Link: GAO Decision
Protestor: Asiel Enterprises, Inc.
Agency: Department of the Air Force
Disposition: Protest Sustained.
Protest challenging Air Force’s use of a Nonappropriated Fund Instrumentality (NAFI) to provide mission essential food services is sustained where the Air Force transferred the mission essential food service requirements to the NAFI on a noncompetitive basis and failed to otherwise justify the NAFI’s provision of this requirement on a sole-source basis; 10 U.S.C. § 2492 (2006) does not provide authority for the Air Force to transfer the provision of mission essential food service requirements to a NAFI.
General Counsel PC Highlight:
Asiel Enterprises, Inc. protested the agency’s decision to acquire essential messing services at the Barksdale and Dyess AFBs from the Air Force Mission Essential Feeding Fund (AFMEFF), an Air Force Supplemental Mission Nonappropriated Fund Instrumentality (NAFI), on a sole-source basis, rather than holding a competition. Under the Food Transformation Initiative (FTI), the agency combined mission-essential food services (food services provided at Air Force dining facilities to airmen) and non-essential food services (restaurants, snack bars, limited menu operations, etc) provided within the Morale, Welfare, and Recreation (MWR) system. Under FTI, appropriated funds are transferred from Air Force installations to the AFMEFF, which provides the installations’ mission-essential services using “pre-qualified” contractors.
In August 2009, under this new initiative, the Air Force Nonappropriated Fund Purchasing Office (AFNAFPO), within the Air Force Services Agency (AFSVA), posted a notice instructing interested sources to respond to a Qualifications Survey, provided past performance information, corporate/operating structure, and financial strength and capabilities. After pre-qualifying, Aramark and Sodexo entered into Nonappropriated Purchasing Agreements (NPAs) with the AFNAFPO. The NPAs specifically envisioned a nonappropriated fund (NAF) contractor approach which combines NAF and appropriated fund resources to provide mission and NAF resale feeding capabilities in NAF food operations.
In November 2010, the AMFEFF and the AFSVA entered into an NAFI MOA to provide appropriated funds in exchange for the operation of mission essential dining services. The MOA incorporated the first portfolio of bases under FTI, which had been awarded to Aramark. The AFSVA then entered into Installation Operating Agreements (IOAs) with a second portfolio of bases, including Barksdale and Dyess. Asiel, who was the incumbent provider of mission essential food services at Barksdale and Dyess, was contacted by Aramark, which stated that it was responding to an RFQ from the AFSVA to provide food services at Barksdale. Asiel contacted contracting officials at both Barksdale and Dyess regarding the RFQ, in addition to filing FOIA requests, but had not received any responses at the time of protest.
The GAO disagreed with the agency’s assertion that it has special authority under 10 U.S.C. § 2492 to obtain the mission essential food services in question from the AFMEFF through a MOA, and that, as a consequence, CICA was inapplicable. The GAO noted that section 2492 limits such agreements to those in support of the MWR system, not mission essential food services. The GAO did not find reasonable the agency’s reading of section 2492 as authorizing the AFMEFF, a NAFI, to provide mission essential services to the Air Force because it is of benefit to the MWR system for the agency to acquire both operation of essential food service facilities and operation of non-essential food service facilities (such as officers’ clubs) from the same contractor. Without authority under section 2492, the Air Force could not have transferred appropriated funds to the NAFI for the provision of mission essential food services without undertaking a competitive procurement process.
Although the GAO will generally not review protests of the award of agreements other than procurement contracts pursuant to its bid protest jurisdiction under CICA, it will consider timely protests that an agency has used a non-procurement instrument, such as the MOA in this protest, where a procurement contract was required. If a company is excluded from the ability to compete for or otherwise receive an award of a non-procurement instrument, they may have grounds to protest to the GAO should they believe that the agency used an improper instrument. The GAO will exercise jurisdiction to ensure that the agency is not attempting to avoid the requirements of procurement statutes and regulations.