#GovConThoughts: Recent GAO Decision Highlights GAO's Jurisdiction Over Protests Involving Task Orders
[My #govconthoughts series provides a quick take on recent developments in the government contracting space.]
The recent bid protest decision in ELS, Inc., B-421989, December 21, 2023, 2023 CPD ¶ ___ highlights an important aspect of bid protest litigation before the U.S. Government Accountability Office ("GAO"): task order jurisdiction.
As many contractors are aware, and generally, GAO has jurisdiction over task orders where: (a) the value of the order exceeds $25 million (DOD/NASA) or $10 million (civilian) and (b) the order increases the scope, period, or maximum value of the underlying IDIQ contract. In other words, and excluding (b), where the value of the task order is below the monetary threshold, GAO will dismiss the protest for lack of jurisdiction.
Here, in this DOD effort, the awardee's proposed price was $24.8 million and its evaluated price was $25.1 million. After the protest was filed, the agency requested dismissal and argued that GAO did not have jurisdiction over the protest because the awardee's price was below the threshold. The agency's argument rested on GAO decisions stating that the value of the order, as awarded, is what controls. The agency also argued that the award amount controls (and not the evaluated price) because the solicitation included an agency clause that incorporated FAR 52.232-20, which did not obligate the agency to reimburse costs in excess of the contract amount.
The protester, on the other hand, tried to thread the needle and argued that, despite the general rule that the award amount controls, GAO also has said that the awardee's "proposed price is not the sole determinant of the value[.]” The protester also pointed to the cost-reimbursable nature of the work, which would have obligated the agency to pay the contractor for all actual and allowable costs. Thus, because the work was cost-reimbursable and because the evaluated price exceeded the threshold (i.e., showing the anticipated funds to be paid), GAO had jurisdiction.
Ultimately, GAO dismissed the protest and concluded that the "determining factor in this protest is the amount of the contract award," not the total evaluated price. GAO also said that the cases upon which the protester relied involved either unique compensation methods or unusual evaluation techniques and that because FAR 52.232-20 does not obligate agencies to reimburse contractors for costs above the contract amount, the "facts of this case provide no rationale for departing from this general rule."
This decision provides an important reminder on task order jurisdiction. Where the order amount is below the threshold, GAO will likely dismiss the protest for lack of jurisdiction. This means that GAO will not get to the meat of the protest. Notably, and besides jurisdiction, understanding this rule may also be helpful in bidding. That is, where your price is near the threshold, it may signal (but not always) that the agency set up the procurement to potentially award the order to a contractor under the threshold so as not to trigger GAO's jurisdiction. Here, while the protester had higher marks in both technical/management and past performance, the awardee was the best value (lower price below the threshold).
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