Petrillo: New rules tighten task orders

The 2008 Defense Authorization Act has important reforms for task- and delivery-order contracts. The changes set minimum standards for orders that exceed $5 million, create protest rights for orders valued at more than $10 million and set a ceiling on the size of single-award contracts.

In creating those provisions, Congress was responding to audits and reports that criticized the way agencies placed orders under these umbrella contracts. The new rules apply to all federal agencies, not only the Defense Department. They were added to the Federal Acquisition Regulation by an interim regulation published Sept. 17. 

So how do they change the day-to-day work of contracting?

For one, there are more strict competition requirements on orders that exceed $5 million. Agencies must provide all interested contractors with a solicitation that includes a clear statement of the agency’s requirements, a reasonable period to respond with a proposal, and disclosure of the significant evaluation factors, subfactors and their relative importance.

In addition, the procuring agency must provide all contractors with documentation of the basis for the award and, if requested, a post-award debriefing. As a result, the award of a major task order now has some of the same safeguards as a standard contract negotiated under Part 15 of the FAR.

The protest provisions have a $10 million threshold. The Acquisition Advisory Panel had called for protest rights to kick in at $5 million, but Congress chose the higher number.

Only the Government Accountability Office has the authority to hear protests of the award of orders that exceed $10 million. The Court of Federal Claims, which can hear most other protests, wasn’t included in this provision.

What kinds of protests are likely to find favor at GAO?  For one thing, contractors can use protests to enforce the new competition rules. If an award decision isn’t properly documented or if the reason for the award departs from the stated evaluation criteria, expect GAO to uphold a protest.

The same is probably true of the law’s other strictures. If the requirement statement isn’t clear, or there isn’t enough time to respond, or if the evaluation factors aren’t stated and ranked, then GAO might uphold a protest.

Beyond that, GAO’s track record on protests of GSA schedule orders shows what the agency is likely to do with task and delivery orders. GAO will generally look for agencies to conduct a fair acquisition. The offerors should get equal treatment in proposal evaluation and the scope and accuracy of discussions.  If not, then GAO will probably sustain a protest.

With the issuance of the interim FAR regulations, the new rules should be fully implemented. The result will be more fair and transparent process for awarding task and delivery orders.

Petrillo is a lawyer at Washington law firm Petrillo and Powell. He can be reached at jp@petrillopowell.com.