Protest addresses GAO’s jurisdictional threshold on IDIQ orders

December 17, 2020 Jason Bakke 0 Comments

GAO has limited authority to hear protests of orders under IDIQ contracts, granted by the Federal Acquisition Streamlining Act of 1994 that laid the groundwork for the expansion of task-order contracting in government. Per 2017’s National Defense Authorization Act, GAO’s authority over IDIQ-order protests extends only to Defense orders above $25 million (and civilian orders over $10 million, in most cases).

Here, the Defense Logistics Agency awarded a task order off of an IDIQ, J6 Enterprise Technology Services (JETS), to Credence Management Systems for the development and sustainment of an e-commerce system. The award amount was $24,993,820 for the base and “All” option periods. U.S. Information Technologies Corporation protested to GAO.

While a large number, $24,993,820 is less than $25 million. The protester put forth three counterarguments:

(1) the value of the award should include the value of the option to extend services under Federal Acquisition Regulation (FAR) clause 52.217-8
(2) the awardee did not propose to perform the contract in accordance with the terms of the solicitation, and a proper evaluation would have found that its evaluated price should have been higher
(3) the value of the task order should have been higher to account for what the protester believes may have been post-award modifications to the scope of the order

For #2, GAO pointed to Basic Eng’g Concepts & Techs., Inc. (B-409231.4), which requires GAO to assess its ability to assess the threshold question based on the quoted price, lest it “make jurisdiction dependent on the outcome of the substantive merits of the protest.”

For #3, GAO reminds that it has extremely limited authority to review contract modifications and that the protester presented no evidence of the government’s intent to modify the order’s amount above $25 million.

The first item is interesting. Option clause 52.217-8 provides for an optional six-month extension of the contract, often for transition to the government or the follow-on contractor. Per Major Contracting Servs., Inc. (B-401472), unless an agency specifically evaluates the pricing of this six-month option at award, its exercise is a new procurement requiring full and open competition. Here, DLA did not request additional pricing for the six-month option and did not extend the last option year’s pricing to evaluate the 52.217-8 option.

So, DLA did not evaluate the six-month option; it therefore cannot exercise it, but it keeps the award amount below the $25 million threshold, denying GAO jurisdiction. An ugly win for DLA, but a win nonetheless.

Protest addresses GAO’s jurisdictional threshold on IDIQ orders was last modified: December 17th, 2020 by Jason Bakke

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