While not as enthralling as the Watergate story fictionalized in All the President’s Men, there is something intuitive about following the money in federal contracting. Federal dollars fund contracts for federal administrative agencies, State entities, and non-profit organizations. It would stand to reason that federal funding would determine whether a procurement would be subject to federal protest procedures. This is an instance where reason and federal contracting don’t go hand-in-hand.
The Government Accountability Office (“GAO”) is a popular destination for bid protests. GAO plays an important role in maintaining the integrity of the federal contracting system by reviewing the decision making of federal agencies issuing awards. It’s not perfect, but its existence does lend credibility to the federal procurement process and filters out some of the most egregious issues.
GAO’s ability to hear protests arises from the the Competition in Contracting Act (“CICA”). As defined within CICA, a protest must challenge a solicitation or award by a federal agency. CICA adopts the definition of “federal agency” used within the Federal Property and Administrative Services Act, which is “an executive agency or an establishment in the legislative or judicial branch of the Government (except the Senate, the House of Representatives, and the Architect of the Capitol, and any activities under the direction of the Architect of the Capitol).” Thus, to qualify for GAO’s bid protest jurisdiction, the procurement at issue must be conducted by a federal executive agency or an establishment of the legislative or judicial branches.
The federal government, however, funds many projects through grants and cooperative agreements. Department of Transportation projects, for example, are frequently administrated by state agencies using federal dollars. Cooperative agreements also exist between executive agencies and non-profit organizations to provide services on behalf of the agency. In short, there are many contract opportunities supported by federal funds that are not administered by federal agencies.
The issue of federal funding for non-agencies recently arose in the GAO bid protest of Acclaim Systems, Inc., B-421379 et al., __ CPD ¶ __ (Feb. 10, 2023). The Association of Food and Drug Officials (“AFDO”) is a national nonprofit organization representing state, territorial, and local food regulation agencies. It issued a competitive solicitation for IT services developing a national platform for agriculture and public health. Funding for the project was provided through a cooperative agreement between AFDO, and the Department of Health and Human Services, Food and Drug Administration (“FDA”).
Acclaim Systems submitted a proposal in response, but it was not selected for the award. It protested the award to GAO. The protest was dismissed without consideration. According to GAO:
While FDA executed a cooperative agreement with AFDO that provides funding for the procurement, nothing in the record demonstrates FDA involvement in the procurement other than providing funding via the cooperative agreement. Accordingly, since the procuring entity here is not a federal agency, we are without jurisdiction to consider the protest.
Since the procurement was conducted by AFDO, which is not a federal administrative agency, GAO lacked jurisdiction to consider the protest allegations.
In short, GAO’s bid protest jurisdiction is limited. The critical question is decision-making authority. If an organization other than a federal executive agency or legislative establishment is making the award decision, GAO will not get involved to review the conduct.
This is one instance where Deep Throat’s advice rings hollow. When it comes to GAO, don’t follow the money; follow the authority.
If you’re interested in more blogs about jurisdictional topics, check out this post where GAO evaluated whether Executive Office of the President was an executive agency under CICA.