Type: Law Bulletins
Date: 07/08/2019

GAO Lacks Jurisdiction in an IDIQ Task Order Option Period Protest Where the Solicitation Did Not Evaluate That Option Period

In Adams and Associates, Inc. B-417534, June 4, 2019, the Government Accountability Office (GAO) dismissed the protest due to lack of jurisdiction. The protest was dismissed because the task order dollar value, not including the option period, was below the $10 million threshold for the GAO to have jurisdiction. In general, the Federal Acquisition Regulation (FAR) requires agencies to evaluate the total costs, meaning base years and options years. So, if the base and option period in Adams and Associates was in excess of $10 million, then why was this option period omitted from the calculation determining whether the GAO had jurisdiction to hear the protest?

Adams and Associates had been the incumbent contractor providing job center operation services to the Department of Labor (DOL). The DOL decided to issue a task order request for quotations (TORFQ), under the existing multiple-award, indefinite-delivery-indefinite-quantity (IDIQ), for a six-month contingency task order to provide interim job center operation services. The underlying IDIQ contained a provision that incumbent contractors were ineligible for contingency task order awards. Accordingly, the DOL excluded Adams and Associates from the competition. Adams and Associates challenged its exclusion from the competition by filing a protest, B-417534, at the GAO.

The DOL countered, among other things, that because this task order was valued under $10 million the GAO did not have jurisdiction. The DOL relied on 41 USC §4106(f) which explicitly allows for protests only if the task order goes beyond the scope, period or maximum value of the underlying IDIQ or when the task order itself exceeds $10 million. Here, the successful offeror’s quotation was under $10 million.1

Adams and Associates unsuccessfully argued that the DOL erred by omitting the option period pricing in determining whether the GAO had jurisdiction. Here, the base and option period pricing, combined, was well over the $10 million threshold.

The GAO was not convinced. While the IDIQ did contain the FAR 52.217-8: Option to Extend Services, and that clause did give the government discretion to require a contractor to continue performance for up to an additional six months at the same rates as the award, the actual TORFQ itself did not reference evaluating or relying on the pricing for the option periods. 

It is well established that the government is required to follow the evaluation criteria set out in the solicitation. Had the DOL announced in the TORFQ that it intended to evaluate the option period, then it would have been required to add the option and base pricing together. But, the TORFQ did not do so.

In dismissing the protest, the GAO concluded that, when “a solicitation did not provide for the pricing or evaluation of a FAR clause 52.217-8 option, it should not be included in the value of the task order.” Accordingly, only the value of the base period should be used to calculate the jurisdiction threshold. Here, the base period alone was under $10 million which is below the threshold for the GAO to have jurisdiction to hear a protest.

For contractors who compete for task or delivery orders, remember option pricing only gets included in the price being evaluated when the task/delivery order solicitation says that an option and its pricing will be considered. And, this will impact whether the GAO has jurisdiction to hear a protest.

A final twist, for the DOL, was the GAO’s comment about the impact of FAR §17.207(f) on an agency’s ability to exercise the six-month option when its pricing had not been evaluated. Specifically, FAR §17.207(f) requires that the option (including pricing) must have been evaluated as part of the initial competition. If option pricing is not evaluated, the GAO reasoned, this FAR provision effectively prevents the agency from exercising any option periods. Instead, it must conduct a new procurement.

So, while Adams and Associates is ineligible to compete for this six-month task order (because it was the incumbent), it is not the incumbent for the current six-month contract for job center operation services. This means Adams and Associates should be eligible to compete under the next TORFQ for the job center operation services just a few months from now.

1NOTE: In order to protest an award at the Department of Defense, NASA or the Coast Guard, the order value must be in excess of $25 million per FAR 16.505(a)(10).

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