Link: GAO Decision
Protestor: The Argos Group, LLC
Agency: General Services Administration; Small Business Administration
Disposition: Request for Reconsideration Denied.
Request for reconsideration is denied where requesting agency fails to show either that our prior decision contains errors of fact or law, or present information not previously considered, that would warrant reversal or modification of the prior decision.
General Counsel PC Highlight:
GSA requested that the GAO reconsider its decision sustaining the protest of the Argos Group, in which the GAO found that the agency had improperly failed to include the 10% price evaluation preference for HUBZone offerors in a solicitation issued on a full and open competitive basis to acquire leased space for the FBI in the vicinity of Hudson Valley, New York. GSA argued that the decision impermissibly expands the application of the price evaluation preference to leasehold acquisitions. The GAO had held that the 10% price evaluation preference was broadly applicable to all acquisitions conducted pursuant to full and open competitive procedures, and was not limited by the terms of the HUBZone Act to the type of contract being awarded.
The GAO concluded that GSA’s request did not meet the standard for reconsideration, in that it did not show either that the decision contained errors of fact or law, or present information not previously considered. GSA first argued that its interpretation should be afforded Chevron deference because the HUBZone price evaluation preference statute is ambiguous with respect to its applicability to leasehold acquisitions. The GAO disagreed, pointing out that Chevron deference is only afforded to the agency that is charged with administering the statute in question. The SBA, not GSA, is responsible for administering the HUBZone program, and the SBA took the position that the HUBZone price evaluation preference applied to leasehold acquisitions.
The GAO also agreed with the SBA’s stance that the statute does not limit application of the preference to procurements for supplies, services, and construction. It found that the statute imposes a requirement on the SBA to promulgate performance standards for HUBZone small businesses where the industry category is not covered by the performance standards specifically included in the statute itself. Although the SBA has not yet promulgated performance standards defining “qualified” HUBZone concerns for the real property leasing industry, this does not mean that the HUBZone price evaluation preference is not applicable. The GAO disagreed with GSA’s assertion that requiring application of the HUBZone price evaluation preference impairs GSA’s exclusive authority to enter into leasehold acquisitions that are “in the interest of the Federal Government.” Finally, the GAO rejected GSA’s concerns argument that businesses could sell the real estate after obtaining a GSA lease to a non-HUBZone company, pointing out that this fact does not demonstrate that the price evaluation preference is inapplicable to leasehold acquisitions.
Although the GAO only makes recommendations, and cannot order an agency to comply with its decision, in the vast majority of cases, the agency complies with the GAO’s recommendations. Although there is an ongoing string of cases in which the VA is refusing to follow the GAO’s recommendations, in this case GSA chose to request that the GAO reconsider its decision, rather than simply ignoring it. Any protestor, intervenor, or agency that is dissatisfied with a protest decision may request that GAO reconsider their decision no later than ten days after the basis for reconsideration is known.