TITLE: B-311284, Mark Whetstone--Designated Employee Agent, May 9, 2008
BNUMBER: B-311284
DATE: May 9, 2008
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B-311284, Mark Whetstone--Designated Employee Agent, May 9, 2008

   Decision

   Matter of: Mark Whetstone--Designated Employee Agent

   File: B-311284

   Date: May 9, 2008

   Mark Whetstone, Designated Employee Agent, the protester.

   Barbara Walthers, Esq., Department of Homeland Security, for the agency.

   Edward T. Goldstein, Esq., and Christine S. Melody, Esq., Office of the
   General Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest filed by Designated Employee Agent challenging agency's decision
   to issue a solicitation for processing a backlog of Freedom of Information
   Act requests without conducting a public-private competition is dismissed
   where the protester represents a class of employees whose positions are
   not at risk as a consequence of a contract awarded under the solicitation.

   DECISION

   Mark Whetstone-Designated Employee Agent,[1] President of the American
   Federation of Government Employees (AFGE) Local 3928, protests the
   issuance of solicitation No. HSSCCG-08-R-00001, a set-aside for
   service-disabled veteran-owned small business concerns, by the Department
   of Homeland Security, U.S. Citizenship and Immigration Service (USCIS),
   National Records Center at Lee's Summit Missouri, for services in support
   of processing the agency's backlog of Freedom of Information Act (FOIA)
   requests.[2] Mr. Whetstone argues that the solicitation was issued in
   violation of law and Office of Management and Budget (OMB) Circular A-76.

   We dismiss the protest.

   USCIS maintains a staff of approximately 80 federal employees to process
   FOIA requests. According to the agency, processing FOIA requests is a
   labor-intensive requirement. Presently, there is a substantial backlog of
   requests which have not been processed. In an effort to address this
   backlog, on February 13, 2008, the agency issued the solicitation here
   seeking a contractor to process a maximum of 65,000 "Routine (Track 1) or
   Complex (Track 2) backlogged FOIA requests" over a period of time of up to
   2 years.[3] Agency Report (AR) at 2.

   The protester filed this protest challenging the issuance of the
   solicitation on February 22. Specifically, Mr. Whetstone argues that the
   agency is violating the Financial Services and General Government
   Appropriations Act, 2008 (enacted as Division D of the Consolidated
   Appropriations Act, 2008, Pub. L. No. 110-161, sect. 739(a), 121 Stat.
   1844, 2029-31 (2008)), section 327 of the National Defense Authorization
   Act for Fiscal Year 2008, and OMB Circular A-76 by converting a function
   performed by federal employees to private sector performance without first
   conducting a public-private competition to determine which is more
   cost-effective.[4]

   The agency argues that Mr. Whetstone's protest should be dismissed because
   he does not qualify as an "interested party" to challenge the agency's
   decision to proceed with selecting a private sector firm to perform the
   FOIA backlog work since no federal employee will be replaced as a result
   of the contemplated contract--"the government employees will continue to
   do the same jobs they are currently doing," there will be "no changes to
   their duties, work hours, . . . benefits, or other working conditions,"
   and when the contract ends, "the government employees will continue
   processing FOIA requests and [the agency] will be able to maintain
   compliance with the FOIA law." Protest, Attach. 7, E-mail from Director of
   USCIS National Records Center, Dec. 20, 2007.

   The issue of whether federal employees qualify as "interested parties" for
   the purpose of protesting public-private competitions conducted pursuant
   to A-76 has a lengthy history. Prior to the current version of the A-76
   Circular, our Office held that the then-current language of the
   Competition in Contracting Act (CICA), 31 U.S.C. sections 3551-56 (2000)
   did not permit representatives of in-house government competitors to
   protest the conduct or outcome of a public-private competition conducted
   pursuant to the Circular before our forum. American Fed'n of Gov't
   Employees et al., B-282904.2, June 7, 2000, 2000 CPD para. 87 at 3-4.

   As a result of the significant revisions to the Circular in 2003, we again
   considered whether an in-house entity might have standing to file a
   protest here regarding the conduct or outcome of a public-private
   competition under the 2003 Circular. Again we concluded that without a
   change to the language in CICA, representatives of in-house government
   competitors could not pursue a protest before our forum. Dan Duefrene et
   al., B-293590.2 et al., Apr. 19, 2004, 2004 CPD para. 82 at 4-5.

   On the same day that the Dan Duefrene decision was issued, the Comptroller
   General sent a letter to the cognizant congressional committees,
   explaining that, because an in-house competitor did not meet the CICA
   definition of an interested party, GAO was required to dismiss any protest
   that an in-house competitor filed. In the letter, the Comptroller General
   recognized that policy considerations, including the establishment of a
   level playing field between public and private sector competitors, a
   principle unanimously agreed to by the congressionally-chartered
   Commercial Activities Panel, weighed in favor of allowing certain protests
   by in-house competitors with respect to A-76 competitions and, as a
   result, Congress might want to consider amending CICA to allow our Office
   to decide such protests.

   Consistent with that letter, Congress expanded the definition of an
   "interested party" that could file a bid protest. Specifically, CICA was
   amended to provide that the term "interested party"

     includes the official responsible for submitting the Federal agency
     tender in a public-private competition conducted under Office of
     Management and Budget Circular A-76 regarding an activity or function of
     a Federal agency performed by more than 65 full-time equivalent
     employees of the Federal agency.

   Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005,
   Pub. L. No. 108-375, sect. 326(a), 118 Stat. 1811, 1848 (2004). Given our
   view that "it is for Congress to determine the circumstances under which
   an in-house entity has standing to protest the conduct of an A-76
   competition," 70 Fed. Reg. 19,679 (Apr. 14, 2005), we amended our Bid
   Protest Regulations to provide that

     [i]n a public-private competition conducted under Office of Management
     and Budget Circular A-76 regarding an activity or function of a Federal
     agency performed by more than 65 full-time equivalent employees of the
     Federal agency, the official responsible for submitting the Federal
     agency tender is also an interested party.

   4 C.F.R. sect. 21.0(a)(2) (2005).

   As set forth above, CICA and our Bid Protest Regulations conferred
   interested party status on the individual responsible for submitting the
   agency tender, and did not confer such status on any other individual
   purporting to represent the employees of the agency who are engaged in the
   performance of the activity or function subject to the public-private
   competition.[5]

   In section 326 of the National Defense Authorization Act for Fiscal Year
   2008, codified at 31 U.S.C. sect. 3551(2), Congress again amended the
   definition of an "interested party," thereby granting to federal
   employees, through an agent which they designate, protest rights involving
   A-76 competitions.[6] Through this change, Congress sought to "give
   federal employees the same right to appeal the outcome of a public-private
   competition that contractors competing against those employees already
   have." H.R. Rep. No. 110-477, at ____ (2007) (Conf. Rep.). In relevant
   part, section 3551(2) was amended as follows:

   (2) The term "interested party"--

                                    * * * *

   (B) with respect to a public-private competition conducted under Office of
   Management and Budget Circular A-76 with respect to the performance of an
   activity or function of a Federal agency, or a decision to convert a
   function performed by Federal employees to private sector performance
   without a competition under Office of Management and Budget Circular A-76,
   includes--

   >

                                    * * * *

   (ii) any one individual who, for the purpose of representing the Federal
   employees engaged in the performance of the activity or function for which
   the public-private competition is conducted in a protest under this
   subchapter that relates to such public-private competition, has been
   designated as the agent of the Federal employees by a majority of such
   employees.

   31 U.S.C. sect. 3551(2).[7]

   As noted above, prior to this amendment, only private sector offerors and
   agency tender officials qualified as interested parties for the purpose of
   protesting to our Office A-76 public-private competitions. See Lawrence C.
   Drake, B-298143, Apr. 7, 2006, 2006 CPD para. 63.

   Mr. Whetstone maintains that he qualifies as an interested party under 31
   U.S.C. sect. 3551(2) since he has been designated by a majority of the
   federal employees who are presently performing the FOIA processing
   "function" to represent them in this protest and because he is challenging
   the agency's decision to convert the FOIA processing function to
   contractor performance without an A-76 competition.[8]

   We conclude that Mr. Whetstone does not fall within the definition of an
   interested party because his challenge does not in fact concern a
   "decision to convert a function performed by Federal employees to private
   sector performance without a competition." In this regard, the record
   reflects that the agency is merely seeking to supplement the existing
   federal employee workforce performing the FOIA processing function at
   issue with a contractor--the existing workforce's current work is not
   being converted to private sector performance. Under these circumstances
   the interested party provision relied upon by Mr. Whetstone has no
   application.

   We recognize that as a consequence of our interpretation, federal
   employees' jobs must be at stake in order for their designated agent to
   qualify as an interested party to challenge an agency's conversion of a
   function to performance by the private sector. Mr. Whetstone argues that
   Congress never intended that federal employees be required to demonstrate
   that their jobs are at risk before filing a protest with our Office, since
   the statute merely references "functions" and not jobs. Protester's
   Comments, Mar. 31, 2008, at 3. In this argument, Mr. Whetstone suggests
   that regardless of any actual harm, Congress has granted federal employees
   interested-party status "to benefit taxpayers"--bestowing upon them
   standing to enforce agencies' use of the public-private competition system
   to justify their choices of how to obtain services for the ultimate
   benefit of taxpayers. Id.

   Rather than leveling the playing field between public and private sector
   competitors, such a conclusion would endow federal employees with protest
   rights significantly beyond those of private-sector protesters, who must
   in fact establish harm as a consequence of agency action. M&M
   Investigations, Inc., B-299369.2, B-299369.3, Oct. 24, 2007, 2007 CPD
   para. 200 at 5 n.3 (stating "[c]ompetitive prejudice is an essential
   element of a viable protest); Trauma Serv. Group, B-254674.2, Mar. 14,
   1994, 94-1 CPD para. 199 at 6. Prejudice is one of the fundamental tenets
   of our protest forum and a vital element of our process, since it ensures
   that the parties have a real stake in the outcome of the issues raised and
   that the questions presented will be addressed by parties with a true
   appreciation and understanding of the consequences of the outcome. See
   Lujan v. Defenders of Wildlife, 504 U.S. 555, 581 (1992) (Kennedy, J.,
   concurring) (stating requirement for showing of "concrete injury" in a
   case "preserves the vitality of the adversarial process by assuring both
   that the parties before the court have an actual, as opposed to professed,
   stake in the outcome, and that `the legal questions presented . . . will
   be resolved, not in the rarified atmosphere of a debating society, but in
   a concrete factual context conducive to a realistic appreciation of the
   consequences of judicial action" (citing Valley Forge Christian College v.
   Americans United for Separation of Church and State, Inc., 454 U.S. 464,
   472 (1982))). There simply is nothing in the statute itself or the
   legislative history evidencing Congressional intent to alter our protest
   forum in the fundamental manner suggested by the protester. Absent such a
   clear expression, we will not read the statute to effect such a change.

   The protest is dismissed.

   Gary L. Kepplinger
   General Counsel

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

   [1] As discussed more fully below, recently enacted changes to our bid
   protest statute grant interested party status to any one individual who
   has been designated as the agent of federal employees for purposes of
   representing them in a public-private competition, or for purposes of
   arguing that a public-private competition is required under the
   circumstances presented. Hence, we will adopt the term "designated
   employee agent" to refer to both the protester and the person selected to
   represent federal employees in these challenges. See National Defense
   Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, sect. 326,
   122 Stat. 3, 62-63 (2008).

   [2] FOIA, 5 U.S.C. sect. 552, was enacted in 1966 and generally provides
   persons with the right to request access to federal agency records or
   information. All executive branch agencies are required to disclose
   records upon receiving a written request, except for those records (or
   portions thereof) that are protected from public disclosure by one of nine
   exemptions or three special law enforcement record exclusions set forth
   under FOIA. NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 136 (1975).

   [3] According to the agency, "government employees will conduct a 100%
   review of the contractor's work and make final determinations regarding
   the release or withholding of information" in response to the request. AR
   at 3.

   [4] The protester also argues that the agency is acting in violation of
   the Anti-Deficiency Act (31 U.S.C. sect. 1341(a)(1)(A)) as a consequence
   of its alleged violation of Pub. L. No. 110-161, which prohibits executive
   agencies from expending funds to "convert to contractor performance an
   activity or function" that is performed by more than 10 Federal employees
   unless, among other things, the conversion is based upon the results of a
   public-private competition.

   [5] The "official responsible for submitting the Federal agency tender" is
   commonly known as the agency tender official, or ATO. Alan D. King,
   B-295529.6, Feb. 21, 2006, 2006 CPD para. 44 at 3 n.4.

   [6] In expanding the "interested party" definition, the statute also
   deleted the provision that otherwise limited protests of A-76 competitions
   by ATO's to those competitions involving 65 or more full-time equivalent
   employees of a federal agency.

   [7] As a consequence of this statutory change, our Office recently issued
   proposed changes to our Bid Protest Regulations. See 77 Fed. Reg.
   15,098-101 (Mar. 21, 2008).

   [8] Mr. Whetstone made an affirmative representation that he has been
   designated by a majority of the agency employees presently processing FOIA
   requests as their agent for filing this protest. The agency has not
   challenged this representation.