The Acquisition Improvement and Accountability Act of 2007, approved as part of the 2008 Defense Authorization Act's Section 843, provides for key changes to task and delivery order contracts. Contractors who've battled to win a spot on a task order contract vehicle only to be shut out of task order competition will be interested in these changes, which went into effect on May 26.

Fair opportunity to compete

Old rule: Agencies were required to provide contractors with a "fair opportunity to be considered" for task/delivery orders over $3,000. However, "fair" was not well-defined and many task/delivery orders were awarded before all eligible contractors were even aware that it existed.

New rule: "Fair opportunity" is better defined as providing contractors with a notice of the task/delivery order with a statement of needs; a "reasonable" period for them to provide a proposal in response; disclosure of significant factors/subfactors; a written statement documenting the basis for best value awards; and an opportunity for a post-award briefing.

Single source awards

Old rule: Multiple task/delivery contract awards were preferred.

New rule: The new statute reinforces the preference for multiple awards, and prohibits agencies from awarding task/delivery order contracts over $100 million to a single source. Any exceptions must be justified in writing by the agency head.

Task/delivery order protests

Old rule: Contractors could only protest task/delivery orders on the grounds that "the order increases the scope, period, or maximum value of the contract under which the order is issued."

New rule: Contractors can protest large task/delivery orders on any grounds, and allows for protests for any task/delivery order over $10 million.

These changes are likely to have some significant ramifications, both good and bad. The use of task order vehicles has increased dramatically over time, and now represents nearly 30% of all federal IT spending. But it's not easy to compete on these contracts. Countless times I've heard contractors complain about how difficult it is to win task orders. We know that winning a spot on a task order vehicle is simply a license to hunt, but many times task orders were awarded before most of the eligible contractors knew that it was hunting season. Section 843 is designed to provide a better playing field by ensuring that everyone is aware of the opportunities. It also gives contractors a better shot at some of the larger task orders. However, the game-changer is the ability for contractors to protest task orders awards.

Because a big chunk of contracting happens behind the task order veil, this could have a significant impact on the acquisition environment. As it stands now, there were 6.3% more protests in FY2007 than FY2006 (see the Exhibit 1). While there has been only been an overall 4% increase in protests from FY2003 to FY2007 (with fluctuations in growth and decline), the percentage of protests sustained by GAO has climbed steadily over that time.

Exhibit 1

Bid Protest Statistics, FY2003-FY2007

Will we begin to see a much higher volume of protests now that task orders can be protested? That remains to be seen, and I think it depends primarily on the vehicle. For example, only 96 of more than 6,000 task orders on the NETCENTS vehicle were more than $10 million in value (see Exhibit 2).

Exhibit 2

However, for DHS' EAGLE contract vehicle (Exhibit 3), 34 of the 157 task orders (21.6%) were above the $10 million mark.

Exhibit 3

In some cases, it's possible that a $10 million+ task order award would be worth protesting, simply because they don't come along that often.

Whatever the case, we could begin to see some agencies keeping their task orders below $10 million to avoid protest risk. Agencies could mitigate some of that risk by sticking to the "fair opportunity to compete" rules, but that's no guarantee that task order protests won't be part of their future.