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What’s in a Brand Name? DoD to Limit Use of “Brand Name or Equal” Contract Competitions

The Department of Defense (“DoD”) has proposed a new rule limiting the use of “brand name or equal” contract competitions, calling on contracting officers to publicly justify their need for a brand name-type product before issuing a solicitation.  The rule would implement Section 888(a) of the National Defense Authorization Act of 2017, which directed the Secretary of Defense to “ensure that competition in [DoD] contracts is not limited” by brand name references without a justification under 10 U.S.C. § 2304(f).

Background

Federal procurement law requires agencies to draft competitive solicitations that describe the Government’s needs generally, rather than referencing a specific type of product.  FAR 11.104.  However, “under certain circumstances,” agencies may request a specific brand name product or its equal.  Id.  An off-brand product is “equal” if it shares the same the same salient characteristics as the brand name product.  E.g., Glem Gas S.p.A., B-414179, Feb. 23, 2017, 2017 CPD ¶ 60 at 4.

Contractors have at times challenged, through pre-award bid protests, agency decisions to reference a brand name product as unfair and unduly restrictive of competition, contrary to the Competition in Contracting Act of 1984’s (“CICA”) requirement for full and open competition.  See G.H. Harlow Co., Inc., B-266049, Jan. 26, 1996, 96-1 CPD ¶ 95 at 2-3 (denying protest that brand name or equal solicitation was unduly restrictive of competition); Hesco Bastion Ltd. v. United States, 136 Fed. Cl. 146, 154 (2018) (explaining how the agency took corrective action to remove unduly restrictive terms from its brand name or equal solicitation).  Despite that, the FAR provides that a brand name or equal solicitation is normally deemed to satisfy CICA’s competition requirement.  FAR 6.302-1(c)(2).

DoD’s Proposed Rule

DoD’s new rule would reverse the FAR’s acceptance of brand name or equal specifications for DoD procurements.  Instead, before issuing a brand name or equal solicitation, DoD contracting officers would need to execute a written justification and approval (“J&A”) in accordance with FAR 6.303 and FAR 6.304.  Those provisions generally require contracting officers to publicize their decision to award a contract by a means other than full and open competition, document their reasoning for doing so, and provide supporting data for the decision.  Additionally, FAR 6.304(a) also requires DoD contracting officers to seek the approval of a senior agency official before finalizing a J&A, including the approval of the “senior procurement executive” for acquisitions over $93 million.  FAR 6.304(a)(4); DFARS 206.304(a)(4).

Although DoD’s proposed rule would make it harder for a contracting officer to use a brand name or equal solicitation, it may also make it more difficult to file a timely pre-award bid protest of the contracting officer’s decision.

Under current law, at both the Government Accountability Office (“GAO”) and the Court of Federal Claims, a protest challenging a solicitation’s terms must be filed before the closing date for receipt of initial proposals.  A prospective protester can thus normally wait until DoD publishes its final solicitation before protesting the grounds rules of a competition, allowing for time to consider all the terms of a solicitation.  However, GAO generally holds that protests of a J&A must be filed within 10 days of their public posting on FedBizOpps.  Depending on the circumstances, if DoD’s rule is adopted, offerors who disagree with a brand name or equal determination may need to protest at GAO immediately following the publication of a J&A on FedBizOpps, rather than waiting to see a final draft of the Agency’s solicitation.[1]

What It Means

For industry, the upshot of the proposed rule is that contractors will need to track the development of a brand name or equal procurement from its earliest stages.  If the rule is adopted, contractors that provide brand name products may need to provide agencies with information to support a written J&A.  Meanwhile, contractors that could be disadvantaged by a brand name specification would have to be alert not only to the issuance of a J&A relating to a brand name specification, but also to the need to take immediate action in order to timely challenge it.  And in either case, contractors would be wise to closely monitor additional developments related to this proposed rule as it progresses through the administrative rulemaking process.


[1] The Court of Federal Claims does not use this 10-day rule, but complications could also arise at the Court depending on the length of time between a J&A’s issuance and the filing of a protest.

© 2018 Covington & Burling LLP

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About this Author

Michael Wagner, Covington, regulatory lawyer
Associate

Mike Wagner helps government contractors navigate high-stakes enforcement matters and complex regulatory regimes.

Mr. Wagner works closely with contractors across a range of industries to achieve the efficient resolution of regulatory enforcement actions and government investigations. He also conducts internal investigations of potential compliance issues, advises clients as to FAR mandatory disclosure requirements, and regularly represents clients in suspension and debarment proceedings.

1 202 662 5496
Evan Sherwood, Covington Burling Law Firm, Government Contracts Attorney
Associate

Mr. Sherwood helps clients solve problems arising from government contracts. He advises government contractors on a wide range of matters, such as compliance with procurement regulations, contract formation, and government investigations. Mr. Sherwood also represents clients in bringing and defending bid protests, including challenges to the terms of competitions.

Representative Matters

  • Successfully protested award of multiple civilian IDIQ contracts.
  • Advised contractor on responding to a solicitation for therapeutics issued by the Department of Health and Human Services.
  • Counseled life sciences contractor on drafting government subcontracts.
  • Successfully defended protest challenging award of a Navy task order.
  • Represented client during agency inquiry regarding organizational conflict of interest, resulting in favorable outcome.
202-662-5981