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Postal Service Revises Its Regulations on Disagreements (i.e., Bid Protests), National Star Route Mail Contractors Association Newsletter

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2.01.10

When entering the postal world that we know and love, we often encounter new and different language. This language becomes second nature to us. For example, a "highway contract" in the postal world means a contract to transport mail by surface road. You probably don't think of anything else when you hear that term. But in the real world, a "highway contract" means a contract to build or maintain a highway.

A relatively new example of this postal-only language is something called a "disagreement." This is the word used to describe what the rest of the government contract world would call a "protest." The Postal Service's disagreement procedures have been around now for several years, but have recently been revised, so this would be a good time to review them.

The Postal Service's disagreement resolution procedures are set out in 39 C.F.R. § 601. These regulations set out a procedure under which a supplier can file a protest or disagreement concerning the Postal Service's acquisition of property or services. Typical examples would be a supplier's disagreement with the terms of a solicitation or a contract award decision. For example, you could use this procedure to challenge a solicitation that contained unrealistic or unclear requirements, or an award decision that you believe was wrongly made. In addition, this procedure may be used to challenge the non-renewal of a transportation contract.

Step One

There are actually two steps to this process. The first step is to "lodge" (i.e., file) the disagreement with the contracting officer (CO). You must do this within 10 calendar days from when you first become aware of whatever it is you are protesting. Or, if you are protesting the terms of a solicitation, you must lodge the disagreement before offers are due.

Once you've lodged your disagreement, the CO has up to 10 calendar days to mull it over and get back to you. An alternative dispute resolution (ADR) mechanism may be used, if the parties wish. If you are satisfied with CO's resolution of the matter, then that's the end of it.

Step Two

But if you are not satisfied with the CO's resolution, or if the contracting officer has not responded within 10 calendar days after you lodged the disagreement, then you may proceed to the second step. This is to lodge the disagreement with the Supplier Disagreement Resolution Official (SDRO) at USPS Headquarters To be timely, you must lodge this action within 10 calendar days after the CO has issued a decision, or should have issued a decision. The SDRO will then review your disagreement; obtain further information from you, the CO, and others; and, ultimately, issue a written decision. The goal is that an SDRO decision will be issued within 30 days after the disagreement is lodged. The USPS website eventually publishes these decisions.

The SDRO is a contracting officer and has the authority to grant remedies that include, but are not limited to, the following: (1) directing the CO to revise the solicitation, or issue a new one; (2) directing the CO to re-compete the requirement; (3) directing the CO to reevaluate the award decision; and (4) directing the CO to terminate the contract or refrain from exercising contract options. With respect to disagreements concerning a non-renewal decision, the SDRO presumably may direct the CO to conduct a renewal negotiation.

What if you are unsatisfied with the SDRO's decision? According to the Postal Service's regulations, the SDRO's decision may be appealed to a Federal court, but only based upon an alleged violation of regulation or statute. That supposed limitation is not just presumptuous, it's utter nonsense. Congress has enacted legislation providing that suppliers may challenge Postal Service procurements before the U.S. Court of Federal Claims and that court – not the Postal Service – decides the extent of its jurisdiction. As is the case when it reviews protests arising from other agency procurements, the court will conduct its own independent review and will not be bound by anything stated in the SDRO decision.

The regulations also seek to require a supplier to go through the SDRO process before bringing a challenge in federal court. Once again, this is unenforceable. A supplier need not "exhaust its administrative remedies" before challenging a government procurement action. Nonetheless, in most cases you are better off using this procedure first, as a court challenge is more costly and disruptive than the SDRO procedure. On the other hand, if you file in federal court, your lawyer will be provided access to the entire procurement record, and you can seek a temporary stay of the challenged Postal Service action. Under the SDRO procedure, you are afforded essentially no access to the procurement record, which can limit your ability to adequately present your case. That can make a huge difference.

New Contact Information

After 17 years at Wickwire Gavin and Akerman Senterfitt, I have joined the law firm of Husch Blackwell Sanders, LLP, along with five other attorneys from our government contracts group. I will be in the firm's Washington, DC office, just a block and a half from the White House, and a short distance from USPS Headquarters. Husch has over 600 attorneys in offices across the country, including: Chattanooga, Chicago, Denver, Jefferson City, Kansas City (MO), Memphis, Omaha, Peoria, Phoenix, Springfield (MO), St. Louis, and even London, England. That should be more than enough lawyers to get you out of trouble.

If you find yourself in Washington, DC, be sure to visit me. My new contact information is:

David P. Hendel
Husch Blackwell Sanders LLP
750 17th Street, NW, Suite 1000
Washington, D.C. 20006
Direct Phone: 202.378.2356
E-Mail: david.hendel huschblackwell.com
Website: www.huschblackwell.com

Our Postal Service Contracting practice information is available through the Postal Service Contracting page.

David P. Hendel
Husch Blackwell Sanders LLP
750 17th Street, N.W., Suite 1000
Washington, D.C. 20006

202.378.2356
fax: 202.378.2319
david.hendel huschblackwell.com