Federal government procurement in the United States may be affected by a recent major decision of the U.S. Supreme Court. In June, the Supreme Court in Loper Bright Enterprises v. Raimondo reversed a four-decade-old practice of courts deferring to federal agencies’ interpretation of laws. It overruled a test established in 1984 in Chevron v. Natural Resources Defense Council (referred to as the Chevron test or doctrine), under which the courts accepted an agency’s reading of a statute that was ambiguous provided the agency’s interpretation was reasonable. A recently published article examines the potential impact of the Supreme Court decision on government procurement cases that may be brought before federal courts in the future.
Professor Christopher Yukins of the George Washington University Law School and two colleagues (Kristen Ittig and Nicole Williamson) have examined the Loper Bright Enterprises decision in “The Sentinel Stirs: Government Procurement After Loper Bright Enterprises.” In the Briefing Paper, published in August by Thomson Reuters, they set out the context for the Court’s decision, analyze its scope and significance, and speculate on how it may affect government procurement issues such as green procurement.
To provide the context for the Loper Bright decision, the article examines the Chevron doctrine, including its elements and how it came to be challenged. The authors point to Colombia Law Professor Merrill’s assessment that the challenge to the Chevron test arose as part of a “crisis of legitimacy” in the administrative state where administrative agencies play a dominant role. The crisis was rooted in the Chevron test, which shifted substantial power to the executive branch. According to Professor Merrill, ‘The latest crisis of legitimacy appears to have been triggered by efforts of the Obama Administration to tackle climate change and immigration reform by expanding existing administrative authority.”
In examining the Chevron doctrine, Professor Yukins and his co-authors examine how appellate courts have applied the doctrine to federal procurement cases over the past 40 years. They point out that the Federal Circuit Court regularly deferred to the Federal Acquisition Regulation (FAR), “the core set of procurement rules that reflects over a century of regulatory development.” They also cite cases in which the court deferred to other procurement-related regulations, including the Small Business Administration’s rules regarding challenges to small-business set-asides and the Department of Defense’s implementing regulations under the Cargo Preference Act of 1904.
The article reviews the Loper Bright decision in detail, explaining that the Court overturned the Chevron doctrine because it considered statutory interpretation a question for the courts, not the agencies. It also notes that the court “signaled that more respect for an agency’s interpretation may be in order when—as is the case with the FAR—Congress has expressly delegated rulemaking authority to the agency.”
The authors conclude that the Loper Bright decision "leaves many questions unresolved.” They point out that the “the courts’ new approach may disrupt uniformity in the law as different courts review agencies’ interpretations in different ways.” These developments will extend to public procurement. The authors speculate on issues unique to procurement law that may arise in light of the decision, such as green procurement, Buy American preferences, and bid protests.
Professor Yukins and his colleagues summarize the Loper Bright Enterprises opinion as expressing the view that “judges are sentinels of the law, tasked to check agency missteps or overreaches against the law—in public procurement as in the broader realm of administrative law.”
The Briefing Paper concludes with “guidelines” to assist in understanding the potential impact of the landmark Supreme Court decision in the public procurement arena.
Jean Heilman Grier
September 25, 2024