Pursuant to the bid protest provisions of the Competition in Contracting Act of 1984 (CICA) 31 U.S.C. sections 3551-3556 (2000 and Supp. IV 2004), only an "interested party" may protest a federal procurement to our Office. The issue of whether federal employees and/or their representatives qualify as "interested parties" for the purpose of protesting public-private competitions conducted pursuant to OMB Circular A-76 has a lengthy history. In 2004, this Office concluded that an in-house competitor in an A-76 competition did not meet the statutory definition of an "interested party," Dan Duefrene et al., B-293590.2 et al., Apr. 19, 2004, 2004 CPD para. 82 at 4-5, and subsequently expressed 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." See 70 Fed. Reg. 19,679 (Apr. 14, 2005).

Following our decision in Dan Duefrene, legislation was enacted that expanded the definition of an interested party. First, under the Ronald Reagan National Defense Authorization Act for Fiscal Year 2005, Pub. L. No. 108-375, 118 Stat. 1811, 1848 (2004), an ATO was given interested party status for GAO bid protest purposes, with certain limitations. See James C. Trump, B‑2999370, Feb. 20, 2007, 2007 CPD para. 40. Subsequently, under the National Defense Authorization Act for Fiscal Year 2008 (NDAA), Pub. L. No 110-181, 122 Stat. 3 (2008), enacted on January 28, 2008, the definition of an interested party was again amended, eliminating the prior limitations with regard to the number of affected FTEs, and expanding the definition to include a DEA. 122 Stat. 62.

Nonetheless, the NDAA also limited the applicability of the expanded interested party definition with regard to A-76 competitions that were ongoing at the time of the NDAA's enactment. Specifically, the Act provided that, with regard to then-ongoing A-76 competitions, the expanded "interested party" definition was only applicable to a protest that "challenges final selection of the source of performance." 122 Stat. 63. In short, the NDAA drew a distinction between permissible protest issues with regard to A-76 competitions that were already ongoing as opposed to competitions that would be subsequently initiated. For the former--that is, A-76 competitions such as the one at issue here that were ongoing at the time of the NDAA's enactment‑-the NDAA expressly limited the scope of permissible protests to those challenging the agency's final selection of the source of performance. Id. Thus, while the NDAA contemplates that, ultimately, DEAs will be authorized to protest any matter "that relates to a public-private competition," a more limited scope of protests is authorized for A-76 competitions that were ongoing--and thus, partially completed--at the time of the NDAA's enactment.

Here, none of the issues raised in the DEA's protest challenges the agency's source selection decision. That is, nothing in the protest indicates that the agency's evaluation of proposals was flawed, or asserts that the agency's conclusion that the private-sector offeror submitted the lowest cost, technically acceptable proposal, as contemplated by the terms of the competition, was inconsistent with the existing record.

Specifically, with regard to Johnson's assertions that the agency failed to complete the A-76 cost comparison within the statutory timeframe established for expenditure of appropriated funds, or the timeframe established by OMB Circular A‑76, we have held that such an allegation does not constitute a challenge to the agency's final source selection decision. Bruce Bancroft--Agency Tender Official; Sam Rodriquez--Designated Employee Agent, B-400404.2 et al., Oct. 31, 2008, 2008 CPD para. 200 at 6. Similarly, the DEA's various assertions that the A-76 competition process was improperly conducted do not constitute challenges to the agency's source selection decision. That is, all of the remaining DEA assertions regarding the alleged impropriety in the competition process--that the competed function is allegedly undergoing a reorganization; that employees' rights were violated because access to certain information was only accessible to offerors; that offerors improperly communicated with the employees who are currently performing the competed activities; and that the agency improperly performed the A‑76 competition "at OMB's direction"--are procedural matters that preceded the agency's source selection decision and, as such, are not properly within the scope of protests authorized by the NDAA.  (Gary Johnson -- Designated Employee Agent, B-310910.3, January 21, 2009) (pdf)

Under the bid protest provisions of the Competition in Contracting Act of 1984 (CICA), 31 U.S.C. sections 3551-56 (2000 and Supp. IV 2004), only an “interested party” may protest a federal procurement to our Office. This issue of whether the ATO and federal employees qualify as interested parties for the purpose of protesting public-private competitions conducted pursuant to OMB Circular A-76 has a lengthy history. In 2004, we concluded that an in-house competitor in an A-76 competition did not meet the statutory definition of interested party, Dan Duefrene et al., B-293590.2 et al., Apr. 19, 2004, 2004 CPD para. 82 at 4-5, and subsequently expressed 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.” See 70 Fed. Reg. 19,679 (Apr. 14, 2005); Mark Whetstone--Designated Employee Agent, B-311284, May 9, 2008, 2008 CPD para. 93 at 4.

Following our decision in Dan Duefrene, Congress expanded the definition of interested party. Specifically, under the Ronald Reagan National Defense Authorization Act for Fiscal Year 2005, Pub. L. No. 108-375, sect. 326(a)(2), 118 Stat. 1811, 1848 (2004), the ATO became an interested party for GAO bid protest purposes for A-76 studies involving more than 65 FTE employees initiated on or afterJanuary 26, 2005.See James C. Trump, B-299370, Feb. 20, 2007, 2007 CPD para. 40. Under the National Defense Authorization Act for Fiscal Year 2008 (NDAA), Pub. L. No. 110-181, sect. 326, 122 Stat. 3, 63 (2008), enacted January 28, 2008, the statutory definition of interested party was again amended, this time deleting the provision that limited an ATO’s interested party status to protests regarding “an activity or function of a Federal agency performed by more than 65 full-time equivalent employees of the Federal Agency.” Pub. L. No. 110-181, 122 Stat. 62. Similarly, the interested party definition was expanded to include the designated employee agent.

Section 326(d) of the NDAA, entitled “Applicability,” also specifically identified the type of protests to which the new definition of interested party was applicable, stating that the definition “shall apply” to:

(1) a protest or civil action that challenges final selection of the source of performance of an activity or function of a Federal agency that is made pursuant to a study initiated under Office of Management and Budget Circular A-76 on or after January 1, 2004; and (2) any other protest or civil action that relates to a public-private competition initiated under Office of Management and Budget Circular A-76 . . . on or after the date of the enactment of this Act [January 28, 2008].

Pub. L. No. 110-181, 122 Stat. 63.

For the reasons set forth below, we conclude that neither the ATO nor Rodriquez qualifies as an interested party under section 326(d) of the NDAA to pursue their remaining bases of protest. First, the protesters do not qualify as interested parties under section 326(d)(1) of the NDAA--that is, the protest issues that we did not previously dismiss as a result of the Navy’s corrective action do not challenge the “final selection of the source of performance” pursuant to an A-76 study initiated after January 1, 2004. Rather, the remaining issues concern whether the duration of the study exceeds timeframes established by statute and the Circular--that is, actions other than the final selection of the source of performance. Similarly, the ATO’s subsequent challenge to the Navy’s corrective action is not a protest of a “final selection of the source of performance” as required by 326(d)(1) of the NDAA for interested party status.

Further, neither the ATO nor Rodriquez qualifies as an interested party under the criteria established in section 326(d)(2) of the NDAA--that is, the protests do not “relate to a public-private competition initiated . . . on or after the date of the enactment of this Act [January 28, 2008].” Our Office has previously determined that a study is “initiated” on the public announcement date, or “start date.” Gary M. Williamson--Agency Tender Official, B-400153, Aug. 1, 2008, 2008 CPD para. 151 at 2; Jim Swistowicz--Designated Employee Agent, B-400101, July 7, 2008, 2008 CPD para. 135 at 3. The record reflects that the A-76 study here was initiated on February 7, 2006--almost 2 years prior to the January 28, 2008 enactment of the NDAA. [9] Accordingly, section 326(d)(2) of the NDAA also does not confer interested party status on the ATO or Rodriquez in this matter.

In sum, as the remaining protest issues do not involve challenges to the Navy’s final selection of the source of performance, and the study here was initiated before January 28, 2008, the ATO and Rodriquez are not interested parties to raise these issues. See Gary M. Williamson--Agency Tender Official, supra. (Bruce Bancroft--Agency Tender Official; Sam Rodriquez--Designated Employee Agent, B-400404.2; B-400404.3; B-400404.5, October 31, 2008) (pdf)

Mr. Hardison contends that the agency’s decision to remove the above workload from the TCBOC requires the agency to conduct a public-private competition. We find that Mr. Hardison is not an interested party eligible to challenge this decision.

With regard to A-76 contests, section 326 of the National Defense Authorization Act for Fiscal Year 2008, amended the definition of interested party applicable to our bid protest function as set forth in 31 U.S.C. sect. 3551(2), 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). Mr. Hardison is not an interested party under this statutory provision to protest the agency’s decision to “convert” a function performed by federal employees to private sector performance without competition, because no federal employee jobs are at risk and therefore there is no prejudice, which is an essential element of every protest. See Mark Whetsone--Designated Employee Agent, B-311284, May 9, 2008, 2008 CPD para. __ at 5-6. As stated above, the TCBOC has only four employees and none of these employees’ jobs have been eliminated or changed in any way, and the record reflects that the agency is merely seeking to use a contractor to perform tasks, not currently performed by TCBOC, relating to the dispensing of drugs.

Moreover, even if Mr. Hardison were an interested party to protest the agency’s failure to conduct a public-private competition, on the facts here, no such competition was required. In this regard, the Office of Federal Procurement Policy Act, 41 U.S.C. sect. 403 et seq., as amended by the National Defense Authorization Act for Fiscal Year 2008, requires a public-private competition prior to converting public sector jobs to contractor performance whenever the conversion involves “a function of an executive agency performed by 10 or more agency civilian employees.” National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, sect. 327, 122 Stat. 3 (2008). Similarly, Division D of the Consolidated Appropriations Act of Fiscal Year 2008, Pub. L. No. 110‑161, sect. 739(a), 121 Stat. 1844 (2007), provides, in relevant part:

(1) Notwithstanding any other provision of law, none of the funds appropriated by this or any other Act shall be available to convert to contractor performance an activity or function of an executive agency that, on or after the date of enactment of this Act, is performed by more than 10 Federal employees unless--

(A) the conversion is based on the result of a public-private competition that includes a most efficient and cost effective organization plan developed by such activity or function;

These laws make clear that a public-private competition is required when 10 or more federal employees perform the “activity or function” that is being converted to private sector performance. These laws do not require a public-private competition when fewer than 10 federal employees perform the “activity or function” at issue. Lisa Hartman--Designated Employee Agent, B-311247, May 6, 2008, 2008 CPD para. __ at 4.

As noted above, the TCBOC has only four federal employees; thus, only four employees perform the function that allegedly has been converted to private sector performance. Although the protester argues that the “activity or function” in question actually consists of the totality of the full time equivalent (FTE) employees performing VA pharmacy services that are listed in the VA’s FAIR Act inventory (260 FTEs in Tennessee and 8,900 FTEs nationwide), we do not regard this as a reasonable meaning of “activity or function” for purposes of the statutes requiring a public-private competition. Rather, we think that a reasonable reading of those statutes, under the circumstances presented here, would be that the “activity or function” protested is limited to the work performed by the TCBOC, which consists of only four federal employees. Thus, we believe that a public-private competition would not be required here, even if any of the federal employees’ jobs were at risk.  (B. R. Hardison--Designated Employee Agent, B-311275, May 29, 2008) (pdf)

In 2004 this Office concluded that an in-house competitor in an A-76 competition did not meet the statutory definition of an “interested party,” Dan Duefrene et al., B-293590.2 et al., Apr. 19, 2004, 2004 CPD para. 82 at 4-5, and subsequently expressed 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.” See 70 Fed. Reg. 19,679 (Apr. 14, 2005); Mark Whetstone--Designated Employee Agent, B- 311284, May 9, 2008, 2008 CPD para. 93 at 4.

Following our decision in Dan Duefrene, Congress expanded the definition of an “interested party” to include the official responsible for submitting the federal agency tender in an A-76 competition with regard to an activity or function performed by more than 65 full-time equivalent employees of the federal agency. Ronald W. Reagan National Defense Authorization Actor for Fiscal Year 2005, Pub. L. No. 108-375, 118 Stat. 1811, 1848 (2004).

On January 28, 2008, the President signed the National Defense Authorization Act of Fiscal Year 2008 (NDAA) into law. Pub. L. No. 110-181, 122 Stat. 3 (2008). Among other things, the NDAA again amended the statutory definition of “interested party,” this time, deleting the provision that limited an ATO’s interested party status to protests regarding “an activity or function of a Federal agency performed by more than 65 full-time equivalent employees of the Federal Agency.” Pub. L. No. 110‑181, 122 Stat. 62. However, section 326(d) of the NDAA, titled “Applicability,” also specifically identified the type of protests to which the new definition of “interested party” was applicable, stating that the definition “shall apply” to:

(1) a protest or civil action that challenges final selection of the source of performance of an activity or function of a Federal agency that is made pursuant to a study initiated under Office of Management and Budget Circular A-76 on or after January 1, 2004; and

(2) any other protest or civil action that relates to a public-private competition initiated under Office of Management and Budget Circular A-76 . . . on or after the date of the enactment of this Act.
Pub. L. No. 110-181, 122 Stat. 63.

On June 20, 2008, the Air Force requested that we dismiss the ATO’s protest here, noting that the protest does not challenge the final selection of the source of performance, but rather challenges the agency’s disclosure of information in connection with an A-76 competition that was initiated in August 2007, prior to enactment of the NDAA. Accordingly, the agency maintains that neither of the “Applicability” provisions in section 326(d) of the NDAA provide interested party status to the ATO for purposes of challenging the agency’s actions in this matter. We agree.

As the agency first points out, the ATO does not qualify as an “interested party” under section 326(d)(1) of the NDAA--that is, the protest does not challenge the “final selection of the source of performance” pursuant to an A-76 study initiated after January 1, 2004. Rather, the protest challenges agency actions taken in preparation for publication of the solicitation--that is, actions other than the final selection of the source of performance. Accordingly, section 326(d)(1) of the NDAA does not provide a basis to apply that Act’s definition of “interested party” to the ATO in this matter.

Similarly, the agency points out that the ATO does not qualify as an “interested party” under the criteria established in section 326(d)(2) of the NDAA--that is, the protest does not “relate to a public-private competition initiated . . . on or after the date of the enactment of this Act [January 28, 2008].” Rather, the protest relates to a competition that was initiated in August 2007--several months prior to the January 28, 2008 enactment of the NDAA. Accordingly, section 326(d)(2) of the NDAA does not provide a basis to apply the Act’s definition of “interested party” to the ATO in this matter.

In short, the protest does not fit within either situation that triggers applicability of the NDAA’s “interested party” definition. Accordingly, we must conclude that the ATO does not qualify as an “interested party” to protest the agency’s actions taken in connection with the pending public-private competition.  (Gary M. Williamson--Agency Tender Official, B-400153,  August 1, 2008) (pdf)

As indicated above, the public announcement date or “start date” for the current competition was September 14, 2007, prior to the January 28, 2008 date of enactment of the act. We have held, under similar circumstances, that the date on which a public-private competition is initiated is the date identified as the “start date” in the agency’s public announcement. James C. Trump, B‑299370, Feb. 20, 2007, 2007 CPD para. 40. That decision concerned an agency tender official (ATO) who protested a Circular A-76 public-private competition shortly after ATOs were defined as interested parties by the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005, Pub. L. No. 108-375, section 326(a)(2), 118 Stat. 1811, 1848. As with the act here, that act’s “applicability” section provided that the amendments in question applied to protests “initiated” after the date of enactment of the act. Id. at 2-3. As also is the case here, the indicated “start date” of the protested competition was prior to the effective date set for applicability of the provision defining ATOs as interested parties. We concluded that the procurement had been initiated prior to the effective date of the act, and that Mr. Trump therefore was not an interested party for purposes of protesting the agency’s actions. Id. at 3-4. Similarly, here, since the “start date” of the procurement was prior to the effective date of the act, Mr. Swistowicz does not qualify as an interested party to challenge the agency’s decision to conduct the public-private competition in issue or the terms of the solicitation.

Mr. Swistowicz acknowledges that section 326(a) of the act, as amended, limits his ability to protest competitions initiated before January 28, 2008, and agrees that this competition was initiated prior to that date. He asserts, however, that his protest should not be dismissed because he is challenging a source selection and, under the act, he is an interested party to challenge the source selection of any competition initiated after January 1, 2004. While the protester is correct regarding his standing to challenge a source selection, no selection has yet been made here. Thus, the protest in this regard is premature, and not for our consideration at this time. Sun Chem. Corp., B‑288466 et al., Oct. 17, 2001, 2001 CPD para. 185 at 13. (Jim Swistowicz--Designated Employee Agent, B-400101, July 7, 2008) (pdf)

On March 31, 2008, according to Mr. Henson, he learned that the agency intends to reorganize the finance and accounting services at DOL. In this regard, Mr. Henson’s protest includes an email in which a DOL employee states that “since this is a reorganization instead of an implementation of an MEO, our MEO Implementation Plan needs to be over-hauled and any reference to MEO/Competitive sourcing needs to be removed.” Protest, exh. 4, at 1-2. Mr. Henson, as the designated employee agent of the federal employees performing the function in question,[1] then filed this protest with our Office, asserting that the reorganization is an attempt to implement the MEO, and thus is prohibited under section 111.

Recently enacted changes to our bid protest statute have granted interested party status to any one individual who has been designated as the agent of the federal employees for the purposes of representing them in a public-private competition, or for purposes of arguing that a public-private competition is required. In this regard, the statute states

[t]he 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).

Here, however, an A-76 competition was already conducted and Mr. Henson is not challenging the results of that competition. Rather, he asserts that the agency is improperly implementing the results of that competition. Since the statute does not extend interested party status to a designated employee agent for purposes of challenging the implementation of an MEO following an A-76 competition, Mr. Henson lacks standing to pursue this protest.  (Bill Henson--Designated Employee Agent, B-400060, June 2, 2008) (pdf)

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. 

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. (Mark Whetstone--Designated Employee Agent, B-311284, May 9, 2008) (pdf)