In 2016, the Government Accountability Office (GAO), acting in its bid protest adjudication capacity, faced a problem: a small business, Latvian Connection LLC (Latvian Connection), was inundating the GAO with bid protests. As of 18 August 2016, Latvian Connection had filed 150 bid protests in fiscal year 2016, or 5.3 percent of all bid protests filed at the GAO in fiscal year 2016. Only one of those protests was decided on the merits. Most of the remaining protests were dismissed because Latvian Connection was not an interested party. This behavior was merely a continuation of a trend. In fiscal year 2015, Latvian Connection filed 59 bid protests in one week; all of these protests were dismissed because “the 59 solicitations that Latvian Connection was challenging did not actually exist.”
Beyond the sheer number of protests filed by Latvian Connection, the tone within the filings also troubled the GAO. These filings were “typically . . . a collection of excerpts cut and pasted from a wide range of documents having varying degrees of relevance to the procurements at issue, interspersed with remarks from the protestor. The tone of the filings is derogatory and abusive towards both agency officials and GAO attorneys.” Latvian Connection also made a number of “baseless accusations,” to include alleging “GAO officials are white collar criminals . . . and that agency and GAO officials have engaged in . . . human trafficking and slavery.”
In response to this pattern of behavior, the GAO invoked its “inherent right to dismiss any protest, and to impose sanctions against a protestor [whose] actions undermine the integrity and effectiveness of [GAO’s] process” and labeled Latvian Connection a vexatious litigant. The GAO further concluded that Latvian Connection was not filing protests in order to ensure that it could compete on an equal basis for contracts and noted that the effect of Latvian Connection’s numerous protests was to expend significant agency and GAO resources into responding to baseless protests. As a result, the GAO held that Latvian Connection’s conduct constituted an abuse of process, dismissed the instant protest, and then sanctioned Latvian Connection by suspending the company from protesting to the GAO for one year from the date of the decision.
Latvian Connection completed its suspension on 18 August 2017. At that time the GAO sent Latvian Connection a note “to remind the firm of a number of important legal requirements for filing and pursuing protests . . . .” Over the next three months, Latvian Connection filed ten protests with the GAO. The GAO determined that these protests “exhibit[ed] the same pattern of abusive litigation practices that previously led [the GAO] to suspend Latvian Connection.” As a result, on 29 November 2017, the GAO once again suspended Latvian Connection, this time for a period of two years. At the conclusion of the opinion, the GAO put Latvian Connection on notice that continued “abusive litigation practices” could lead to the imposition of additional sanctions, to include “permanently barring the firm and its principal from filing protests at GAO.”
While Latvian Connection may not be a sympathetic figure, the implications of the GAO’s decisions are significant. With the stroke of a pen, the GAO both articulated and imposed a sweeping authority to bar protestors from its forum as a sanction for abuse of process. As a result, unlike every other potential contractor in the world, Latvian Connection is unable to challenge the contract award decisions of federal agencies at the GAO. This necessarily begs two important questions. First, does the GAO have the authority to suspend a contractor from protesting at the GAO, and second, how and where can a sanctioned protestor challenge the sanction?
This article argues that the GAO exceeded its authority when it sanctioned Latvian Connection; however, there is no appellate authority or other mechanism to challenge the sanction, thus raising significant concerns about the lack of oversight of GAO’s actions. Congress can and should cure this lack of oversight by making statutory changes that provide judicial scrutiny of GAO sanctions and other procedural decisions.
The first part of the article briefly explains the bid protest fora available to sanctioned contractors. This section will then focus on the GAO and summarize its history and jurisdiction over bid protests. The second part of the article examines whether the GAO has the authority to sanction protestors by barring them from its forum. The third part of the article discusses what mechanisms, if any, a sanctioned protestor has to challenge a GAO sanction. The article concludes by recommending statutory changes to ensure greater oversight of the GAO in the bid protest arena.
In fiscal year 2017, the United States obligated over $507 billion through contracts. The majority of these contracts are awarded through a competitive, transparent bidding process. This competitive process seeks to ensure that the U.S. Government is getting a fair price for the contracted procurement and that all potential contractors have an equal opportunity to bid on the procurement. Given the amount of money at stake each fiscal year, it is no surprise that disputes arise over whether a contract was properly awarded. There are several fora where contractors can protest an agency’s award of a contract: with the agency itself; at the GAO;and to the United States Court of Federal Claims (COFC).
The GAO, a legislative agency, was established as the General Accounting Office in 1921 by the Budget and Accounting Act of 1921. Originally, there was no express statutory authorization for the GAO to hear bid protests. Instead, that authority was interpreted to arise from the GAO’s authority to settle all claims and accounts of the United States. In 1984, the Competition in Contracting Act of 1984 (CICA) was enacted. This statute granted the GAO express statutory authority to hear bid protests.
Any disappointed offeror may protest an agency’s award of a contract to the GAO. The GAO’s procedures include a limited right for a protestor to challenge an unfavorable decision from the GAO. A protestor may request reconsideration of a bid protest decision, but the request for reconsideration must be filed with the GAO “not later than 10 days after the basis for reconsideration is known or should have been known” and must be based on new facts or law that were not known to the party at the time of the protest. This is the only mechanism to review a bid protest decision of the GAO.
From 1970 to 2001, federal district courts had jurisdiction over bid protests. The Administrative Dispute Resolutions Act of 1996 (ADRA) expanded the COFC’s “jurisdiction to encompass all bid protests” and imposed a sunset provision on federal district court’s jurisdiction over bid protests. This sunset provision took effect in 2001. As a result, federal district courts no longer have jurisdiction to hear bid protests.
A disappointed offeror also has the right to file a protest with the COFC. The COFC does not act as an appellate court for GAO decisions. Rather, a disappointed offeror has the right to protest to both the GAO and the COFC. Decisions by the COFC may be appealed to the U.S. Court of Appeals for the Federal Circuit (CAFC).
III. Questioning GAO’s Authority to Impose Sanctions in Latvian
In the Latvian decisions, the GAO grounded its authority to impose sanctions against vexatious litigants in its “inherent right . . . to impose sanctions against a protestor [whose] actions undermine the integrity and effectiveness of [GAO’s] process.” Before examining whether the GAO possesses this inherent authority, and if so, whether as applied to the facts in the Latvian decisions, its exercise of that inherent authority was appropriate, it is necessary to examine whether there is any statutory or regulatory authority for GAO’s actions.
A. Statutory Authority
The GAO’s bid protest authority is codified at 31 U.S.C. §§ 3551-57. While there is no explicit statutory authority for the GAO to impose sanctions on protestors, there is authority for the GAO to dismiss a protest that is either frivolous or fails to state a valid basis for protest. However, there is no express statutory support for the GAO to sanction protestors by barring them from its forum.
On the contrary, the statute requires the GAO to consider every protest filed by an interested party, stating that “a protest concerning an alleged violation of a procurement statute or regulation shall be decided by the Comptroller General if filed in accordance with [the CICA statutes governing the GAO]” and that “[pursuant to regulations promulgated by the GAO] the Comptroller General shall decide a protest submitted to the Comptroller General by an interested party.” In other words, if a protest is filed in accordance with the statute or the regulations promulgated by the GAO, then the GAO must decide the protest. This necessarily requires the GAO to at least review the protest to determine whether it is in compliance. Prospectively dismissing future protests, which is the practical effect of the suspensions in the Latvian decisions, conflicts with these requirements. Thus, not only is there no express statutory authority for the sanctions in the Latvian decisions, the sanctions themselves violate two provisions within the statute.
B. Regulatory Authority
If the statutes governing the GAO’s bid protest function do not authorize the sanctions levied against Latvian Connection, is there regulatory support for the GAO’s actions? The statutes that codified the GAO’s bid protest authority specifically authorized the GAO to promulgate regulations to govern its bid protest process. Those regulations are codified at 4 C.F.R. Part 21.
These implementing regulations focus on the procedures for filing, responding to, and adjudicating a bid protest. As a result, these regulations flesh out and identify the contours of the GAO’s bid protest authority to a greater degree than the statutes mentioned above. However, they only authorize sanctions in one limited circumstance: as punishment for violating the terms of a protective order.
The GAO may admit counsel to protective orders if the GAO deems it necessary for a party to view protected information in order to resolve the protest. If the terms of the protective order are violated, the GAO may impose “such sanctions as GAO deems appropriate, including referral to appropriate bar associations or other disciplinary bodies, restricting the individual’s practice before GAO, prohibition from participation in the remainder of the protest, or dismissal of the protest.” These sanctions primarily focus on punishing the offending attorney; the only sanction that would directly punish the protestor itself provides for dismissal of that protest.
There is no enumerated authority to sanction the protestor by suspending its access to the GAO forum; however, the authority is drafted as being non-exhaustive, which provides some support for a Latvian-style sanction for violating a protective order. But the Latvian decisions did not involve a violation of a protective order. As such, the sanctions listed in 4 C.F.R. § 21.4(d) were not triggered by Latvian Connection’s conduct, and 4 C.F.R. Part 21 does not provide any other regulatory basis to sanction a protestor.
C. Inherent Authority
The GAO justified the sanctions in the Latvian decisions not by recourse to statutory or regulatory authority, but instead to an “inherent right of dispute forums to levy sanctions in response to abusive litigation practices.” To support this assertion, the GAO cited to a previous bid protest decision, PWC Logistics Servs. Co. KSC(c), and a 1980 United States Supreme Court decision, Roadway Express, Inc. v. Piper. The former is readily distinguishable from the facts in the Latvian decisions, while the latter raises significant questions as to whether the claimed authority extends to a quasi-judicial administrative body. This section argues that (1) the GAO as a quasi-judicial administrative agency is not empowered with the inherent powers of a court that it claims in the Latvian decisions; (2) even if the GAO is so empowered, it does not possess power to suspend protestors from its forum; and (3) even if the GAO does possess this specific power, Latvian Connection was afforded insufficient due process to justify its use in the Latvian decisions.
1. A Federal Court’s Inherent Authority to Police its Forum Does Not Extend to the GAO
The United States Supreme Court first identified an inherent power residing within the federal judiciary in 1812, holding that “[c]ertain implied powers must necessarily result to our Courts of justice from the nature of their institution . . . . [O]ur Courts no doubt possess powers not immediately derived from statute.” Virtually every United States Supreme Court case that confronts the scope of a court’s inherent power, to include Roadway Express, cites back to Hudson. Justice Antonin Scalia described this inherent power thusly:
Article III courts, as an independent and coequal Branch of Government, derive from the Constitution itself, once they have been created and their jurisdiction established, the authority to do what courts have traditionally done in order to accomplish their assigned tasks. Some elements of that inherent authority are so essential to ‘[t]he judicial Power,’ U.S. Const., Art. III, § 1, that they are indefeasible, among which is a court’s ability to enter orders protecting the integrity of its proceedings.
In every opinion, this power is framed as inherent to federal courts. In Roadway Express, the Court speaks of “federal courts.” In Chambers, it is “federal courts” and “Article III courts.” In Link, it is “federal trial court,” and in Dietz it is “federal district court.” This frame makes sense when Hudson is read in conjunction with Justice Scalia’s dicta above. The inherent power identified in Hudson stems from Article III of the U.S. Constitution, and by extension applies to the federal judiciary. The Court in Degen expressed this most clearly: “Courts invested with the judicial power of the United States have certain inherent authority to protect their proceedings and judgments in the course of discharging their traditional responsibilities.”
However, the GAO is not part of the federal judiciary. When acting in its bid protest capacity it is not a federal court. It derives no authority from Article III of the U.S. Constitution. The GAO implicitly acknowledges this in Latvian I by recasting the inherent power it claims as belonging to “dispute forums” instead of courts. This term does not appear anywhere else in the case law. There is no support in Hudson or its progeny, to include Roadway Express, for such an expansion of the fora that can claim this inherent power. Without explanation or justification, the GAO has claimed, and exercised, a power belonging to the federal judiciary and rooted in Article III of the U.S. Constitution. The GAO has failed to demonstrate that this inherent power extends to administrative agencies, and the case law that the GAO relies on explicitly limits this power to the federal judiciary.
2. The GAO Does Not Possess An Inherent Authority to Bar Protestors From Its Forum
Assuming arguendo that the GAO can claim the inherent powers of a federal court, were the imposed sanctions, a one-year suspension from its bid protest forum followed by a two-year suspension, permissible? In 2016, the United States Supreme Court in Dietz v. Bouldin grappled with the limits of a federal court’s inherent powers. In so doing, the Court established a two-part test to determine whether a court possesses a given inherent power:
First, the exercise of an inherent power must be ‘a reasonable response to the problems and needs’ confronting the court’s fair administration of justice. Second, the exercise of an inherent power cannot be contrary to any express grant of or limitation on the district court’s power contained in a rule or statute.
It is clear from the records in the Latvian decisions that the GAO was confronted with a litigant who was imperiling the fair administration of justice. Agency and GAO attorneys were devoting significant resources towards unmeritorious protests brought by Latvian Connection. What is less clear is whether the severe sanctions imposed, a one-year suspension from filing bid protests at the GAO followed by a two-year, were reasonable responses to the problem. If a court were to review the sanctions levied by the GAO it would apply an abuse of discretion standard of review. Given this standard of review and a pattern of vexatious litigation, a court may conclude that the sanctions levied in the Latvian decisions were reasonable responses to the specific problem facing the GAO. On the other hand, courts have recognized that dismissal is itself a severe sanction and the orders in the Latvian decisions go far beyond a mere dismissal.
While it is possible that a court will conclude that the GAO’s sanctions in the Latvian decisions were reasonable responses to the problem confronted, the specific power claimed in the Latvian decisions clearly fails the second prong of the Dietz test, which requires that “the exercise of an inherent power cannot be contrary to any express grant of or limitation on the district court’s power contained in a rule or statute.” This is because the specific power claimed in the Latvian decisions runs contrary to the statute governing bid protests at the GAO. That statute requires that “a protest concerning an alleged violation of a procurement statute or regulation shall be decided by the Comptroller General if filed in accordance with [the CICA statutes governing GAO]” and that “[pursuant to regulations promulgated by the GAO], the Comptroller General shall decide a protest submitted to the Comptroller General by an interested party.” These statutory provisions require the GAO to decide protests filed by interested parties. As discussed in Section IIIA, the sanctions in the Latvian decisions are contrary to these statutory mandates because, by barring Latvian Connection from its forum, the GAO is blocking a potentially interested party from filing a protest and, by extension, avoiding its statutory obligation to decide such protests. As a result, even if the GAO can claim the inherent powers of a federal court, it does not possess the inherent power to bar protestors from its forum as a sanction for abuse of process.
3. The GAO’s Bid Protest Forum Lacks Sufficient Due Process Protections to Permit the Sanction in the Latvian Decisions
If the GAO does possess the inherent power to sanction protestors by suspending them from its forum, was the exercise of that power in the Latvian decisions appropriate? Courts have repeatedly held that a “court’s inherent powers must be exercised with restraint” and “must comply with the mandates of due process.” Further, such sanctions “should not be assessed lightly or without fair notice and an opportunity for a hearing on the record.” This necessarily begs three related questions: (1) does Latvian Connection have a cognizable liberty or property interest under the Fifth Amendment of the U.S. Constitution; (2) if so, what process is due; and (3) was Latvian Connection afforded that process?
The Fifth Amendment of the U.S. Constitution states, in part, that “no person shall be . . . deprived of life, liberty, or property, without due process of law.” As a threshold matter, there must be a cognizable life, liberty, or property interest to trigger procedural due process protections under the Fifth Amendment. A contractor suffers a deprivation of a liberty interest when an agency makes a stigmatizing finding that negatively affects the contractor’s legal rights or status such that a right or privilege once available is no longer available.
In Paul v. Davis, the United States Supreme Court addressed whether a police department’s decision to label members of the community as shoplifters constituted a deprivation of those individuals’ property or liberty interests under the Fourteenth Amendment of the U.S. Constitution because it imposed upon those individuals a social stigma. While Davis dealt with the Due Process Clause of the Fourteenth Amendment, the Court noted that the analysis would be identical for the Due Process Clause of the Fifth Amendment. The Court held that state action that imposed a social stigma, without additional harm, was insufficient to trigger due process protections. In so holding, the Court discussed what would be necessary to invoke procedural due process protections:
In each of these cases, as a result of the state action complained of, a right or status previously recognized by state law was distinctly altered or extinguished. It was this alteration, officially removing the interest from the recognition and protection previously afforded by the State, which was found sufficient to invoke the procedural guarantees contained in the Due Process Clause . . . .
Several years later the United States Court of Appeals for the District of Columbia Circuit identified a liberty interest where a contractor was denied a contract without notice or an ability to respond based solely on a stigmatizing finding that the contractor lacked integrity. In Old Dominion, the plaintiff placed the lowest bid for a contract and, as acknowledged by the contracting officer, would have been awarded the contract, but for the fact that the contracting officer determined that the plaintiff was not responsible due to a lack of integrity. The plaintiff, and the court, styled this determination by the contracting officer a Government defamation. The plaintiff was not informed of the first contracting officer’s finding until after another contracting officer in a subsequent procurement used that finding as the sole basis to reject the plaintiff’s bid. As a result, the plaintiff was denied award of two contracts and “effectively . . . put out of business” based on a finding that it lacked integrity. The court held that a stigmatizing Government defamation against a company that results in an immediate and tangible effect on its ability to do business constituted a deprivation of a liberty interest that triggered procedural due process protections. The court stated that Paul v. Davis supported this finding because “it is precisely the ‘accompanying loss of government employment’ and the ‘foreclosure from other employment opportunity’ which is the injury resulting from the Government defamation complained of in [Old Dominion].”
The harm identified in Old Dominion, loss of government employment by virtue of being denied award of government contracts, is greater than the harm in Latvian. The GAO’s sanction does not prevent Latvian Connection from submitting bids or being awarded contracts; however, it still constitutes an injury resulting from a similar Government defamation as that found in Old Dominion. Old Dominion is best read as an application of the principle articulated by the Court in Davis: for a stigmatizing Government defamation to give rise to procedural due process protections there must also be a loss of a previously recognized right or status. In Old Dominion that was a loss of several contracts. In Latvian, it was the loss of a statutory right to access the GAO’s bid protest forum. While this loss of a right to access was only for a period of one year in Latvian I, the GAO increased the sanction to a two-year ban in Latvian II. Most troublingly, the GAO put Latvian Connection, and the public at large, on notice that it was willing to impose a lifetime ban on vexatious litigants. Under Davis, a permanent deprivation of a previously recognized right almost certainly triggers procedural due process protections.
The GAO itself recognized that Old Dominion identified a liberty interest that is triggered when an agency sanctions a protestor on the basis of a stigmatizing finding. In 2008 Congress was interested in giving the GAO greater sanction authority to deal with frivolous bid protests. The GAO’s response expressed reservations about finding protests frivolous, to include concerns that such a finding would trigger due process protections: “any system that imposes penalties on contractors for filing frivolous protests would require adequate due process protections to avoid punishing a company for filing a good-faith but unmeritorious protest.” To support this assertion, a clear restatement of the above holding from Davis, the GAO cited to Old Dominion. In sum, the GAO’s sanctions in the Latvian decisions likely constitute a deprivation of a protected liberty interest that triggers due process protections under the Fifth Amendment, raising the question: what process is due?
In De Long v. Hennessey, the Court of Appeals for the Ninth Circuit was confronted with the issue of what due process protections are required prior to sanctioning a vexatious litigant by restricting the litigant’s ability to make any future filings without the court’s permission. The court in De Long affirmed a federal court’s inherent authority to impose sanctions to regulate the practice of abusive litigants, but remanded to ensure adequate due process protections accompanied the sanction. Specifically, the court held that the litigant should have been afforded notice and an opportunity to oppose the order before it was entered.
These due process protections, notice, and an opportunity to oppose, were lacking in Latvian I. First, the specific sanction in Latvian I, a suspension from the GAO’s bid protest forum, was exercised for the first time in Latvian I. Neither the implementing statutes nor regulations list suspension as a possible sanction; nor does the GAO’s previous case law. As a result, Latvian Connection had no notice that its conduct could result in a suspension from the GAO. Second, nothing in the record suggests that the GAO provided Latvian Connection with an opportunity to oppose the order prior to imposing the sanction. On the contrary, the opinion itself states, “[b]y separate letter of today to Latvian Connection, we are advising the firm, and its principal, that both will be precluded from filing a protest in our Office for a period of one year from the date of this decision.” In other words, it appears that Latvian Connection received notice of the sanction after the order was imposed and the opinion released. As a result, in Latvian I, the GAO deprived Latvian Connection of the two foundational requirements of due process: notice and an opportunity to comment. In contrast, Latvian I provided Latvian Connection notice prior to the two-year ban in Latvian II that its conduct could result in a ban.
The GAO’s 2009 response to a Congressional mandate to recommend additional Congressional or Executive actions to disincentive frivolous bid protests suggests that the GAO does not believe that its forum has sufficient due process protections to sanction protestors for filing frivolous protests. The GAO replied to Congress that they did not feel that additional authority to disincentivize frivolous protests was necessary because the current system was adequate. In other words, the GAO declined the offer of additional statutory or regulatory sanctioning authority. The GAO did so, in part, out of a concern that the due process requirements that would come with the additional authority would be an unnecessary burden to the GAO. This was a recognition that greater sanctions would require greater due process rights to be fairly imposed, or, put another way, that the due process in place at the time was insufficient to support greater sanctions.
In sum, the GAO as a quasi-judicial administrative agency is not empowered with the inherent powers of a court that it claims in the Latvian decisions. Even if it is, it does not possess the specific power exercised in the Latvian decisions. Even if it did possess this power, Latvian Connection was afforded insufficient due process to justify the exercise of that power.
IV. Lack of Oversight and Inability to Challenge Agency Actions
If the GAO acted outside its authority in imposing the sanctions handed down in the Latvian decisions, how can a sanctioned protestor challenge the sanction? This section argues that (1) there is no meaningful process to appeal collateral GAO decisions, and (2) the sanctioned protestor cannot challenge the GAO’s actions in federal court.
A. Challenge of GAO Sanctions Is Limited To Requesting Reconsideration at the GAO
A protestor, intervenor, and the agency may request reconsideration of a bid protest decision. This request must be filed “not later than 10 days after the basis for reconsideration is known or should have been known.” “To obtain reconsideration, the requesting party must show that [the] prior decision contains errors of either fact or law, or must present information not previously considered that warrants reversal or modification of our decision; GAO will not consider a request for reconsideration based on repetition of arguments previously raised.” This process is inadequate to ensure oversight of the GAO because it is unlikely that the same entity that issued a sanction for which they have no authority will reverse that decision so soon after claiming the power in the first place.
This concern is heightened in light of the process’s low reversal rate, which also raises questions about its legitimacy. From fiscal year 2001 to fiscal year 2014 over 1,000 requests for reconsideration were filed with the GAO; only one of those requests was sustained, a sustain rate of less than 0.1 percent. This raises concerns both about the review itself and the perception of the fairness of the review.
Beyond this limited right to request reconsideration at the GAO, there is no mechanism to appeal a GAO decision. While a protestor can file a bid protest with the COFC, this is not an appeal of the GAO decision, but instead a new protest in a different forum. Additionally, that protest would only look at the merits of the COFC protest, not the GAO protest decision or any collateral rulings. Nor can a protestor appeal a GAO decision to federal district court. In short, a request for reconsideration is the only means to challenge a GAO decision.
B. The Sanction Imposed in Latvian Cannot Be Challenged in Federal Court
Can a sanctioned protestor challenge the GAO’s actions in federal court? To successfully pursue a cause of action in federal court the sanctioned protestor will have to overcome the doctrine of federal sovereign immunity. “The basic rule of federal sovereign immunity is that the United States cannot be sued at all without the consent of Congress.” This doctrine, which does not appear in the U.S. Constitution, has been traced back to English common law as well as the Congress’ ability to control the jurisdiction of federal courts. Over time, the doctrine of sovereign immunity has become interwoven with the concept of subject matter jurisdiction in federal courts, for which Congress has ultimate control, such that when the Court discusses sovereign immunity it is often referring to jurisdiction—whether Congress has provided a path to court for the cause of action at issue. For purposes of the instant inquiry this is a distinction without a difference. One can frame the problem facing the litigant in the Latvian decisions as either a quest for a waiver of sovereign immunity or for a jurisdictional hook into court. In either framing, the litigant must walk the same path. This, then, is the question: has Congress provided a statutory waiver to federal sovereign immunity that would allow Latvian Connection to challenge the GAO’s sanction in federal court?
In answering this question, it is helpful to review the statutory waivers that allow litigants to pursue claims against the United States at the COFC. 28 U.S.C. § 1491 outlines the COFC’s jurisdiction. This statute permits claims against the United States for damages “founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.” The statute also grants the COFC jurisdiction over disputes with a government contractor. Finally, the statute grants the COFC jurisdiction to hear bid protests and grant declaratory, injunctive, and limited monetary relief. Taken together, these statutory provisions permit the COFC to hear disputes arising from the bidding and award of a contract as well as disputes arising from the administration/termination of a contract, and provide for a range of remedies to include monetary, declaratory, and injunctive relief.
However, these provisions do not waive sovereign immunity or grant jurisdiction for the issue facing Latvian Connection—a sanction handed down by the GAO—because the sanction itself does not involve a dispute over the bidding or award of a contract between the contracting agency and Latvian Connection; nor does it have anything to do with the administration of an existing contract. Further, the Tucker Act does not grant jurisdiction to courts “to issue declaratory and injunctive relief aimed at affecting the GAO’s exercise of its own bid protest jurisdiction” or to review whether the GAO followed its bid protest procedures. Instead, Latvian Connection would be challenging an illegal or arbitrary and capricious agency action and would be seeking injunctive relief to block the enforcement of the imposed suspension.
Congress granted judicial review of certain executive agency actions when it passed the Administrative Procedures Act (APA). Included within the APA is a waiver of federal sovereign immunity permitting judicial review of final agency actions that are alleged to be illegal or arbitrary and capricious, provided that the litigant is not seeking monetary damages. This judicial review would seem to permit Latvian Connection to challenge the GAO’s sanction as illegal agency action and allow it to seek injunctive relief. However, this would only be the case if the APA’s judicial review provisions apply to the GAO.
The judicial review provisions of the APA waive federal sovereign immunity with respect to final agency actions. “Agency” is a term that has specific legal meanings within the context of these provisions. Agency is defined as “each authority of the Government of the United States, whether or not it is within or subject to review by another agency, but does not include . . . the Congress . . . .” Thus, for purposes of the judicial review provisions of the APA, the Congress is not an agency, and therefore the statutory waiver of federal sovereign immunity contained therein does not extend to the Congress. Is the GAO, a legislative agency, an “agency” or “the Congress” within the meaning of 5 U.S.C. § 701(b)(1)? The answer to this question determines whether Latvian Connection can challenge the GAO’s sanction in federal court.
In Vanover v. Hantman, the United States District Court for the District of Columbia confronted the issue of waiver of federal sovereign immunity as it related to judicial review of a legislative agency under the APA. Vanover filed suit against his ex-employer, the Architect of the Capitol, challenging his termination from employment. The Office of the Architect of the Capitol is a legislative agency. While Vanover filed suit pursuant to a number of different statutes, he also sued the Architect in his official capacity. The court noted that this claim was “subject to the sovereign immunity of the United States and its officers unless such immunity is waived by the [APA].” The court then stated that the Court of Appeals for the District of Columbia Circuit in Washington Legal Foundation v. United States Sentencing Commission has “interpreted the APA exemption for ‘the Congress’ to mean the entire legislative branch [which includes] the Library of Congress . . . .” The court then held that “[l]ike the Library of Congress, the Architect of the Capitol is considered part of the legislative branch” and dismissed Vanover’s claim for injunctive relief because the APA’s waiver of federal sovereign immunity did not apply to a legislative agency.
More recently, in Pond Constructors, Inc. v. Government Accountability Office, the United States District Court for the District of Columbia confronted its jurisdiction under the APA to hear a challenge to GAO agency action within the context of a bid protest. Pond concerned a dispute over the scope of redactions prior to the publication of a bid protest decision. The court dismissed the case for lack of jurisdiction, holding that the GAO was “an entity within the legislative branch” and therefore “not an agency under the APA.” In so holding, the court relied on, inter alia, the Washington Legal Foundation opinion.
These holdings in Vanover and Washington Legal Foundation make it clear that legislative agencies are part of “the Congress” within the meaning of 5 U.S.C. § 701 and therefore are not subject to the APA’s waiver of federal sovereign immunity. Additionally, the holding in Pond reiterates that the GAO is also a legislative agency and further clarifies that the GAO is not subject to the APA’s waiver of federal sovereign immunity. As such, any suit brought by Latvian Connection will be dismissed on the grounds of sovereign immunity.
V. Recommended Statutory Changes
If the GAO lacks the authority to issue the sanctions in the Latvian decisions and there is no meaningful forum in which to challenge the sanction, what is to be done? The APA needs to be amended to permit judicial review in federal district court of collateral rulings by the GAO when acting in its bid protest capacity.
The APA was drafted, in part, to ensure oversight of agency actions. That concern applies with equal force to the GAO when it is acting in its bid protest capacity because it is behaving like an executive agency in that it issues decisions that have direct financial consequences on the interested party and intervenor.
As discussed at Section IV(B) supra, current precedent interprets the term “Congress” in 5 U.S.C. § 701 to include all legislative agencies. The Congress can remove this definitional ambiguity and at the same time ensure oversight of the GAO by amending 5 U.S.C. § 701 and 31 U.S.C. § 3556 to permit judicial review of collateral rulings by the GAO when acting in its bid protest capacity.
To resolve these issues, two statutory changes are recommended: First, amend 5 U.S.C § 701 to add the following paragraph in the “for purposes of this chapter” subsection: “the Congress does not include the Government Accountability Office.” And second, amend 31 U.S.C. § 3556, the section within CICA that states the GAO is not the exclusive forum for filing bid protests, by adding the following subsection: “The Comptroller General’s decision to dismiss, deny, or sustain a protest may not be challenged in federal court.”
The first change explicitly permits judicial review of GAO agency actions. The second change, within the context of bid protests, limits judicial review to collateral agency actions. This is because the APA judicial review provisions apply to agency actions “except to the extent that . . . statutes preclude judicial review . . . .” By precluding judicial review in the portion of the Code that governs GAO bid protests, the Congress can ensure greater oversight of the GAO while balancing floodgate of litigation concerns that may arise if too much agency action is opened to judicial review.
For purposes of this article, a collateral ruling by the GAO refers to any ruling that does not address the protest, as that term is defined at 31 U.S.C. § 3551. Such collateral rulings include sanctions against protestors, rulings declining to extend a protective order to information within the protest, and rulings declining to admit an attorney to a protective order. They do not include rulings on whether a protestor is an interested party, whether a protest was timely filed, or whether the protest itself is meritorious. This distinction is drawn because the Congress has already provided an additional forum where contractors can submit bid protests: the COFC. Contractors can also appeal unfavorable COFC decisions to the CAFC. Expanding judicial review to permit review of GAO decisions on the merits of the protest would provide contractors with yet another forum in which to litigate bid protests. Not only is there no indication that this is necessary, the Congress explicitly closed the federal district court’s doors to bid protests when it sunsetted Scanwell jurisdiction in 2001. On the other hand, as discussed at length above, currently there is no forum to challenge collateral GAO rulings, which creates an inherent moral hazard that the GAO may act outside its authority, secure in the knowledge that the sanctioned party has no judicial recourse.
Latvian Connection does not make for a sympathetic figure. However, in seeking to reign in a vexatious litigant, and likely to send a message to future vexatious litigants, the GAO exceeded its authority. In so doing, the GAO inadvertently revealed a gap in judicial oversight of a legislative agency. That gap raises concerns, not because of any malintent on the part of the GAO—this article does not mean to suggest that at all—but because federal action without authority threatens both the legitimacy of the GAO bid protest forum and the appearance of fairness within that forum.
This is particularly concerning because in 2009 the GAO rebuffed Congressional efforts to expand the agency’s sanction authority against frivolous protestors. Yet a mere seven years later, the GAO has claimed as an inherent authority the type of sanction it originally declined as unnecessary. The same due process concerns that underpinned the GAO’s hesitation to request additional sanction authority apply with equal force to the agency’s actions in the Latvian decisions. The Congress can close this gap and ensure greater oversight of the GAO through minor, narrowly tailored amendments to existing statutes.