Agency: National Endowment for the Humanities
Disposition: Protest Dismissed
Decided: March 13, 2020
Keywords: GAO Jurisdiction
General Counsel P.C. Highlight:
GAO’s bid protest jurisdiction is limited to acquisitions of property or services for the direct benefit or use of the United States Government.
Summary of Facts
R.B. Toth Associates, LLC protests the National Endowment for the Humanities’ (NEH) award of a grant to the University of Rochester for the development of a low-cost spectral imaging system and accompanying software. NEH proposed to award a grant in the amount of $350,000 to the University of Rochester to fund continued development of a prototype system. The university’s grant application indicated that the grant would result in the construction of a more robust spectral imaging prototype systems and a set of instructions for building and operating the system at a lower cost than current commercially available systems. The application also indicated that all specifications, instructions, and software source code would be published so those interested could construct and operate their own versions of the resulting systems. Additionally, the application stated that the university would retain the resulting prototype systems, rather than giving them to NEH.
Basis of Protest
Toth argued that the grant should have been issued as a procurement contract because it will result in the direct acquisition of goods (the prototype systems to be developed) and services (research and development) for the federal government’s use. Toth also argued that the government failed to make any provision for the government’s receipt and subsequent public use of the prototype system. NEH argued that it was not acquiring a low-cost spectral imaging system to carry out its statutory responsibilities, and, therefore, this transaction is appropriately characterized as a grant and thus, outside of GAO bid protest jurisdiction.
Under the Competition in Contracting Act and the Bid Protest Regulations, GAO only reviews protests concerning alleged violations of procurements for the acquisition of goods and services. GAO will not review protests of the issuance of grants or other non-procurement instruments unless the protest alleges that the agency is improperly using a non-procurement instrument. If an agency’s principal purpose is to acquire property or services for the United States Government, it is required to use procurement contracts.
GAO pointed out that, here, the grant application explicitly stated that the prototype systems would be retained by the grantee or other participating universities, not delivered to NEH. Additionally, the grant application included a dissemination plan outlining how the specifications, instructions, and source code for the resulting system will be made publicly available, and includes no discussion of any intangible deliverables to the agency. Therefore, since no goods or services would be provided for the direct benefit or use of the Government, GAO concluded the agreement is not a procurement contract and the review of the propriety of grant awards is beyond its jurisdiction.
GAO dismissed the protest on this basis.