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RJO Update: Government Contracts
October 2013

Bidders Beware: Protest Complications During GAO Shutdown

By Lauren B. Kramer and Neil H. O’Donnell


On its face, the Antideficiency Act, which prohibits agencies from incurring obligations before or in excess of an appropriation, seemingly prevents federal agencies from entering into new contracts during the government shutdown. In fact, in the days before the shutdown, the OMB issued a Memorandum for the Heads of Executive Departments and Agencies stating that "agency employees who are paid with annual appropriations and who perform an activity associated with contract or grant administration (including oversight, inspection, payment, or accounting) should generally not continue work during a funding hiatus." (See http://www.whitehouse.gov/sites/default/files/omb/memoranda/2013/m-13-22.pdf) There are, however, exceptions to the Antideficiency Act, including the Feed and Forage Act (41 U.S.C. § 6301), which permits DoD to contract for necessary clothing, subsistence, forage, fuel, quarters, transportation or medical and hospital supplies in advance of appropriations - and under which the DoD has announced that it will continue to award contracts during the shutdown. Other agencies have also made awards since the shutdown started.

At the same time, on October 1, the Government Accountability Office (GAO) declared that it would be shutting down all of its departments, including the bid protest control unit. As a result, while contracts will continue to be awarded during the federal shutdown, GAO will not be accepting or deciding protests. The only guidance provided by GAO during this period consists of the following description on its website:

Bid Protest Decisions

NOTICE CONCERNING GOVERNMENT ACCOUNTABILITY OFFICE BID PROTESTS

  1. GAO is closed due to the shutdown of the federal government. This includes the GAO bid protest office. There will be no personnel monitoring protest filings at GAO during the time our Office is closed.
  2. GAO will endeavor to decide protests within 100 days of when they are filed. If necessary, decision deadlines will be extended one day for each day that GAO is closed.
  3. Any deadline for a protest filing from a private party that falls on a day that GAO is closed is extended to the first day that GAO resumes operations. This extension operates in the same manner as when a deadline falls on a weekend or federal holiday.
  4. Any deadline for an agency filing--such as an agency report or other filing requested by GAO--may, upon request, be extended by up to one day for each day that GAO is closed.
  5. Any new protest received by GAO during the time that GAO is closed will be treated as filed on the day that GAO resumes operations.
  6. The procedures for filing a protest-related document during the time GAO is closed are as follows:
    1. GAO will continue to receive email at protests@gao.gov. The protests@gao.gov email address will be the only method by which GAO will receive filings during the time GAO is closed.
    2. GAO's mail center is closed. We will not receive any filings by U.S. Mail, commercial carrier, or hand delivery.
    3. GAO will not receive any filings submitted by fax during the time our Office is closed. The fax machines will be disabled.

Most of this is pretty straightforward – in effect deadlines are extended while GAO is closed. Noticeably missing from this guidance, however, is any mention of the ability for a protestor to get a stay pursuant to the Competition in Contracting Act (“CICA”), 31 U.S.C. §3553(c), (d). That absence is not surprising since the GAO has consistently taken the position that it does not have jurisdiction over questions pertaining to statutory stays under CICA, a matter that it regards as separate from its bid protest jurisdiction. See, e.g., Palm Beach Aviation, Inc., B-401450 et al., 2009 CPD ¶177 at 7 (“issues regarding whether an agency is complying with the CICA stay requirements are not subject to review by our Office”). It is for that reason that a challenge to an agency’s override of the stay after a protest at GAO must be taken to the Court of Federal Claims, which will consider such objections. Career Training Concepts, Inc. v. United States, 83 Fed. Cl. 215, 218 (2008).

The problem for contractors as a result of the shutdown arises because under the statute an automatic, statutory stay goes into place only “after the Federal agency has received notice of a protest with respect to such procurement from the Comptroller General and while the protest is pending.” Because GAO staff will not be working during the shutdown, GAO will not be notifying Federal agencies that protests have been filed whether agency personnel are present to receive such a notice or not. This presents a serious challenge for disappointed bidders, as the stay may be triggered only by notice "from the Comptroller General," and notification to the awarding Agency by a bidder is insufficient.

What You Can Do

The Court of Federal Claims is an alternative forum for most bid protests. (It cannot consider protests of task orders under blanket contract vehicles even if the task orders are over the $10 million threshold that triggers GAO jurisdiction.) While there is not an automatic stay at the Court, its judges do have the ability to issue a temporary restraining order (TRO) stopping performance while the protest is considered. But a protestor seeking such a TRO must convince the Court that it is likely to succeed on the merits of its protest claim, that it will suffer irreparable harm if the Court withholds the TRO, that the balance of hardships to the parties favors granting the requested relief, and that it is in the public interest to issue a TRO – a more involved (and expensive) process.  Still, if stopping performance is important, filing at the Court and asking for a TRO should be seriously considered.

In any case, keeping in touch with potential awarding agencies is critical. You should not assume that during the government shutdown notices of awards will be made as promptly as in the past, particularly to those who have lost a competition. You do not want your options in responding to the loss of a competition to be narrowed because time limits passed without your knowledge. 

How We Can Help Your Company

RJO has more than thirty years of experience as a leader in public contract law, and has assisted clients in hundreds of bid protests over the years. Our experience and knowledge means that we are particularly well suited to help companies navigate the uncharted quagmire of contract awards during this government shut down. We draw upon skilled attorneys from our offices in San Francisco and in Washington, D.C.

The content of this article is intended to provide a general guide to the subject matter, and is not a substitute for legal advice in specific circumstances

 

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