General Accountability Office

Lynn Patton Thompson recently secured 2 wins for client W.B. Construction and Sons, Inc. before the General Accountability Office (GAO) in Washington, DC. The protests involved separate procurements and different issues, and Ms. Thompson prevailed on both.

On December 16, 2011, the GAO issued its public decision sustaining W.B. Construction’s protest of an award made by the Department of the Army for various construction and maintenance services at Fort Polk, Louisiana. The procurement was advertised as an 8(a) set-aside. When the Army announced award to an entity that was not certified as an 8(a) concern, W.B. Construction protested. You can read the full decision here.

On January 4, 2012, the GAO issued its public decision sustaining W.B. Construction’s protest of an award to Tanner Heavy Equipment, LLC by the Army’s Corps of Engineers. Award was to be made on the basis of the lowest, technically-acceptable bid. W.B. Construction submitted the lowest bid and was deemed technically acceptable. However, the Army refused award to W.B. Construction because its bid had omitted a price for one line item and was alleged to be unbalanced. GAO sustained W.B. Construction’s protest. As demonstrated by Ms. Thompson, omission of the price for one line item did not render W.B. Construction’s bid non-responsive, and the Army did not comply with applicable regulation in determining that W.B. Construction’s bid was unbalanced. You can read the full decision here.

In Mission Critical Solutions v. United States, COFC No. 09-864 C (March 2, 2010), the Court of Federal Claims has determined that the HUBZone program takes priority over the 8(a) program.

Mission Critical Solutions ("MCS") was certified as both an 8(a) and HUBZone small business. In 2008, the Department of the Army awarded MCS a one-year sole-source 8(a) contract for just under $3.5 million to provide information technology ("IT") services. For the follow-on requirement, which was valued (including options) at approximately $10.5 million (in excess of the applicable $3.5 million ceiling on sole-source contracts), the Army determined it could not make award to MCS. However, the Army decided it could make a sole-source 8(a) award to Copper River Information Technology, LLC ("Copper River"), an Alaska Native Corporation, if the SBA would approve Copper River as the IT provider for the requirement. SBA accepted the requirement on behalf of Copper River under its 8(a) program and the Army made the award.

MCS protested the sole-source 8(a) award to Copper River to the GAO. MCS argued that the Army was required to compete the requirement as a HUBZone business set-aside. The GAO sustained MCS’s protest. However, the Office of Management and Budget ordered that executive agencies disregard the GAO’s ruling until the Office of Legal Counsel of the United States Justice Department ("OLC") reviewed the matter. After the OLC declared its disagreement with GAO, the Army took the position that it had no authority to take any action inconsistent with the OLC’s position. Thus, MCS’s request for protest costs and a second protest against the award were denied by GAO as "academic", because the Army had stated its position that GAO recommendations could not be followed in the matter. MCS took its protest to the Court of Federal Claims.

Chief Judge Emily Hewitt sided with MCS and declared the Army’s award to Copper River under the 8(a) program not in accordance with law. The Army’s argument that there is parity between the 8(a) and HUBZone requirements was rejected. Judge Hewitt found that the HUBZone statute mandates set-asides for competition among HUBZone concerns whenever there is a reasonable expectation that at least 2 qualified HUBZone firms will submit offers and award can be made at a reasonable price. The plain language of the HUBZone statute at 15 USC § 657a(b)(2) requires such set-asides "[n]otwithstanding any other provision of law". Moreover, whereas contracting officers "may" decide to award contracts under the 8(a) program when the HUBZone statutory set-aside criteria are not met, there is no such discretion for contracting officers when the HUBZone statutory are met. Judge Hewitt enjoined the Army from awarding the IT support services contract without first determining whether the "rule of two" is met "such that the contract opportunity at issue in this case must be awarded on the basis of competition among qualified HUBZone small business concerns."

The General Accountability Office ("GAO") considers protest against the solicitation and award of Federal contracts. Generally, under its "bid protest" function, it handles protests which contest the competitive nature of the terms of a solicitation and its compliance with procurement law and regulation and it handles protests against the propriety of the award of contracts.

Many contractors choose the GAO, as opposed to the Court of Federal Claims, because the laws and regulations permitting the right to protest Federal procurements to the GAO require the stay against a protested procurement action, provided the protest is timely filed. No other forum allows for this "automatic stay". Also, it is one of the least expensive and quickest fora for obtaining a decision. Decisions are generally issued within 120 days from the date of protest.

2008 was one of GAO’s busiest protest years. Over 1600 cases were filed, and the GAO closed over 1500 of them. Although the number of actions filed at the GAO was up 17% from the previous fiscal year, the percentage of sustained actions (actions in favor of the protester) fell from 29% to 21%.

The GAO was originally called the General Accounting Office. Although "Accounting" was changed to "Accountability" in 2004, it’s purpose remains the same: "investigate, at the seat of government or elsewhere, all matters relating to the receipt, disbursement, and application of public funds, and shall make to the President…and to Congress…reports (and) recommendations looking to greater economy or efficiency in public expenditures". It is an investigative arm of Congress.