The General Accounting Office has cast in stone new federal regulations that the Reagan administration insists are unconstitutional.
Yesterday, the GAO published its final version of regulations governing how losing bidders on federal contracts can challenge the winning bid. The rules, which implement the Competition in Contracting Act of 1984, allow the GAO to award attorneys fees from agency funds to contractors who successfully protest a bid. The regulations also require agencies to delay awarding a contract if a protest is pending before the GAO.
In October, before the rules were finalized, the Justice Department advised agency procurement officers to ignore those provisions because it believed that they were unconstitutional. Justice said the provisions amounted to a usurpation of executive-branch powers by the legislative branch, which includes GAO.
On Monday, after learning of the scope of the GAO's new final rules, Office of Management and Budget Director David A. Stockman sent a "bulletin" to all agencies, again instructing them to ignore those provisions but abide by the rest of the rules.
Stockman said the provisions were "unconstitutional because they purport to authorize the Comptroller General to exercise executive authority in violation of the principle of separation of powers."
"It's clear that OMB wants to see this issue in the courts as quickly as possible," said John Brosnan, the senior GAO attorney responsible for the rules. "We've simply ignored the Justice Department memo. We've acted as if their comments didn't exist."
Pat Servo, an analyst with the Office of Federal Procurement Policy, said the OMB had no choice but to follow Justice's opinion.
The new rule, which will take effect Jan. 15, allows firms to recover the costs of pursuing a successful bid protest except when the agency has gone ahead and awarded the contract to the protester.
Brosnan said, "All it will take is a firm that put big bucks into a protest not being able to recover the costs and taking the administration to court."
The GAO made one concession to the agencies in its final version of the rules. They had complained that they did not have enough time to provide a sufficient answer to a protest. Now losing contractors will have to file copies of their protest with an agency within one day of when the GAO receives it.
The new rule also:
* Clarifies the responsibilities of the GAO in relation to bid protests on contracts for automated data-processing equipment and services. Under the new rules, firms that file a protest with the General Services Administration's Board of Contract Appeals may not file a subsequent protest with the GAO. In addition, the GAO will not review related cases until the Board of Contract Appeals has rendered a decision.
* Clarifies that bid protests can be prompted by the opening of bids, as well as the awarding of a contract.
* Requires protesters to explain the basis for their complaint when they file their protest and not at a later date. The GAO decided that the "requirement does not seem burdensome" and that a procurement should not be disrupted further by forcing an agency to wait to determine whether there are grounds for a protest.