In a case entitled InfoPoint, LLC, a small business protested the terms of a proposal, which was issued by the Air Force. The Air Force insisted that the unpopulated Joint Venture (JV) must obtain a top-secret security facility clearance (FCL) when the partners to the JV both have such clearances. The small business protested, and the GAO found for the small business–allowing an unpopulated JV to use the FCL of its partners. That was the first finding many comments grabbed onto, but there is a second point that is just as important, which was reinforced in this case.
The second point of the case was when a law takes effect—that is, are enabling regulations required when Congress is silent on that point or makes no clear direction otherwise? Importantly, the GAO found that where a statute has no effective date, absent clear direction by Congress to the contrary, the statute takes effect on the date of its enactment. If Congress directs an agency to pass regulations, however, the GAO found it has no basis to sustain a protest where the agency has yet to pass those regulations.
The law from National Defense Authorization Act (NDAA) of 2020 and the subsequent Small Business Administration (SBA) regulations passed after the NDAA, recognized that a security clearance for a Joint Venture is not required when both parties to the JV have the requisite clearance. The Air Force argued against allowing those provisions to control and the small business affected protested and won. The GAO found that the small business could have won on the basis of the clear language of the statute but went on to find that the SBA’s regulations on this point agreed with the statute and the Air Force was not granted deference because even through the FAR encompasses NIPSOM guidelines, the Department of Defense has NOT issued regulations. Accordingly, the GAO did not need to reach the question of which regulations control. The GAO went on to strongly imply that even if Defense regulations were issued, the NDAA was clear on this point and no contradictory regulations would be entertained. InfoPoint Decision