Link: GAO Opinion
Agency: United States Agency for International Development
Disposition: Protest dismissed.
Government Accountability Office will not consider protest of an award of subcontract as “by” the government, where record shows that prime contractor had extensive involvement in conducting acquisition, including drafting of solicitation, receipt and evaluation of proposals and selection of successful concerns.
General Counsel P.C. Highlight:
AID requests that GAO dismiss the protest as beyond GAO’s jurisdiction because the acquisition was conducted by a prime contractor for the award of subcontracts, rather than by a federal agency. The protester asserts that AID essentially directed JSI in its implementation of the statutory requirement, and that this aspect of the acquisition therefore essentially was conducted by AID through JSI. Alatech concludes that GAO has jurisdiction to consider the protest to the extent that it challenges the agency’s implementation of the statutory language. GAO agrees with the agency that the procurement at issue is not subject to GAO’s jurisdiction. Under the Competition in Contracting Act of 1984 (CICA), GAO has jurisdiction to resolve bid protests concerning solicitations and contract awards that are issued by a Federal agency. Pursuant to GAO’s authority under CICA, it initially took jurisdiction over subcontract awards by prime contractors to the federal government where, as a result of the government’s involvement in the award process, or the contractual relationship between the prime contractor and the government, the subcontract, in effect, was awarded on behalf of the government, and federal procurement laws and regulations otherwise would apply. However, in its decision U.S. West Communications Servs., Inc. v. United States, 940 F. 2d 622 (Fed. Cir. 1991), the court of appeals construed statutory language basically identical to that applicable to GAO as not conferring on the General Services Administration’s Board of Contract Appeals jurisdiction over subcontract procurements conducted for a federal agency, in the absence of a showing that the prime contractor was a procurement agent, as defined by the Supreme Court in United States v. New Mexico, 455 U.S. 720 (1982) and the court of appeals in United States v. Johnson Controls, Inc., 713 F.2d 1541 (Fed. Cir. 1983). GAO subsequently concluded that its jurisdiction generally does not extend to awards made by others for the government, and that, accordingly, in the absence of a request by the federal agency concerned, GAO would not take jurisdiction over such procurements.
However, GAO continues to take jurisdiction where it finds that a subcontract essentially was awarded by the government. GAO has considered a subcontract procurement to be by the government where the agency handled substantially all substantive aspects–in effect, took over–the procurement, leaving to the prime contractor only the procedural aspects of the procurement, i.e., issuing the subcontract solicitation and receiving proposals. In such cases, the prime contractor’s role in the procurement was essentially ministerial, such that it was merely acting as a conduit for the government. On the other hand, GAO has found subcontractor procurements were not by the government where the prime contractor handled other meaningful aspects of the procurement, such as preparing the subcontract solicitation and evaluation criteria, evaluating the offers, negotiating with the offerors, and selecting the awardee.
Here, as discussed, JSI was responsible for virtually all significant aspects of the procurement. JSI prepared the solicitation, including the evaluation criteria (taking into consideration input from AID); evaluated and scored the proposals; engaged in discussions with the prospective subcontractors; performed responsibility determinations of the prospective awardees; and made award recommendation findings that were approved by AID. AID’s assistance in implementing the statutory appropriations language and approving the award recommendations made by JSI was not sufficient to render this an acquisition conducted by AID; a procurement is only by the government where the agency controls the procurement process to such an extent that the contractor has no real input into substantive decisions. Moreover, GAO declines to adopt the view advanced by the protester–that the agency effectively conducted that aspect of the procurement relating to implementation of the statutory language–and therefore could be said to have effectively awarded the subcontract, at least in that respect. In considering whether a procurement was conducted by the government, GAO will assess the totality of the circumstances, including the question of which party was responsible for the preparation of the solicitation, the receipt and evaluation of proposals, the conduct of discussions, the selection of a prospective awardee and the conduct of responsibility determinations. As reflected in prior decisions in this area, GAO does not break the procurement into segments and consider the question on a segment-by-segment basis. The protest is dismissed.