Non-Protestable Task Order Procurement Decision Shuts Out Incumbent Contractor

by Sheppard Mullin Richter & Hampton LLP
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A recent decision by the U.S. Court of Federal Claims (“COFC”) serves as a reminder on the limits a contractor faces in protesting task and delivery order awards. In MORI Associates, Inc. v. United States, No. 13-671C (2013), the COFC dismissed the pre-award bid protest by MORI, the incumbent contractor, for lack of jurisdiction because the protest challenged the Government’s decision to obtain services through a task order competition under an Indefinite Delivery/Indefinite Quantity (“IDIQ”) Government-Wide Acquisition Contract (“GWAC”) rather than through a General Services Administration (“GSA”) Schedule contract.

The decision was the latest in a long-running series of disputes between MORI and a National Institutes of Health agency concerning the provision of IT services. MORI was awarded a 5-year contract for help desk support, as well as other IT services, in 2002. A follow-on procurement was attempted by soliciting quotations from firms that held a GSA Federal Supply Schedule (“FSS”) IT Schedule 70 contract, which included MORI. MORI continued to perform help desk services pending a series of protests it brought at the Government Accountability Office (“GAO”) and at the COFC challenging the agency’s attempts to procure the services from other contractors. After two cancellations of the solicitation, the agency elected to procure the services instead by way of a task order competition under the Chief Information Officer-Solutions and Partners 3 (“CIO-SP3”) GWAC, a 10 year IDIQ contract awarded to 54 contractors in May 2012. Most importantly, MORI had competed for but was unsuccessful in obtaining a CIO-SP3 contract and, therefore, could not submit a proposal for the task order solicitation, which the agency issued in August 2013.

MORI, believing the decision to use the CIO-SP3 vehicle to be both arbitrary and made in bad faith, protested the issuance of the task order solicitation at the GAO. The GAO granted the Government’s motion to dismiss the protest on the ground that it was barred by the Federal Acquisition Streamlining Act of 1994 (“FASA”), 41 U.S.C. § 4106(f), which in its current form states in part:

(f) Protests.—

(1) Protest not authorized.— A protest is not authorized in connection with the issuance or proposed issuance of a task or delivery order except for—

(A) a protest on the ground that the order increases the scope, period, or maximum value of the contract under which the order is issued; or

(B) a protest of an order valued in excess of $10,000,000.

(2) Jurisdiction over protests.— Notwithstanding section 3556 of title 31, the Comptroller General shall have exclusive jurisdiction of a protest authorized under paragraph (1)(B).

(3) Effective period.— Paragraph (1)(B) and paragraph (2) of this subsection shall not be in effect after September 30, 2016.

MORI then filed a complaint at the COFC.

The COFC addressed the jurisdictional issue as a question of “whether a protest of the decision to request proposals from holders of a task order contract, instead of using the GSA Schedule 70, should be considered too connected to the proposed issuance of a task order to survive the FASA prohibition.” In essence, could the COFC draw a distinction between the decision to use the task order vehicle and “the proposed issuance of a task order,” which would not be reviewable under the FASA. The COFC held that “it is not even a close question.” Quoting its interpretation in an earlier case, DataMill, Inc. v. United States, 91 Fed. Cl. 740, 756 (2010), the COFC noted that “the phrase ‘in connection with’ means that there is a direct and causal relationship between two things that are mutually dependent,” and “[a]n agency’s underlying decision to procure goods or services without competition through a delivery order has a direct and causal relationship to the ‘issuance’ or ‘proposed issuance’ of the delivery order that agency ultimately utilizes to effectuate the procurement.” Accordingly, the COFC held that when a protest challenges the decision to obtain services by requesting proposals from IDIQ task order contract holders, the FASA prohibition on protests clearly applies. Therefore, the COFC granted the Government’s motion to dismiss the protest.

However, the COFC did note that procurement decisions made both before and after the selection of a task order vehicle could be subject to protest, notwithstanding the FASA prohibition. For example, the choice of particular brand name products has been found to be distinct from the use of a task order solicitation to obtain those products. Savantage Fin. Servs., Inc. v. United States, 81 Fed. Cl. 300, 305, 308 (2008). Procurement decisions made after the issuance of task orders that are not subject to the FASA prohibition include the assignment of new work to an existing task order through a modification, Global Computer Enters., Inc. v. United States, 88 Fed. Cl. 350, 410-15 (2009), or the use of an already-issued task order to obtain products and services through subcontracts, Distributed Solutions, Inc. v. United States, 104 Fed. Cl. 368, 371 n.5, 372, 380, 385 n.24 (2012).

This case is a reminder of the limitations contractors face when protesting solicitations or awards involving a task or delivery order for an IDIQ contract. Unless a protestor’s challenge is distinct from the decision to use the task order vehicle or challenges an increase in the scope, period, or maximum value of the contract, the COFC could lack jurisdiction to decide the protest. If the value of the order is less than $10,000,000, the GAO might also lack jurisdiction under the FASA prohibition, unless one of the other exceptions applies. These limitations combined could leave a disappointed contractor out in the cold.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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