[Federal Register Volume 60, Number 154 (Thursday, August 10, 1995)]
[Rules and Regulations]
[Pages 40737-40744]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-19747]



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  Federal Register / Vol. 60, No. 154 / Thursday, August 10, 1995 / 
Rules and Regulations  


[[Page 40737]]


GENERAL ACCOUNTING OFFICE

4 CFR Part 21


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

AGENCY: General Accounting Office.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The General Accounting Office (GAO) is amending its Bid 
Protest Regulations after receiving and considering the comments on the 
proposed rule published on January 31, 1995. The final rule implements 
the Federal Acquisition Streamlining Act of 1994 (FASA) and conforms 
GAO's current regulation to the practice that has evolved at GAO since 
April 1991, when GAO last revised part 21. The final rule will improve 
the overall efficiency and effectiveness of GAO's bid protest process 
by streamlining the process, by reducing the costs of pursuing protests 
at GAO for all parties, and by permitting GAO to resolve protests as 
expeditiously as possible. The final rule reflects the requirement in 
FASA that the implementing regulation be concise and easily understood 
by vendors and government officials. The final rule shortens the 
regulation, even though several provisions implementing FASA are added.

EFFECTIVE DATE: October 1, 1995.

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

SUPPLEMENTARY INFORMATION:

Effective Dates

    Protests filed at GAO prior to the effective date of this final 
rule will be considered under the previous rule published at 56 FR 3759 
on April 1, 1991. That previous rule will also be used to consider (1) 
protests filed on or after the effective date of this rule which 
supplement or amend a protest filed at GAO prior to the effective date 
of this rule and (2) claims and requests for reconsideration filed on 
or after the effective date of this rule which concern a protest which 
was considered under the previous rule.

Background

    On January 31, 1995, GAO published a proposed rule (60 FR 5871) in 
which it proposed to revise its Bid Protest Regulations. The 
supplementary information included with the proposed rule explained 
that the proposed revision to GAO's regulation implemented the 
statutory changes contained in the Federal Acquisition Streamlining Act 
of 1994 (FASA), Pub. L. 103-355, 108 Stat. 3243, dated October 13, 
1994. The proposed rule also was based on GAO's experience with the 
previous rule, including the use of protective orders and hearings, 
which was published at 56 FR 3759 on April 1, 1991. The proposed rule 
conformed GAO's regulation to the practice that had evolved at GAO 
since April 1991.
    In revising its regulation, GAO has been guided by the statutory 
mandate in sec. 10002(e) of FASA that the implementing regulation be 
concise and easily understood by vendors and government officials, and 
by the principle that GAO's bid protest process remain as uncomplicated 
and informal as possible, consistent with the goal of providing 
expeditious and meaningful relief to vendors wrongfully excluded from 
procurements. More specifically, GAO's final rule will streamline the 
process, reduce the costs of pursuing protests at GAO for all parties, 
and permit GAO to resolve protests as expeditiously as possible. GAO's 
regulation is shortened overall, even though several new provisions 
implementing FASA are added. Redundancies are eliminated and language 
changes reflect an effort to make the regulation clearer and more 
readable.

Summary of Comments

    Interested persons were invited to submit comments on GAO's 
proposed rule by April 3, 1995. We received written comments from 11 
Federal agencies, 2 bar associations, 4 law firms, 1 industry 
association, and 2 members of the public. In adopting this final rule, 
we have carefully considered all comments received. The commenters 
generally were supportive of our efforts to streamline the bid protest 
process and to provide expeditious and meaningful relief to vendors 
wrongfully excluded from procurements. In this regard, the commenters 
suggested further language changes consistent with these goals. We have 
adopted many of these suggestions in the final rule to improve the 
efficiency of the process.
    A discussion of the more significant comments concerning GAO's 
proposed rule, and our responses to these comments, are set forth 
below.

Section 21.0--Definitions

    One commenter recommended that we expand the definition of 
``intervenor'' in Sec. 21.0(b) to include entities which participated 
in a procurement which were not selected for award. It was suggested 
that these entities be considered ``intervenors'' in spite of their 
decision not to file a protest. Because these entities can file a 
protest in their own right, we do not believe that expansion of the 
definition of ``intervenor'' is warranted. Also, under Sec. 21.3(i), 
GAO may permit, or even request, the submission of statements by 
entities which do not choose to, or cannot, participate as a matter of 
right in a protest. For example, it has been our practice to allow 
submissions from trade associations and other participants in a 
procurement.

Section 21.1--Filing a Protest

    One commenter, in supporting our efforts to make the final rule 
more ``user-friendly,'' suggested that we further revise the language 
in Sec. 21.1(c), which lists the elements of a protest filing, to 
include certain additional elements. We basically adopted this 
suggestion by adding language to require a protester to establish in 
its protest its interested party status and the timeliness of its 
protest. Moreover, we have added a new paragraph (d) to this section 
(and accordingly, have redesignated subsequent paragraphs) which 
provides that in addition, protesters may request in their protests a 
protective order, specific documents relevant to the protest grounds, 
and a hearing. Further, we have revised the language in redesignated 
paragraph (i) of this section to provide that protests will not be 
dismissed if a protester fails 

[[Page 40738]]
to request in its initial protest filing a protective order, specific 
documents relevant to the protest grounds, or a hearing. We believe 
these revisions will significantly simplify a protester's preparation 
of its protest.
    In response to a commenter's concern that the agency does not 
always receive a complete copy of a protest and all attachments, we 
have added language to redesignated paragraph (e) of Sec. 21.1 to make 
it clear that the protester is obligated to furnish the agency with a 
complete copy of its protest, including all attachments.
    With respect to redesignated paragraph (g) of Sec. 21.1, several 
commenters argued that the requirement for the simultaneous submission 
at GAO of a redacted version of a protest (omitting confidential 
information), along with the full, unredacted protest, would be unduly 
burdensome. Accordingly, we have revised the language in this section 
to require that a redacted version of the protest be filed with GAO 
within 1 day after the filing of the unredacted protest.

Section 21.2--Time for Filing

    In the proposed rule, consistent with the requirements of FASA, we 
have converted our timeliness rules from ``working days'' to ``calendar 
days.'' Accordingly, a protester may file a protest (which does not 
involve an alleged solicitation impropriety) not later than 14 calendar 
days (as opposed to 10 working days) after the basis of protest is 
known or should have been known, whichever is earlier.
    Section 1402(b) of FASA requires an agency which receives notice of 
a protest from GAO within 10 days after the date of contract award or 
within 5 days after the debriefing date offered to an unsuccessful 
offeror for any debriefing that is requested and, when requested, is 
required to immediately direct the contractor to suspend contract 
performance. According to one commenter, Congress intended to provide 
meaningful relief to an unsuccessful offeror which filed a protest 
within 5 calendar days after a required debriefing, thus obviating the 
unsuccessful offeror's need to file a ``defensive'' protest prior to 
receiving all information to which it is entitled pursuant to a 
statutorily required debriefing.
    In light of the 14-calendar-day rule for filing timely protests, 
the commenter argued that if a protest is based on information 
discovered before a required debriefing, the protester cannot wait to 
file its protest until after it is debriefed since, at that point, the 
14-calendar-day period for filing a timely protest may have expired, 
although the protest may still be timely for the purpose of requiring 
the agency to suspend contract performance. For this reason, the 
commenter suggested that we change our timeliness rules to provide that 
a protest, other than one based on an alleged solicitation impropriety, 
be considered timely if it is filed within 14 calendar days after the 
protester knew (or should have known, if that is earlier) the basis of 
protest, or if it is filed within 5 calendar days after the required 
debriefing, whichever is later.
    While we believe that this recommendation should be given further 
consideration, we decline to adopt this suggestion in the final rule 
because such a significant change to our longstanding timeliness rules 
should be published for comment prior to implementation. We plan to 
evaluate the protest practice which evolves in response to the 
implementation of the new debriefing requirements of FASA. If 
experience shows that a revision to our timeliness rules would be 
beneficial to the bid protest system, we will consider further 
rulemaking.

Section 21.3--Notice of Protest, Submission of Agency Report, and Time 
for Filing of Comments on Report

    In response to a suggestion from a commenter, we have added 
language to Sec. 21.3(a) to require that all protest communications be 
sent by means reasonably calculated to effect timely delivery. We 
believe this change will improve the efficiency of the bid protest 
process.
    In response to suggestions from several commenters, we also have 
added language to clarify Sec. 21.3(b) and to specifically acknowledge, 
consistent with our current practice, that an intervenor, as well as an 
agency, may file a request for dismissal of a protest prior to 
submission of the agency report.
    Several commenters expressed concern regarding our implementation 
of the protest file requirement contained in sec. 1015 and 1065 of 
FASA. It was the consensus of these commenters that requiring an agency 
to file a protest file within 20 days of a request for such a file in 
every one of the large number of protests filed with our Office would 
represent an undue burden, in particular because of the need to redact 
the documents in the protest file. These commenters pointed out that 
many protests are dismissed (or withdrawn) within the first 20 days 
after filing, and that in those cases, the time and effort devoted to 
preparing a protest file would be wasted. In addition, some of these 
commenters stated that they would be forced to litigate every protest, 
even where summary dismissal is appropriate, because they would be 
compelled to devote their limited resources to preparing a protest file 
rather than to drafting requests for summary dismissal.
    In response to the concerns expressed, we have decided not to adopt 
the protest file requirement at this time. While we continue to believe 
that filing a protest file early in the bid protest process will permit 
a more expeditious resolution of protests and offer other system 
efficiencies, in view of the concern that the requirement for early 
preparation of protest material is unduly burdensome, we have elected 
at this time not to implement a mandatory protest file requirement as 
part of our bid protest procedures.
    In any event, we note that the agencies have a statutory obligation 
to implement a protest file procedure. Rather than our Office 
implementing a protest file requirement at this time, we think it is 
appropriate that the protest file requirement be implemented, in the 
first instance, in the Federal Acquisition Regulation (FAR). However, 
it remains our intention, in appropriate cases, to encourage agencies 
to voluntarily provide a protest file early in the bid protest process 
to ensure prompt development and resolution of protests, and to avoid 
the need for GAO to invoke the express option in roll-over situations 
(i.e., those cases where GAO closes an initial protest without deciding 
the merits of the protest grounds originally raised because a 
subsequently filed protest, with new or related protest grounds, 
potentially renders a decision on the initial protest grounds 
meaningless). In this regard, in response to suggestions from several 
commenters, we have clarified the language in Sec. 21.10(a) by 
expressly stating that GAO may invoke the express option on its own 
initiative. We plan to closely evaluate the impact of such voluntary 
use of the protest file and, if the results prove to be of benefit to 
the process, we will consider formally incorporating the protest file 
requirement into our procedures.
    In response to a commenter's concern that the language in 
Sec. 21.3(c) permitting an agency to request relevant documents from a 
protester will allow for ``wide-open'' document requests, we have 
clarified the language in this section to limit these requests to 
``appropriate cases.''
    To conform our regulation to current practice, we have revised the 
language in Sec. 21.3(e) to provide for granting an agency's requests 
for extensions of time for submission of agency reports ``on a 

[[Page 40739]]
case-by-case basis,'' rather than granting these requests 
``sparingly,'' the language which is used in our current regulation. 
(For consistency, we also have revised the language in Sec. 21.3(h) to 
provide for granting a protester's requests for extensions of time for 
submission of comments ``on a case-by-case basis,'' rather than 
granting these requests ``sparingly,'' the language which is used in 
our current regulation.)

Section 21.5--Protest Issues Not for Consideration

    Several commenters questioned our language change in 
Sec. 21.5(b)(2) which provides that we will review the refusal by the 
Small Business Administration to issue a certificate of competency 
because of ``a failure to consider vital information bearing on the 
firm's responsibility.'' We added this language to reflect our current 
case law. See COSTAR, B-240980, Dec. 20, 1990, 90-2 CPD para. 509; 
American Industrial Contractors, Inc., B-236410.2, Dec. 15, 1989, 89-2 
CPD para. 557.
Section 21.6--Withholding of Award and Suspension of Contract 
Performance

    The information provided in Sec. 21.6 is significantly modified. 
This section in the proposed rule repeated in substance the 
requirements for the withholding of award and the suspension of 
contract performance which are contained in 48 CFR part 33. These 
requirements are to be carried out by the agencies, not our Office, and 
therefore we refer readers to the relevant statutory and regulatory 
provisions addressing these requirements.

Section 21.7--Hearings

    With regard to paragraphs (g) and (h) of Sec. 21.7, several 
commenters requested clarification of the requirement for agencies to 
file consolidated post-hearing comments on the hearing and agency 
report, and clarification of the requirement to reference relevant 
hearing testimony and admissions. We have adopted the language 
recommended by the commenters.

Section 21.8--Remedies

    Several commenters suggested that we address how we will implement 
the fee limitation provisions contained in sec. 1403 of FASA. We have 
added language to Sec. 21.8(f)(2) referencing the statutory language of 
FASA. The agencies will adjudicate, in the first instance, claims for 
costs consistent with the statutory fee limitation provisions. If a 
protester and agency cannot reach agreement on a claim for costs within 
a reasonable time, we may, upon request of the protester, recommend the 
amount of costs the agency should pay in accordance with the statutory 
fee limitation provisions.
    Regarding the limitation on attorneys' fees, issues involving, for 
example, a request for higher fees based on the cost of living or a 
special factor are more appropriately resolved on a case-by-case basis. 
We expect to provide necessary guidance to parties through our 
decisions. Concerning the consultant and expert witness fee limitation, 
FASA limits the payment of these fees to ``the highest rate of 
compensation * * * paid by the Federal Government.'' While there is 
some difference of opinion among the commenters on whether Congress 
intended to cap fees at the highest rate fixed by the Classification 
Act Schedules 15, see 5 U.S.C. 3109, we believe that the proposed FAR 
implementation, which limits consultant and expert witness fees to the 
highest rate fixed by 5 U.S.C. 3109, is appropriate and consistent with 
the statutory language. We are unaware of any legislative history which 
suggests that this implementation is contrary to congressional intent.

Section 21.10--Express Option, Accelerated Schedule, and Summary 
Decision

    Section 21.10 has been clarified to confirm that GAO may resolve 
any protest using a flexible, accelerated schedule. In addition, for 
any protest, GAO may issue a summary decision. We anticipate that a 
request for a summary decision will be made as soon as practicable 
after the protest is filed, thus permitting GAO to expedite the 
decision-making process in order to minimize the disruption to the 
procurement process.

Section 21.12--Distribution of Decisions

    As stated in Sec. 21.12, we have established an electronic 
distribution system to facilitate expedited access to decisions. The 
telephone number for obtaining information regarding access to this 
electronic distribution system is 202-512-5282. In addition, the 
telephone number for GAO's case status line is 202-512-5436. We 
encourage parties requiring copies of decisions or case status 
information to use these telephone numbers. We are also changing the 
format of bid protest decisions. In order to provide a more uniform 
format and to facilitate distribution through electronic systems, the 
decisions themselves will not have an original signature, but the typed 
designation ``Comptroller General of the United States.''

Section 21.13--Nonstatutory Protests

    One commenter expressed concern with the language of Sec. 21.13 
regarding an agency's agreement to have its protests decided by GAO. 
While we believe that a language change is not required, we point out 
that the language in this section is intended to permit agencies to 
agree, in advance, that our Office decide a class of cases or a 
particular case. Once a protest is filed, however, we do not anticipate 
that an agency will revoke an agreement to have the pending protest 
decided by our Office, and, in fact, in the past no agency has revoked 
such an agreement.

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 amended 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.
21.9  Time for decision by GAO.
21.10  Express option, accelerated schedule, and summary decision.
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 

[[Page 40740]]
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 a period of time for the 
purpose of this part, the day from which the period begins to run is 
not counted. 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 relevant to the protest grounds, and
    (3) Request a hearing.
    (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) In cases other than those covered in paragraph (a)(1) of this 
section, protests shall be filed not later than 14 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 14 days of actual or 
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 14-day period provided by this paragraph, 
even if filed after bid opening or the closing time for receipt of 
proposals.
    (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, 

[[Page 40741]]
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 
timely 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 35 days after the telephone notice of the protest from GAO. 
The report shall include the contracting officer's statement of the 
relevant facts, a memorandum of law, and an index and a copy of all 
relevant documents 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 or portions relevant to the protest; the abstract of 
bids or offers or relevant portions; and any other relevant documents. 
The contracting agency shall provide any additional documents requested 
in the protest or explain why it is not required to produce the 
documents. In appropriate cases, the contracting agency may request 
that the protester produce relevant documents that are not in the 
agency's possession.
    (d) 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 and shall identify in an index any 
documents, or portions of documents, withheld from any party and the 
reason for the withholding. 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.
    (e) 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.
    (f) 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 and an index 
to GAO and the other parties within 5 days or explain why it is not 
required to produce the documents.
    (g) Upon the request of a party, GAO will decide whether the 
contracting agency must provide any withheld 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 10 days after its receipt of the documents, unless otherwise 
specified by GAO.
    (h) Comments on the agency report shall be filed with GAO within 14 
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 14-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 14 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.
    (i) GAO may permit or request 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.


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 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, in the first instance, 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 decisionmaking 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 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 

[[Page 40742]]
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 protested to the General Services Administration 
Board of Contract Appeals. Interested parties may protest a procurement 
or proposed procurement of automated data processing equipment and 
services to the General Services Administration Board of Contract 
Appeals. After a protest to the Board, the same procurement generally 
may not be the subject of a protest to GAO. 40 U.S.C. 759(f).
    (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) and are 
implemented by 48 CFR part 33.
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.
    (d) All parties participating in the protest shall be invited to 
attend the hearing. Others may be permitted to 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 7 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 

[[Page 40743]]
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 14 
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 14 
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 125 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, within the time limit established in paragraph (a) of this 
section for decision on the initial protest. If an amended protest 
cannot be resolved within that time limit, GAO may resolve the amended 
protest using the express option procedures in Sec. 21.10.


Sec. 21.10  Express option, accelerated schedule, and summary decision.
    (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 3 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 7 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 7 days after the hearing was 
held or as specified by GAO.
    (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) At the request of a party or on its own initiative, GAO may 
resolve any protest using an accelerated schedule and/or may issue a 
summary decision for any 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(h)), 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. 

[[Page 40744]]



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 14 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. 95-19747 Filed 8-9-95; 8:45 am]
BILLING CODE 1610-01-P