Link: GAO Decision
Protestor: American Material Handling, Inc.
Agency: General Services Administration
Disposition: Protest Denied.
Agency properly terminated the protester’s contract for a mobile crane for the Department of the Air Force and reopened the competition for the crane, where the solicitation omitted a mandatory Defense Federal Acquisition Regulation Supplement clause requiring the contractor to use U.S.-flag vessels to ship the crane.
General Counsel PC Highlight:
American Material Handling, Inc. (AMH) protested the termination of its contract and resolicitation of the requirement for an all-terrain heavy duty mobile crane for Vandenberg Air Force Base, California. The RFP had neglected to include a mandatory DFARS clause which requires that a contractor use US-flag vessels when transporting any supplies by sea under the contract, but also provides that a contractor may request that the CO authorize shipment by a foreign-flag vessel if US-flag vessels are unavailable or the freight charges are unreasonable. Upon realizing the clause was omitted, the CO issued a stop work order. AMH requested that the CO waive the clause; the agency instead amended the RFP and requested revised proposals. The agency terminated the contract of AMH but had yet to make a source selection decision at the time of protest.
The GAO noted that it generally does not review challenges to the termination of a contract, as they are matters of contract administration for resolution by the boards of contract appeals or the Court of Federal Claims. Because AMH’s termination flowed from perceived defects in the award process, however, it did agree to examine the award procedures to determine whether the initial award to AMH was improper and the corrective action taken is proper. The GAO found that, by not including the necessary DFARS clause, the RFP failed to adequately reflect the agency’s needs. It then found without merit AMH’s complaint that the agency failed to disclose other offerors’ prices to level the playing field, following the agency’s disclosure of AMH’s price during debriefings with disappointed offerors. It pointed out that any prejudice to AMH is mitigated by several factors, including that the agency informed AMH of its price standing relative to other offerors and that the basis for award was best value.
The government has broad discretion to terminate a contract award for the convenience of the government. In most situations, the GAO will not be the appropriate forum for a contractor to object to their termination; the contract should instead proceed in the boards of contract appeals or before the Court of Federal Claims. However, if the government is terminating due to what it believes to be a flaw in the award process, the awardee may properly protest before the GAO.