Link: GAO Opinion
Agency: General Services Administration
Disposition: Protest dismissed
Keywords: Protest Jurisdiction; Task Orders
General Counsel P.C. Highlight: GAO does not have jurisdiction to consider a protest of an ID/IQ task or delivery order except where the protester alleges that the task order is beyond the scope, period, or maximum value of the ID/IQ contract under which the order is issued or where the order is valued in excess of $10,000,000.
U.S. Bank (USB) protests the issuance of a task order by the General Services Administration (GSA) under a request for quotes (RFQ) for third party payment services.
GAO does not have jurisdiction to consider a protest of an ID/IQ task or delivery order except where the protester alleges that the task order is beyond the scope, period, or maximum value of the ID/IQ contract under which the order is issued or where the order is valued in excess of $10,000,000. USB’s protest does not argue that the scope, period, or maximum value of the contract was increased, but does argue that the value of the task order exceeds $10 million.
The RFQ sought quotes to provide third-party payment services (3PPS) to facilitate transactions for GSA’s transportation management services solution (TMSS) under a task order. The competition was limited to vendors holding GSA Smart Pay 2 ID/IQ contracts.
The TMSS is a system that provides freight shipping for federal agencies through contractors known as transportation service providers (TSP). The 3PPS is intended to enable federal agencies to quickly and efficiently pay bills, to permit GSA to better track the transportation services, and to ensure that GSA receives the industrial funding fee (IFF) amounts it is entitled to collect for the transactions. As relevant here, the 3PPS vendor receives funds from the customer agencies and pays the TSP for the shipping work. Use of the 3PPS for payment of shipping transactions will not be mandatory for non-GSA user agencies or TSPs. Amendment No. 1 to the RFP contained a spreadsheet, which indicated the estimated volume of freight and household goods shipments for fiscal year 2009 totaled $174 million. The RFQ anticipated the issuance of a task order with a one-year base period with eight one-year options. The 3PPS task order was to be awarded on a no-cost basis. The successful vendor would be permitted to charge transaction fees to the TSPs who participate in the payment functions of the 3PPS. These fees are the only funds that will be earned by the 3PPS vendor in the performance of the task order.
GSA issued the task order to another offeror and USB filed a protest with GAO, arguing that the award was flawed because the agency unreasonably evaluated the vendors’ costs and technical approaches. GSA requested that GAO dismiss the protest, arguing that GAO did not have jurisdiction because the value of the order was less than $10 million. GAO advised the parties that it would not dismiss the protest because GAO viewed the amount of fees to be earned by the 3PPS vendor to be the “value” of the task order, and USB had provided evidence that, based on $174 million figure stated in Amendment No. 1 to the RFQ, the total fees would likely be greater than $10 million. GSA advised GAO that it would take corrective action by canceling the order issued and issuing a revised solicitation that better reflected the agency’s understanding of the transaction volumes anticipated by the agency for the duration of the task order. GSA then issued Amendment No. 2 to the RFQ, which stated the agency’s estimate of the volume of transactions anticipated to be processed during performance of the 3PPS task order and which permitted vendors to submit revised quotes. GSA again awarded the task order to another offeror and USB protested.
Again GSA argues that GAO does not have jurisdiction to hear the protester because this task order is valued at less than $10 million. Here, USB and GSA agree that that the value of the task order is the total of the anticipated fees that the vendor will charge the TSPs over the term of the contract, including options. GAO agrees. The protester and agency disagree, however, as to the total fees that the vendor will earn over the course of contract performance, and whether those fees will be more or less than $10 million.
Amendment No. 1 to the RFQ indicated that the cost of shipping freight and household goods through GSA’s transportation program in fiscal year 2009 was $174 million. Amendment No. 2 to the RFQ stated that the $174 million figure should not be viewed as a likely amount for the task order because that figure included $24 million in shipments by the Department of State, which subsequently established a separate agreement for payment of processing services and would not be using the 3PPS system. In Amendment No. 2, however, the agency further advised that the 2009 transaction volume did not reflect the agency’s estimates for transactions under the new 3PPS system. Specifically, the agency stated that it anticipated “adoption [of the 3PPS system] by customer agencies to be slow during the base and first option periods, as the awardee markets the 3PPS alternative to customer agencies.” In this regard, as discussed above, use of the 3PPS for purposes of payment is not mandatory for non-GSA customers and TSPs who provide services to non-GSA agencies; TSPs who do not agree to use the 3PPS for payment by agencies will not be required to pay fees to the 3PPS vendor. For those reasons, the agency provided the following estimates in the revised RFQ:
GSA estimates that the dollar volume for 3PPS in the first year will be $5,000,000. This amount may be slightly higher depending on when 3PPS actually becomes operational. The dollar value for 3PPS estimated for the first option period is approximately $20,000,000. GSA has estimated that customer agency adoption of 3PPS, beginning in the second option period, will grow in increments of approximately 33% per year.
Based on this information, the total volume of transactions anticipated by GSA for the nine-year task order would be $537,770,000 and applying the awardee’s transaction fee of 1.01% to this amount yields a task order value of $5,431,465. Based on the estimates set forth in the solicitation, GAO concludes that the value of the task order here is less than $10 million and that it lacks jurisdiction to hear the protest. The protest is dismissed.