[Federal Register Volume 60, Number 56 (Thursday, March 23, 1995)]
[Proposed Rules]
[Pages 15450-15452]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-7097]
[[Page 15449]]
_______________________________________________________________________
Part IX
Department of Defense
General Services Administration
National Aeronautics and Space Administration
_______________________________________________________________________
48 CFR Parts 1, 32, 33 and 52
Federal Acquisition Regulation (FAR); Ratification and Protest Costs:
Proposed Rule
Federal Register / Vol. 60, No. 56 / Thursday, March 23, 1995 /
Proposed Rules
[[Page 15450]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1, 32, 33, and 52
[FAR Case 94-731]
RIN 9000-AG52
Federal Acquisition Regulation; Ratification and Protest Costs
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
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SUMMARY: This proposed rule is issued pursuant to the Federal
Acquisition Streamlining Act of 1994 (Pub. L. 103-355) dated October
13, 1994, to implement the requirements for protests and disputes in
Government procurement. The rule reflects the Federal Register
publication at 60 FR 2630, January 10, 1995, concerning amendments made
under FAR case 94-731, Ratification of Protest Costs, and should be
read in conjunction with that case. This regulatory action was subject
to Office of Management and Budget review under Executive Order 12866,
dated September 30, 1993.
DATES: Comments should be submitted on or before May 22, 1995 to be
considered in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments to:
General Services Administration, FAR Secretariat (VRS), 18th & F
Streets NW., Room 4037, Washington, DC 20405.
Please cite FAR Case 94-731 in all correspondence related to this
case.
FOR FURTHER INFORMATION CONTACT:
Mr. Craig Hodge, Protests/Disputes Team Leader at (703) 274-8940 in
reference to this FAR case. For general information, contact the FAR
Secretariat, Room 4037, GS Building, Washington, DC 20405, (202) 501-
4755. Please cite FAR Case 94-731, Ratification of Protest Costs.
SUPPLEMENTARY INFORMATION:
A. Background
The Federal Acquisition Streamlining Act of 1994 (the Act), Pub. L.
103-355, provides authorities that streamline the acquisition process
and minimize burdensome Government-unique requirements. Major changes
that can be expected in the acquisition process as a result of
implementing the Act include the areas of protests, disputes, and
appeals.
This case presents proposed FAR amendments developed under FAR Case
94-731, Ratification of Protest Costs. Sections 1016, 1403, and 1435 of
the Act provide that agencies may be required to pay protest and offer
preparation costs to protesters under certain circumstances. Often as
the result of discovery during a protest, misrepresentations may be
detected that could not have been reasonably known to the agency's
evaluators. A protest may be sustained where the award has been induced
by a material misrepresentation by the awardee. Such situations often
involve proposed ``key personnel.''
The agency is without effective remedy in such cases.
Theoretically, the agency could ask the Department of Justice to file a
lawsuit against the offeror making the misrepresentations. However, due
to the heavy workload of the Justice attorneys, this is not a practical
alternative. The proposed FAR change will not adversely affect any
substantive right of an offeror. Under the proposed language, the
Government remedy is to offset such costs on the same or an unrelated
contract. If the offeror believes that the offset is not justified, it
may appeal the action to the agency, or under the Contract Disputes Act
to either a Board of Contract Appeals or the Court of Federal Claims.
In view of expected benefits to Government and industry from the
Act, FAR implementation was formulated under an expedited process. The
FAR Council is interested in an exchange of ideas and opinions with
respect to the regulatory implementation of the Act. For that reason,
the FAR Council is conducting a series of public meetings. However, the
FAR Council has not scheduled a public meeting on this rule (FAR Case
94-731) because of the clarity and non-controversial nature of the
rule. If the public believes such a meeting is needed with respect to
this rule, a letter requesting a public meeting and outlining the
nature of the requested meeting shall be submitted to and received by
the FAR Secretariat (see ADDRESSES caption) on or before April 24,
1995.
The FAR Council will consider such requests in determining whether
a public meeting on this rule should be scheduled.
B. Regulatory Flexibility Act
This proposed rule is not expected to have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., because the vast
number of contracts do not involve protests where misrepresentation is
detected through discovery. An Initial Regulatory Flexibility Analysis
has, therefore, not been performed. Comments from small entities
concerning the affected FAR subpart will be considered in accordance
with 5 U.S.C. 610 of the Act. Such comments must be submitted
separately and should cite 5 U.S.C. 601 et seq. (FAR Case 94-731), in
correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the proposed
changes to the FAR do not impose recordkeeping or information
collection requirements, or collections of information from offerors,
contractors, or members of the public which require the approval of the
Office of Management and Budget under 44 U.S.C. 3501 et seq.
List of Subjects in 48 CFR Parts 1, 32, 33, and 52
Government procurement.
Dated: March 16, 1995.
Edward C. Loeb,
Deputy Project Manager for the Implementation of the Federal
Acquisition Streamlining Act of 1994.
Therefore, it is proposed that 48 CFR Parts 1, 32, 33 and 52 be
amended as set forth below:
1. The authority citation for 48 CFR Parts 1, 32, 33 and 52
continues to read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 1--FEDERAL ACQUISITION REGULATION SYSTEM
2. Section 1.602-3 is amended by revising paragraph (c)(2) to read
as follows:
1.602-3 Ratification of unauthorized commitments.
* * * * *
(c) * * *
(2) The ratifying official has the authority to enter into a
contractual commitment.
* * * * *
PART 32--CONTRACT FINANCING
3. Section 32.602 is amended by adding paragraph (h) to read as
follows:
32.602 General.
* * * * *
(h) Reimbursement of costs, as provided in 48 CFR (FAR) 33.102(b),
33.104(h)(1), and 33.105(g)(1), paid by the Government where a
postaward [[Page 15451]] protest is sustained as a result of an
awardee's misstatement, misrepresentation, or miscertification.
4. Section 32.603 is revised to read as follows:
32.603 Applicability.
Except as otherwise specified, this subpart applies to all debts to
the Government arising in connection with contracts and subcontracts
for the acquisition of supplies or services and debts arising from the
Governments payment of costs, as provided in 48 CFR (FAR) 33.102(b),
33.104(h)(1), and 33.105(g)(1), where a postaward protest is sustained
as a result of an awardee's misstatement, misrepresentation, or
miscertification.
PART 33--PROTESTS, DISPUTES, AND APPEALS
5. Section 33.102 is amended by redesignating paragraphs (b) and
(c) as (c) and (e), respectively, and adding new paragraphs (b) and
(d); and revising newly designated paragraphs (e)(2) and (e)(3) to read
as follows:
33.102 General.
* * * * *
(b) If in connection with a protest, the head of an agency
determines that a solicitation, proposed award, or award does not
comply with the requirements of law or regulation, the head of the
agency may--
(1) Take any action that may have been taken by the Comptroller
General in the event of a GAO protest; and
(2) Pay appropriate costs as stated in Section 33.104(h).
(3) Require the awardee to reimburse the Government's costs, as
provided in this paragraph, where a postaward protest is sustained as
the result of an awardees intentional or negligent misstatement,
misrepresentation, or miscertification. In addition to any other remedy
available, and pursuant to the requirements of 48 CFR (FAR) part 32,
subpart 32.6, the Government may collect this debt by offsetting the
amount against any payment due the awardee under any contract between
the awardee and the Government.
* * * * *
(d) Protest likely after award. The contracting officer may stay
performance of a contract within the time period contained in
33.104(c)(1) if the contracting officer makes a written determination
that--
(1) A protest is likely to be filed; and
(2) Delay of performance is, under the circumstances, in the best
interests of the United States.
(e) * * *
(2) May protest to the GAO in accordance with GAO regulations (4
CFR part 21). An interested party who has filed a protest regarding an
ADP procurement with the GAO may not file a protest with the GSBCA with
respect to that procurement.
(3) May protest to the GSBCA regarding an award of an ADP contract
in accordance with GSBCA Rules of Procedure (48 CFR chapter 61). An
interested party who has filed a protest regarding an ADP procurement
with GSBCA (40 U.S.C. 759(f)) may not file a protest with the GAO with
respect to that procurement.
6. Section 33.104 is amended by revising paragraph (h) to read as
follows:
33.104 Protests to GAO.
* * * * *
(h) Award of costs. (1) If the GAO determines that a solicitation
for a contract or a proposed award or an award of a contract does not
comply with a statute or regulation, the GAO may recommend that the
agency conducting the procurement pay to an appropriate interested
party the direct cost, exclusive of profit, of filing and pursuing the
protest, including reasonable attorney's fees and consultant and expert
witness fees, and bid and proposal preparation costs.
(2) If the GAO recommends the award of costs to an interested
party, the agency, in accordance with agency procedures, shall attempt
to reach an agreement on the amount of the cost to be paid. If the
agency and the interested party are unable to agree on the amount to be
paid, GAO may, upon request of the interested party, recommend to the
agency the amount of cost that the agency should pay.
(3) No agency shall pay a party, other than a small business
concern within the meaning of section 3(a) of the Small Business Act
(see 48 CFR (FAR) 19.001 definition, ``Small business concern''), costs
under paragraph (h)(2) of this section--
(i) For consultant and expert witness fees that exceed the highest
rate of compensation for expert witnesses paid by the Government; or
(ii) For attorneys' fees that exceed $150 per hour unless the
agency determines, based on the recommendation of the Comptroller
General on a case by case basis, that an increase in the cost of living
or a special factor, such as the limited availability of qualified
attorneys for the proceedings involved, justifies a higher fee. The cap
placed on attorneys' fees for businesses, other than small businesses,
constitutes a benchmark as to what constitutes a ``reasonable'' level
for attorneys' fees for small businesses.
(4) A recommended award of costs may be paid by the agency out of
funds available to or for the use of the agency for the acquisition of
supplies or services. Before paying a recommended award of costs,
agency personnel should consult legal counsel. Section 33.104(h)
applies to all recommended awards of costs which have not yet been
paid.
(5) If the GAO recommends the agency pay costs (as defined under
paragraph (h)(1) of this section) and the agency does not promptly pay
the costs, the agency shall promptly report to GAO the reasons for the
failure to follow the GAO recommendation.
(6) Any costs the contractor receives under this section shall be
excluded from all proposals, billings, or claims against the Government
and such exclusions should be reflected in the cost agreement.
(7) If the Government pays costs, as provided in paragraph (h)(1)
of this section, where a post award protest is sustained as the result
of an awardees intentional or negligent misstatement,
misrepresentation, or miscertification, the Government may require the
awardee to reimburse the Government the amount of such costs. In
addition to any other remedy available, and pursuant to the
requirements of 48 CFR (FAR) part 32, subpart 32.6, the Government may
collect this debt by offsetting the amount against any payment due the
awardee under any contract between the awardee and the Government.
7. Section 33.105 is amended by--
(a) Redesignating paragraphs (f) and (g) as (g) and (h) and adding
a new paragraph (f);
(b) By adding paragraphs (g)(3), (4), and (5); and
(c) By revising the new paragraph (h).
The revised text reads as follows:
33.105 Protests to GSBCA.
* * * * *
(f) Any agreement that provides for the dismissal of a protest and
involves a direct or indirect expenditure of appropriated funds shall
be made part of the public record (subject to any protective order
considered appropriate by the Board) before dismissal of the protest.
If an agency is party to a settlement agreement, the submission of the
agreement to the Board shall include a memorandum, signed by the
contracting officer concerned, that describes in detail the
procurement, the grounds for protest, the Government's position
regarding the grounds for protest, the terms of the settlement, and the
agency's position regarding the [[Page 15452]] propriety of the award
or proposed award of the contract at issue in the protest.
(g) * * *
(3) No agency shall pay a party, other than a small business
concern within the meaning of section 3(a) of the Small Business Act
(see 48 CFR (FAR) 19.001 definition, ``Small business concern''), costs
under paragraph (g)(1) of this section--
(i) For consultant and expert witness fees that exceed the highest
rate of compensation for expert witnesses paid by the Government; or
(ii) For attorneys' fees that exceed $150 per hour unless the Board
determines, on a case by case basis, that an increase in the cost of
living or a special factor, such as the limited availability of
qualified attorneys for the proceedings involved, justifies a higher
fee. The cap placed on attorneys' fees for businesses, other than small
businesses, constitutes a benchmark as to what constitutes a
``reasonable'' level for attorneys' fees for small businesses.
(4) Within 30 days after receipt by the agency of an application
for cost, the agency may file an answer.
(5) If the Government pays costs, as provided in paragraph (g)(1)
of this section, where a post award protest is sustained as the result
of an awardee's intentional or negligent misstatement,
misrepresentation, or miscertification, the Government may require the
awardee to reimburse the Government the amount of such costs. In
addition to any other remedy available, and pursuant to the
requirements of 48 CFR (FAR) part 32, subpart 32.6, the Government may
collect this debt by offsetting the amount against any payment due the
awardee under any contract between the awardee and the Government.
(h) The GSBCA's final decision may be appealed by the agency or by
any interested party, including any intervening interested parties, as
set forth in the Contract Disputes Act.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
8. Section 52.233-3 is amended by revising the date of the clause;
and by adding paragraph (f) to read as follows:
52.233-3 Protest after award.
* * * * *
Protest After Award (Date)
* * * * *
(f) If as the result of the awardee's intentional or negligent
misstatement, misrepresentation, or miscertification, a protest
related to this solicitation is sustained, and the Government pays
costs, as provided in 48 CFR (FAR) 33.102(b)(2), 33.104(h)(1), or
33.105(g)(1), the Government may require the awardee to reimburse
the Government the amount of such costs. In addition to any other
remedy available, and pursuant to the requirements of 48 CFR (FAR)
part 32, subpart 32.6, the Government may collect this debt by
offsetting the amount against any payment due the awardee under any
contract between the awardee and the Government.
(End of clause)
[FR Doc. 95-7097 Filed 3-22-95; 8:45 am]
BILLING CODE 6820-34-D