One of this year’s most significant Supreme Court decisions was the ruling in Loper Bright Enterprises v. Raimondo, which reversed the long-standing Chevron Doctrine. The Chevron doctrine required that federal courts defer to federal agencies in their interpretation of statutes that are silent or ambiguous on a specific issue, even if the court disagreed with the agency’s interpretation, provided the agency’s interpretation was a “permissible construction” of the law. Now that the Supreme Court has specifically overruled Chevron, litigants can argue for the best interpretation of an ambiguous statute rather than tied to an agency’s merely reasonable interpretation of it.
How does this ruling affect Government Contracting? Primarily, it will impact the implementation of new laws through new or amended FAR clauses. It allows industry to challenge how clauses are written to enforce a statute. An agency’s decision over a dispute over the interpretation of a clause enforcement could result in a challenge that the agency has overstepped its authority.
How and when these challenges occur could also affect solicitations. If an industry deems a regulation restrictive to competition, it could be challenged in the courts before proposal submission. There has already been discussion in the cyber-security area that many of the current regulations could be challenged in areas like patient privacy in health care or demands by the government to access companies’ systems for “security” purposes.
This decision does not lessen the requirement that a potential litigant demonstrate that the government is acting arbitrary and capriciously. The court also ruled that prior rulings made under Chevron would not be reversed; only new cases would be subject to Loper Bright.
I am not a lawyer but given how litigious government acquisition has become, I think over the coming years there will be many challenges of regulations and the clause that implements these regulations in contracts being challenged in the courts. Companies could try to influence requirements to make their product acceptable when it does not meet the standard under the existing regulations. Litigation of any kind could slow the acquisition process, adding additional time for the evaluation and award of an RFP.
Smarter minds than mine will be dealing with this ruling and its impact in the coming years. Decisions like this sometimes take years to truly demonstrate their impact. The Skyway team has discussed this decision among us, and we all are taking a wait-and-see attitude.