MA

Pushing Contract Competitions to the Task Order Level

Published: November 09, 2022

Federal Market AnalysisAcquisition ReformContracting TrendsOMBPolicy and Legislation

Protests are moving to the task order level.

Changes to the rules that govern the federal government’s procurement system begin slowly and then occur suddenly. This is now the case with the implementation (and coming expansion) of a new acquisition rule governing task order competitions.

The impetus for the change can be found in different versions of the annual National Defense Authorization Act (NDAA) signed into law as far back as FY 2017. This post takes a look at the new rule and the potential impact it could have on federal procurement.

Congress has for years taken steps to push meaningful competition from the master contract to the task order level. A recently awarded contract vehicle is pushing things in this direction.

As mentioned above, the rule change originates in past NDAAs, specifically those enacted in FY 2017 and 2019. Here are the sections from those two bills that contractors need to know:

  • Section 825 of the FY 2017 NDAA amended Section 2305(a)(3) of Title 10 of the U.S. Code so that in cases when multiple award contracts are to be awarded there is no need to consider pricing as part of the evaluation process.
  • Section 835 of the FY 2017 NDAA raised the minimum award value for protests of DOD, NASA and U.S. Coast Guard task orders from $10M to $25M.
  • Section 876 of the FY 2019 NDAA amended Title 41 of the U.S. Code so that contracting officers do not need to consider price as an evaluation factor for awarding spots on master contract vehicles. Price is to be considered for competitions at the task order level.

Rule Implementation

A large contract vehicle run by the General Services Administration (GSA) has already introduced this legislatively-required change. Specifically, GSA’s ASTRO contract, which was awarded to 379 primes in the summer of 2021, did not require cost or price reasonableness evaluations as a factor dictating the award of master contracts. All price considerations take place at the level of task order competition.

In addition I should mention that Polaris, the GSA’s Next Generation Small Business Government-Wide Acquisition Contract (GWAC) replacing Alliant 2 Small Business also will not consider price for master contract awards to small business primes when these are awarded. Pricing will be an evaluation factor for task order competitions.

Market Implications

Pushing price evaluations to the task order level could have the following repercussions:

First, federal procurement data shows that contract spending using GWACs and Indefinite Delivery/Indefinite Quantity (IDIQ) contracts has been increasing in recent years so the number of task order protests on awards higher than $10M for the civilian sector and $25M for the Department of Defense, NASA, and the U.S. Coast Guard is also likely to increase.

Second, the ability of contractors to protest awards valued at less than $10M for the civilian sector and $25M for the DOD, NASA, and the Coast Guard could be increasingly constrained due to statutory limits on the Government Accountability Office’s power to review awards. The GAO can review task orders valued under $10M if the protest is based on an expanding scope of work, but not on other factors.

Summing up, the rule change will accelerate the award of spots on large GWACs and IDIQs, but those contracts will be akin to hunting licenses, much like GSA schedules are. The real action will take place at the task order level, albeit with restrictions on protests based on the order’s dollar value. Lose a $7M contract at the VA and competitors will have no recourse. The government will finally have found a way to stop protests before they even happen.