The Justice Department has advised top federal procurement officials to ignore two provisions of a new law covering protests by unsuccessful federal contractors, saying it believes that those sections are unconstitutional.
Under the Competition in Contracting Act of 1984, the General Accounting Office for the first time can order agencies to hold up work under a contract that has been awarded if a losing bidder has filed a legitimate protest. The law also allows losing contractors who successfully challenge a contract before the GAO to recoup their legal fees.
When President Reagan signed the bill on July 18, he said he would instruct the attorney general "to inform all executive-branch agencies as soon as possible with respect to how they may comply with provisions of this bill in a manner consistent with the Constitution."
"Apparently their way to do that was to decide that the measure should be ignored," said a Senate staffer familiar with the issue.
On Oct. 17, Larry L. Simms, acting assistant attorney general for Justice's Office of Legal Counsel, told Attorney General William French Smith that those provisions were unconstitutional because the legislative branch was taking over powers of the executive branch.
That position has angered Sen. William S. Cohen (R-Maine), who sponsored the legislation. Last Friday, Cohen wrote the attorney general: "Absent a court ruling, Mr. Simms' recommendation to violate statutory provisions enacted by the Congress and signed into law by the president raises the most serious questions under the doctrine of the separation of powers."
Cohen asked Smith to reject Simms' recommendations, saying that the "unilateral decision by the executive branch to refuse to enforce a statute constitutes a usurpation of the proper role of the judiciary and a failure by the president to meet his constitutional responsibility to 'take care that the laws be faithfully executed.' "
But Simms had sent copies of the memorandum to the chairmen of the Defense Acquisition Council and the Civilian Acquisition Council. The councils, which are made up of officials from the main purchasing agencies, are writing new procurement regulations for the whole government. Simms would not comment on the issue yesterday.
In a cover letter, Simms asked the councils to distribute the memo to "any other agency that may be involved in implementation of the act."
William B. Ferguson, a deputy assistant administrator for acquisition policy at the General Services Administration and head of the Civilian Acquisition Council, said of the situation, "It really is a black hole. We've got a letter from the Department of Justice that implies that we don't have to follow that law. But it is a law."
Ferguson said the Justice Department guidance won't be incorporated into the new procurement rules until the GAO issues its final rules and the two councils work out, with the Office of Management and Budget, what position the agencies should take.
John G. Brosnan, a senior GAO attorney, said, "I don't really see how we can back off. It's a law . . . . "
Brosnan said the GAO will issue its final version of the rules in early December; the law takes effect on Jan. 15.