Gavel falls for last time on IT protest jurisdiction

Wednesday is the final day that the General Services Administration's Board of Contract Appeals can accept bid protests for information technology contracts, concluding its decade-long role as an arbiter for these often-contentious cases.

Beginning Thursday, vendors seeking relief from alleged contracting errors by agencies must turn to the General Accounting Office, take their cases to federal court or seek alternative methods of dispute resolution. During the coming months, both vendors and agencies will be watching closely to see whether this aspect of procurement reform improves federal contracting or simply makes it worse.

Although the number of cases filed with GSBCA has dwindled sharply since Congress sealed its fate last winter, lawyers who represent contractors remain skeptical about whether their clients' interests will be served by GAO. Meanwhile, some executive branch officials are worried that vendors will opt for the courts, burdening agencies with litigation that lawmakers sought to diminish.

As with much of the Information Technology Management Reform Act, which repealed the Brooks Act and shut down the GSBCA as a bid-protest forum, the only certainty is that IT contracting will never be the same.

"This is coming at the same time and under the same theory as moving to [the purchase of more] commercial items," noted Devon Hewitt, a lawyer with Shaw, Pittman, Potts and Trowbridge, McLean, Va. "To the extent the government is successful in doing that, then perhaps you will move to a more streamlined relationship so that protests aren't necessary."

However, she continued, "If the government is unsuccessful you're going to find that people are going to be going a protest route nonetheless. The question is whether they will be going to the federal court."

"The elimination of GSBCA will hopefully significantly reduce the adversarial and litigious nature of the system [and result in] more of a partnering atmosphere," said Steven Kelman, administrator of the Office of Federal Procurement Policy. The possibility that vendors might turn to the courts "is a matter of grave concern to us," he said, because it "would undermine the intent of Congress to try to reduce litigation."

The uncertainty stems from a belief among vendors that GAO's protest procedures, which put more limits on evidence than GSBCA's, bias it in favor of agencies. It is a perception that GAO is trying to dispel, according to Ronald Berger, associate general counsel for the agency.

Berger said he is pulling together statistics he believes will show there has been little difference in the way GAO treats protests compared with other forums. So far, he said, he has found that in fiscal 1995, "the protester gained satisfaction," either through a favorable ruling or settlement with an agency, 40 percent of the time. "That's as good as anyone has gotten anywhere," he said.

An accurate comparison of GAO and GSBCA rulings is difficult to make, however, because existing statistics collected by the two agencies are not directly comparable. GAO only now is developing comprehensive statistics on how it disposes of cases, and Berger said they will not be available until September.

According to GAO, the agency considered 46 IT-related cases in fiscal 1995. Of those, 32 percent were dismissed, 26 percent were denied, and 41 percent either were granted or settled. A different analysis by the market research company Federal Sources Inc., which GAO disputes, found that of 65 cases, the agency dismissed 8 percent, denied 80 percent and granted 8 percent.

According to statistics provided by GSBCA, during the same period, 72 percent of the board's 194 cases were dismissed for various reasons. Of the remainder, the board sided with the protester at least partially in 35 percent of its cases and denied the rest.

"I think that historically there has been some tendency to exaggerate the robustness of the GSBCA process and exaggerate the supposed weakness of the GAO process, so I think there is some truth to their evaluation," said William Kovacic, a law professor at George Mason University, Fairfax, Va. But, he continued, without competition from GSBCA, it is possible GAO will face less pressure to scrutinize agencies closely.

"GAO scrutiny of contract decision making and the access it provides to information to second-guess the procurement process are weaker and more deferential than GSBCA," he said. "I think we're entering an era in which protest oversight is going to be relatively feeble."

GSBCA will not disappear entirely. The board still will handle contract appeals and has been given responsibility by Congress for adjudicating shipping claims and claims concerning federal employee travel and relocation expenses.

Meanwhile, the board is exploring a role as a facilitator in cases where agencies and vendors choose alternative dispute resolution (ADR) procedures rather than protests, a practice the Clinton administration has encouraged.

Judge Stephen Daniels, the GSBCA chairman, said the board recently reached an agreement with the Federal Aviation Administration to provide ADR services under the agency's new procurement system. "We'd certainly like to become a focal point" for ADR, Daniels said, although the board "can't handle the needs of the whole government."

An FAA spokesman said the agency still is negotiating with GSBCA but that it is interested in using the board as one of several sources of "masters" to conduct ADR proceedings. The spokesman said using GSBCA is appealing because the judges have "extensive knowledge and experience" with protests and are able to resolve cases quickly.

The GSBCA staff has been cut in half over the past four years, largely because of a hiring freeze at GSA. At 27 employees, "it will be the same size as it was before we got protest jurisdiction," Daniels said.

The handful of cases remaining on the GSBCA docket will be carried to their conclusion, Daniels said, although there is some question within the legal community whether any rulings made after Wednesday can be enforced.

Tom McGovern, a lawyer with Hogan and Hartson, Washington, D.C., said that without delegations of procurement authority from GSA, which expire Wednesday, GSBCA technically cannot enforce its decisions. But "from a public relations perspective, it would be a dangerous move on the agency's part" to ignore a ruling. "If I was a protester, I would consider going into district court to try to get the ruling enforced."

Earlier this year the Defense Department urged the White House to issue regulations that would prevent GSBCA from holding enforcement proceedings or hearing supplemental protests as of Aug. 8. A July 18 letter to Defense undersecretary Paul Kaminski from Office of Management and Budget deputy director John Koskinen said there is "a possibility of legal challenge pertaining to GSBCA's authority to hear certain kinds of actions." But, the letter continued, protesters already appeared to be taking their cases "to a forum where jurisdiction is certain," so issuing additional regulations was neither "necessary nor advisable."

- John Stein Monroe contributed to this report.

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