the 
contracting agency and an acknowledgment to the protester. The 
contracting agency shall immediately give notice of the protest to the 
contractor if award has been made or, if no award has been made, to all 
bidders or offerors who appear to have a reasonable prospect of 
receiving an award. The contracting agency shall furnish copies of the 
protest submissions to those parties, except where disclosure of the 
information is prohibited by law, with instructions to communicate 
further directly with GAO. All parties shall furnish copies of all 
protest communications to the contracting agency and to other 
participating parties. All protest communications shall be sent by 
means reasonably calculated to effect expeditious delivery.
    (b) A contracting agency or intervenor which believes that the 
protest or specific protest allegations should be dismissed before 
submission of an agency report should file a request for dismissal as 
soon as practicable.
    (c) The contracting agency shall file a report on the protest with 
GAO within 30 days after the telephone notice of the protest from GAO. 
The report provided to the parties need not contain documents which the 
agency has previously furnished or otherwise made available to the 
parties in response to the protest. Five days prior to the filing of 
the report, in cases in which the protester has filed a request for 
specific documents, the agency shall provide to all parties and GAO a 
list of those documents, or portions of documents, which the agency has 
released to the protester or intends to produce in its report, and the 
documents which the agency intends to withhold from the protester and 
the reason for the proposed withholding. Any objection to the scope of 
the agency's proposed disclosure or nondisclosure of documents must be 
filed with GAO and the other parties within 1 day of receipt of this 
list.
    (d) The report shall include the contracting officer's statement of 
the relevant facts, including a best estimate of the acquisition's 
value, a memorandum of law, and a list and a copy of all relevant 
documents, or portions of documents, not previously produced, 
including, as appropriate: the protest; the bid or proposal submitted 
by the protester; the bid or proposal of the firm which is being 
considered for award, or whose bid or proposal is being protested; all 
evaluation documents; the solicitation, including the specifications; 
the abstract of bids or offers; and any other relevant documents. In 
appropriate cases, the contracting agency may request that the 
protester produce relevant documents, or portions of documents, that 
are not in the agency's possession.
    (e) Subject to any protective order issued in the protest pursuant 
to Sec. 21.4, the contracting agency shall simultaneously furnish a 
copy of the report to the protester and any intervenors. The copy of 
the report filed with GAO shall list the parties who have been 
furnished copies of the report. Where a protester does not have counsel 
admitted to a protective order and documents are withheld from the 
protester in accordance with this part, the agency shall provide 
documents adequate to inform the protester of the basis of the agency's 
position.
    (f) The contracting agency may request an extension of time for the 
submission of the agency report. Extensions will be granted on a case-
by-case basis.
    (g) The protester may request additional documents when their 
existence or relevance first becomes evident. Except when authorized by 
GAO, any request for additional documents must be filed with GAO and 
the contracting agency not later than 2 days after their existence or 
relevance is known or should have been known, whichever is earlier. The 
contracting agency shall provide the requested documents, or portions 
of documents, and a list to GAO and the other parties within 2 days or 
explain why it is not required to produce the documents.
    (h) Upon the request of a party, GAO will decide whether the 
contracting agency must provide any withheld documents, or portions of 
documents, and whether this should be done under a protective order. 
When withheld documents are provided, the protester's comments on the 
agency report shall be filed within the original comment filing period 
unless GAO determines that an extension is appropriate.
    (i) Comments on the agency report shall be filed with GAO within 10 
days after receipt of the report, with a copy provided to the 
contracting agency and other participating parties. The protest shall 
be dismissed unless the protester files comments or a written statement 
requesting that the case be decided on the existing record, or requests 
an extension of time within the 10-day period. Unless otherwise advised 
by the protester, GAO will assume the protester received the agency 
report by the due date specified in the acknowledgment of protest 
furnished by GAO. Upon a showing that the specific circumstances of a 
protest require a period longer than 10 days for the submission of 
comments, GAO will set a new date for the submission of comments. 
Extensions will be granted on a case-by-case basis.
    (j) GAO may request or permit the submission of additional 
statements by the parties and by other parties not participating in the 
protest as may be necessary for the fair resolution of the protest. The 
agency and other participating parties shall not submit any additional 
statements unless the statements are specifically requested by GAO or 
submitted after permission has been granted by GAO.


Sec. 21.4  Protective orders.

    (a) At the request of a party or on its own initiative, GAO may 
issue a protective order controlling the treatment of protected 
information. Such information may include proprietary, confidential, or 
source-selection-sensitive material, as well as other information the 
release of which

[[Page 19209]]

could result in a competitive advantage to one or more firms. The 
protective order shall establish procedures for application for access 
to protected information, identification and safeguarding of that 
information, and submission of redacted copies of documents omitting 
protected information. Because a protective order serves to facilitate 
the pursuit of a protest by a protester through counsel, it is the 
responsibility of protester's counsel to request that a protective 
order be issued and to submit timely applications for admission under 
that order.
    (b) If no protective order has been issued, the agency may withhold 
from the parties those portions of its report which would ordinarily be 
subject to a protective order. GAO will review in camera all 
information not released to the parties.
    (c) After a protective order has been issued, counsel or 
consultants retained by counsel appearing on behalf of a party may 
apply for admission under the order by submitting an application to 
GAO, with copies furnished simultaneously to all parties. The 
application shall establish that the applicant is not involved in 
competitive decision-making for any firm that could gain a competitive 
advantage from access to the protected information and that there will 
be no significant risk of inadvertent disclosure of protected 
information. Objections to an applicant's admission shall be raised 
within 2 days after receipt of the application, although GAO may 
consider objections raised after that time.
    (d) Any violation of the terms of a protective order may result in 
the imposition of such sanctions as GAO deems appropriate, including 
referral to appropriate bar associations or other disciplinary bodies 
and restricting the individual's practice before GAO.


Sec. 21.5   Protest issues not for consideration.

    GAO shall summarily dismiss a protest or specific protest 
allegations that do not state a valid basis for protest, are untimely 
(unless considered pursuant to Sec. 21.2(c)), or are not properly 
before GAO. A protest or specific protest allegations may be dismissed 
any time sufficient information is obtained by GAO warranting 
dismissal. Where an entire protest is dismissed, no agency report shall 
be filed; where specific protest allegations are dismissed, an agency 
report shall be filed on the remaining allegations. Among the protest 
bases which shall be dismissed are the following:
    (a) Contract administration. The administration of an existing 
contract is within the discretion of the contracting agency. Disputes 
between a contractor and the agency are resolved pursuant to the 
disputes clause of the contract and the Contract Disputes Act of 1978. 
41 U.S.C. 601-613.
    (b) Small Business Administration issues.--(1) Small business size 
standards and standard industrial classification. Challenges of 
established size standards or the size status of particular firms, and 
challenges of the selected standard industrial classification may be 
reviewed solely by the Small Business Administration. 15 U.S.C. 
637(b)(6).
    (2) Small Business Certificate of Competency Program. Any referral 
made to the Small Business Administration pursuant to sec. 8(b)(7) of 
the Small Business Act, or any issuance of, or refusal to issue, a 
certificate of competency under that section will not be reviewed by 
GAO absent a showing of possible bad faith on the part of government 
officials or a failure to consider vital information bearing on the 
firm's responsibility. 15 U.S.C. 637(b)(7).
    (3) Procurements under sec. 8(a) of the Small Business Act. Under 
that section, since contracts are entered into with the Small Business 
Administration at the contracting officer's discretion and on such 
terms as are agreed upon by the procuring agency and the Small Business 
Administration, the decision to place or not to place a procurement 
under the 8(a) program is not subject to review absent a showing of 
possible bad faith on the part of government officials or that 
regulations may have been violated. 15 U.S.C. 637(a).
    (c) Affirmative determination of responsibility by the contracting 
officer. Because the determination that a bidder or offeror is capable 
of performing a contract is based in large measure on subjective 
judgments which generally are not readily susceptible of reasoned 
review, an affirmative determination of responsibility will not be 
reviewed absent a showing of possible bad faith on the part of 
government officials or that definitive responsibility criteria in the 
solicitation were not met.
    (d) Procurement integrity. For any Federal procurement, GAO will 
not review an alleged violation of subsections (a), (b), (c), or (d) of 
sec. 27 of the Office of Federal Procurement Policy Act, 41 U.S.C. 423, 
as amended by sec. 4304 of the National Defense Authorization Act for 
Fiscal Year 1996, Pub. L. 104-106, 110 Stat. 186, February 10, 1996, 
where the protester failed to report the information it believed 
constituted evidence of the offense to the Federal agency responsible 
for the procurement within 14 days after the protester first discovered 
the possible violation.
    (e) Protests not filed either in GAO or the contracting agency 
within the time limits set forth in Sec. 21.2.
    (f) Protests which lack a detailed statement of the legal and 
factual grounds of protest as required by Sec. 21.1(c)(4), or which 
fail to clearly state legally sufficient grounds of protest as required 
by Sec. 21.1(f).
    (g) Procurements by agencies other than Federal agencies as defined 
by sec. 3 of the Federal Property and Administrative Services Act of 
1949, 40 U.S.C. 472. Protests of procurements or proposed procurements 
by agencies such as the U.S. Postal Service, the Federal Deposit 
Insurance Corporation, and nonappropriated fund activities are beyond 
GAO's bid protest jurisdiction as established in 31 U.S.C. 3551-3556.
    (h) Subcontract protests. GAO will not consider a protest of the 
award or proposed award of a subcontract except where the agency 
awarding the prime contract has requested in writing that subcontract 
protests be decided pursuant to Sec. 21.13.


Sec. 21.6  Withholding of award and suspension of contract performance.

    Where a protest is filed with GAO, the contracting agency may be 
required to withhold award and to suspend contract performance. The 
requirements for the withholding of award and the suspension of 
contract performance are set forth in 31 U.S.C. 3553 (c) and (d).


Sec. 21.7  Hearings.

    (a) At the request of a party or on its own initiative, GAO may 
conduct a hearing in connection with a protest. The request shall set 
forth the reasons why a hearing is needed.
    (b) Prior to the hearing, GAO may hold a pre-hearing conference to 
discuss and resolve matters such as the procedures to be followed, the 
issues to be considered, and the witnesses who will testify.
    (c) Hearings generally will be conducted as soon as practicable 
after receipt by the parties of the agency report and relevant 
documents. Although hearings ordinarily will be conducted at GAO in 
Washington, DC, hearings may, at the discretion of GAO, be conducted at 
other locations, or by telephone.
    (d) All parties participating in the protest shall be invited to 
attend the hearing. Others may be permitted to

[[Page 19210]]

attend as observers and may participate as allowed by GAO's hearing 
official. In order to prevent the improper disclosure of protected 
information at the hearing, GAO's hearing official may restrict 
attendance during all or part of the proceeding.
    (e) Hearings shall normally be recorded and/or transcribed. If a 
recording and/or transcript is made, any party may obtain copies at its 
own expense.
    (f) If a witness whose attendance has been requested by GAO fails 
to attend the hearing or fails to answer a relevant question, GAO may 
draw an inference unfavorable to the party for whom the witness would 
have testified.
    (g) If a hearing is held, no separate comments on the agency report 
should be submitted unless specifically requested by GAO. Each party 
shall file with GAO, within 5 days after the hearing was held or as 
specified by GAO, a single document expressing any comments on both the 
hearing and agency report, with copies furnished to the other parties. 
By the due date, if the protester has not filed comments or a written 
statement requesting that the case be decided on the existing record, 
GAO shall dismiss the protest.
    (h) In post-hearing comments, the parties should reference all 
testimony and admissions in the hearing record that they consider 
relevant, providing specific citations to the testimony and admissions 
referenced.


Sec. 21.8  Remedies.

    (a) If GAO determines that a solicitation, cancellation of a 
solicitation, termination of a contract, proposed award, or award does 
not comply with statute or regulation, it shall recommend that the 
contracting agency implement any combination of the following remedies:
    (1) Refrain from exercising options under the contract;
    (2) Terminate the contract;
    (3) Recompete the contract;
    (4) Issue a new solicitation;
    (5) Award a contract consistent with statute and regulation; or
    (6) Such other recommendation(s) as GAO determines necessary to 
promote compliance.
    (b) In determining the appropriate recommendation(s), GAO shall, 
except as specified in paragraph (c) of this section, consider all 
circumstances surrounding the procurement or proposed procurement 
including the seriousness of the procurement deficiency, the degree of 
prejudice to other parties or to the integrity of the competitive 
procurement system, the good faith of the parties, the extent of 
performance, the cost to the government, the urgency of the 
procurement, and the impact of the recommendation(s) on the contracting 
agency's mission.
    (c) If the head of the procuring activity determines that 
performance of the contract notwithstanding a pending protest is in the 
government's best interest, GAO shall make its recommendation(s) under 
paragraph (a) of this section without regard to any cost or disruption 
from terminating, recompeting, or reawarding the contract.
    (d) If GAO determines that a solicitation, proposed award, or award 
does not comply with statute or regulation, it may recommend that the 
contracting agency pay the protester the costs of:
    (1) Filing and pursuing the protest, including attorneys' fees and 
consultant and expert witness fees; and
    (2) Bid and proposal preparation.
    (e) If the contracting agency decides to take corrective action in 
response to a protest, GAO may recommend that the agency pay the 
protester the costs of filing and pursuing the protest, including 
attorneys' fees and consultant and expert witness fees. The protester 
shall file any request that GAO recommend that costs be paid within 15 
days after being advised that the contracting agency has decided to 
take corrective action. The protester shall furnish a copy of its 
request to the contracting agency, which may file a response within 15 
days after receipt of the request, with a copy furnished to the 
protester.
    (f)(1) If GAO recommends that the contracting agency pay the 
protester the costs of filing and pursuing the protest and/or of bid or 
proposal preparation, the protester and the agency shall attempt to 
reach agreement on the amount of costs. The protester shall file its 
claim for costs, detailing and certifying the time expended and costs 
incurred, with the contracting agency within 90 days after receipt of 
GAO's recommendation that the agency pay the protester its costs. 
Failure to file the claim within that time may result in forfeiture of 
the protester's right to recover its costs.
    (2) The contracting agency shall issue a decision on the claim for 
costs as soon as practicable after the claim is filed. If the protester 
and the contracting agency cannot reach agreement within a reasonable 
time, GAO may, upon request of the protester, recommend the amount of 
costs the agency should pay in accordance with 31 U.S.C. 3554(c). In 
such cases, GAO may also recommend that the contracting agency pay the 
protester the costs of pursuing the claim for costs before GAO.
    (3) The contracting agency shall notify GAO within 60 days after 
GAO recommends the amount of costs the agency should pay the protester 
of the action taken by the agency in response to the recommendation.


Sec. 21.9  Time for decision by GAO.

    (a) GAO shall issue a decision on a protest within 100 days after 
it is filed.
    (b) In protests where GAO uses the express option procedures in 
Sec. 21.10, GAO shall issue a decision on a protest within 65 days 
after it is filed.
    (c) GAO, to the maximum extent practicable, shall resolve a timely 
supplemental protest adding one or more new grounds to an existing 
protest, or an amended protest, within the time limit established in 
paragraph (a) of this section for decision on the initial protest. If a 
supplemental or an amended protest cannot be resolved within that time 
limit, GAO may resolve the supplemental or amended protest using the 
express option procedures in Sec. 21.10.


Sec. 21.10  Express options, flexible alternative procedures, 
accelerated schedules, summary decisions, and status conferences.

    (a) At the request of a party or on its own initiative, GAO may 
decide a protest using an express option.
    (b) The express option will be adopted at the discretion of GAO and 
only in those cases suitable for resolution within 65 days.
    (c) Requests for the express option shall be in writing and 
received in GAO no later than 5 days after the protest or supplemental 
protest is filed. GAO will promptly notify the parties whether the case 
will be handled using the express option.
    (d) When the express option is used, the following schedule applies 
instead of those deadlines in Sec. 21.3 and Sec. 21.7:
    (1) The contracting agency shall file a complete report with GAO 
and the parties within 20 days after it receives notice from GAO that 
the express option will be used.
    (2) Comments on the agency report shall be filed with GAO and the 
other parties within 5 days after receipt of the report.
    (3) If a hearing is held, no separate comments on the agency report 
under paragraph (d)(2) of this section should be submitted unless 
specifically requested by GAO. Consolidated comments on the agency 
report and hearing shall be filed within 5 days after the hearing was 
held or as specified by GAO.

[[Page 19211]]

    (4) Where circumstances demonstrate that a case is no longer 
suitable for resolution using the express option, GAO shall establish a 
new schedule for submissions by the parties.
    (e) GAO may use flexible alternative procedures to promptly and 
fairly resolve a protest, including establishing an accelerated 
schedule and/or issuing a summary decision.
    (f) GAO may conduct status conferences by telephone or in person 
with all parties participating in a protest to promote the expeditious 
development and resolution of the protest.


Sec. 21.11  Effect of judicial proceedings.

    (a) A protester must immediately advise GAO of any court proceeding 
which involves the subject matter of a pending protest and must file 
with GAO copies of all relevant court documents.
    (b) GAO will dismiss any protest where the matter involved is the 
subject of litigation before a court of competent jurisdiction, or 
where the matter involved has been decided on the merits by a court of 
competent jurisdiction. GAO may, at the request of a court, issue an 
advisory opinion on a bid protest issue that is before the court. In 
these cases, unless a different schedule is established, the times 
provided in this part for filing the agency report (Sec. 21.3(c)), 
filing comments on the report (Sec. 21.3(i)), holding a hearing and 
filing comments (Sec. 21.7), and issuing a decision (Sec. 21.9) shall 
apply.


Sec. 21.12  Distribution of decisions.

    (a) Unless it contains protected information, a copy of a decision 
shall be provided to the protester, any intervenors, the head of the 
contracting activity responsible for the protested procurement, and the 
senior procurement executive of each Federal agency involved; a copy 
shall also be made available to the public. A copy of a decision 
containing protected information shall be provided only to the 
contracting agency and to individuals admitted to any protective order 
issued in the protest. A public version omitting the protected 
information shall be prepared wherever possible.
    (b) Decisions are available from GAO by electronic means.


Sec. 21.13  Nonstatutory protests.

    (a) GAO will consider protests concerning awards of subcontracts by 
or for a Federal agency, sales by a Federal agency, or procurements by 
agencies of the government other than Federal agencies as defined in 
Sec. 21.0(c) if the agency involved has agreed in writing to have 
protests decided by GAO.
    (b) The provisions of this part shall apply to nonstatutory 
protests except for the provision of Sec. 21.8(d) pertaining to 
recommendations for the payment of costs. The provision for the 
withholding of award and the suspension of contract performance, 31 
U.S.C. 3553 (c) and (d), also does not apply to nonstatutory protests.


Sec. 21.14  Request for reconsideration.

    (a) The protester, any intervenor, and any Federal agency involved 
in the protest may request reconsideration of a bid protest decision. 
GAO will not consider a request for reconsideration that does not 
contain a detailed statement of the factual and legal grounds upon 
which reversal or modification is deemed warranted, specifying any 
errors of law made or information not previously considered.
    (b) A request for reconsideration of a bid protest decision shall 
be filed, with copies to the parties who participated in the protest, 
not later than 10 days after the basis for reconsideration is known or 
should have been known, whichever is earlier.
    (c) GAO will summarily dismiss any request for reconsideration that 
fails to state a valid basis for reconsideration or is untimely. The 
filing of a request for reconsideration does not require the 
withholding of award and the suspension of contract performance under 
31 U.S.C. 3553 (c) and (d).
Robert P. Murphy,
General Counsel.
[FR Doc. 96-10831 Filed 4-30-96; 8:45 am]
BILLING CODE 1610-01-P