Link: GAO Opinion
Agency: Department of Housing and Urban Development
Disposition: Protest denied.
Keywords: Prejudice; corrective action; sole-source
General Counsel P.C. Highlight: GAO will not consider an argument regarding compliance with a corrective action letter, except to the extent the protester asserts that an agency’s alleged deviation from its proposed corrective action resulted in a prejudicial violation of procurement laws or regulations.
Eagle Collaborative Computing Services, Inc. (ECCS), a small business, protests the award of a sole-source contract by the Department of Housing and Urban Development (HUD) for Rehabilitation Act support and training services under the Small Business Administration’s (SBA) section 8(a) program.
HUD made an initial award under the RFP and ECCS protested the award. HUD agreed to take voluntary corrective action to re-evaluate the proposals and GAO dismissed the initial protest. HUD again made award to the same offeror and ECCs again protested the award. HUD stated again that it would take corrective action and GAO dismissed the protest. HUD offered to get the General Services Administration (GSA) involved as a GSA-assisted acquisition.
After several attempts to complete the procurement, HUD decided to address its immediate need for services under section 508 of the Rehabilitation Act through a limited sole-source award while it worked to reorganize and re-award the entire procurement. HUD submitted a proposal to the SBA for making the limited sole-source award and the SBA did not reply, which after 3 days indicates SBA’s consent to the award. HUD then awarded the limited sole source award in the amount of $74, 048. ECCS learned of the award and filed its current protest.
ECCS first argues that HUD’s award does not comply with the voluntary corrective action that HUD agreed to take following the second award because they did not utilize the GSA in making an award. ECCS failed to allege how this lack of GSA’s participation actually prejudiced it chance for award. GAO will not consider an argument regarding compliance with a corrective action letter, except to the extent the protester asserts that an agency’s alleged deviation from its proposed corrective action resulted in a prejudicial violation of procurement laws or regulations. The allegation here, that HUD violated the corrective action letter by failing to award a contract through GSA, does not show a violation of procurement laws or regulations or any prejudice to ECCS.
ECCS also argues that HUD’s third award was not properly issued as a sole-source section 8(a) award under the FAR. The FAR expressly requires the use of competitive procedures in making 8(a) awards under the following circumstances: (1) when there is a reasonable expectation that at least two eligible and responsible 8(a) firms will submit offers and that an award can be made at fair market price, and (2) the anticipated total value of the contract, including options, will exceed $4 million. In addition, the 8(a) regulations provide that when the value of a proposed contract falls below the simplified acquisition threshold ($100,000), an agency that has sent an offer letter for the contract to the SBA “may assume the offer is accepted and proceed with award” of the contract if the agency “does not receive a reply [from the SBA] within two days” of sending the offer letter. Since HUD’s award was for $75, 048-well below the $4 million competitive threshold and below the simplified acquisition threshold-HUD was not required to use competitive procedures here. The protest is denied.