Recent Developments at GAO
 
March 1, 1999
 

Three recent decisions by the General Accounting Office may signal significant changes in GAO's review of bid protests.

GAO Reverses Non-contract "Incidentals" Position

The first case, Pyxis Corporation, B-282469 (July 15, 1999), is a clear reversal of GAO's previous position that federal agencies, when making purchases under an existing contract, may also purchase non-contract "incidentals" without further competition. In a 1997 decision, ViON Corp., B-275063, 97-1 CPD ¶ 53, GAO authorized the purchase of "tag along" items from a contractor as long as they were incidental to a primary purchase under a Federal Supply Schedule (FSS) contract and were not a significant part of the overall purchase price. Subsequent to ViON, however, the Court of Federal Claims decided in ATA Defense Industries, Inc. v. United States, 38 Fed. Cl. 489 (1997), that for purchases outside of FSS listed items, an agency must use competitive procedures, because no exception to the Competition in Contracting Act (CICA) "even arguably applies" to such purchases.

In the Pyxis case, the Army had relied on ViON not only to purchase "incidental" non-Schedule items, but also to receive different prices and terms for items that were on the FSS. On July 15, 1999, GAO ruled that "in light of the analysis of the court in ATA, ... there is no statutory authority for the 'incidentals' test enunciated in ViON." GAO not only overturned ViON with its Pyxis decision, it went out of its way to do so. Even though the protest was untimely, GAO triggered its own bid protest rule that gives GAO discretion to decide untimely issues that nonetheless are "significant to the procurement system..." 4 C.F.R. § 21.2(c).

GAO Defines Protest Authority

In the second case, Makro Janitorial Services, Inc., B-282690 (August 18, 1999), GAO seems to be defining its protest authority in the face of a statutory limitation on protests of task orders. The Federal Acquisition Streamlining Act (FASA) prohibited protests in connection with the issuance of orders under a task order contract or delivery order contract, except for protests that the order increases the scope, period, or maximum value of the contract. FAR 16.505. In Makro, the Army Corps of Engineers issued a task order for "Housekeeping Services" under an indefinite-delivery/indefinite-quantity (IDIQ) contract for "Real Property Inventory, Demand Maintenance Repairs and Surveys of Medical Facilities." Makro protested the housekeeping task order as outside the original scope of the contract.

GAO rejected evidence that the original contract provided for both housekeeping and exterior grounds maintenance in finding the proposed housekeeping services beyond the scope of the contract. GAO instead relied upon background procurement documents and contract definitions and descriptions which were heavily oriented toward functions that addressed the facilities' physical plant, including repair, maintenance and minor construction. GAO concluded that "[t]here is nothing in the original scope of work that even remotely suggests that the contract contemplated the acquisition of housekeeping services as defined by the modification."

While there is evidence in the record to support GAO's decision, the Corps' position that facilities maintenance includes housekeeping did not seem to be unreasonable. If this case signals GAO's intent to protect its remaining bid protest authority over task order contracts, then one can reasonably expect strict scrutiny of task orders when such "scope check" protests are filed. Such strict scrutiny provides opportunities for protesters and a warning to agencies.

Past Performance Evaluations

The third case of note was a garden variety past performance case. In AmClyde Engineered Products Co., Inc., GAO found that the agency's evaluation of AmClyde's proposal and past performance was reasonable and denied the protest. Such denials are fairly common at GAO.

AmClyde alleged that the Navy had down graded its past performance "for making claims." GAO found, in fact, that the Navy, had not cited AmClyde's claims history during its past-performance discussions with AmClyde; and, even if it had, it was not likely that would have affected the outcome of the procurement.

GAO then dropped a footnote on the subject which makes for interesting reading for agencies and protesters alike:

"While the claims apparently had no impact here, we agree with the protester that, absent some evidence of abuse of the process, agencies should not lower a firm's past performance evaluation based solely on its having filed claims. Contract claims, like bid protests, constitute remedies established by statute and regulation, and firms should not be prejudiced in competing for other contracts because of their reasonable pursuit of such remedies in the past."

GAO is not given to making gratuitous comments in its decisions. Federal agencies will be well-advised to keep GAO's words in mind when evaluating the past performance of its potential contractors.