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Between a (CDA) Rock and a (FASA) Hard Place: Court of Federal Claims Decision Highlights Difficulties in Challenging Government Actions Related to Task Orders

November 29, 2018

In a recent decision, the U.S. Court of Federal Claims (COFC) dismissed a bid protest for lack of jurisdiction. The protester's allegation, that the agency had made a bad faith decision to exclude the protester from competition, highlights the difficult position the Contract Disputes Act (CDA) and the Federal Acquisition Streamlining Act of 1994 (FASA) put contractors in when they believe the government has engaged in serious wrongdoing related to a task order procurement. COFC's decision is worth consideration for any contractor similarly caught between filing a claim and a bid protest.

In OST, Inc. v. United States, OST filed a bid protest challenging the Defense Health Agency's (DHA) decision to issue a task order under the U.S. General Services Administration's (GSA) Alliant Government Wide Acquisition Contract (GWAC) for IT services previously provided by OST through another contract vehicle, the Chief Information Officer-Solutions and Partners 3 (CIO-SP3) GWAC. See OST, Inc. v. United States, No. 18-670C (Fed. Cl. Nov. 20, 2018). OST argued that DHA had decided not to exercise an option under OST's CIO-SP3 contract in bad faith, and instead chose to use the Alliant GWAC to exclude OST from competing (OST is not an Alliant GWAC holder). DHA argued that it had decided to procure the IT services under the Alliant GWAC instead of the CIO-SP3 GWAC because of an internal policy stating that "if a service can be acquired by using GSA's Alliant GWAC or Alliant Small Business GWAC, then those vehicles shall be used to procure the service."

DHA argued, and COFC agreed, that the court lacked jurisdiction over OST's case for two reasons. First, to the extent that OST was trying to challenge DHA's decision not to exercise an option under OST's CIO-SP3 GWAC, such challenges must go through the CDA process under 41 U.S.C. §§ 7101-7109. OST never submitted a certified claim to the contracting officer related to this decision, and so COFC did not have jurisdiction to consider the challenge. Second, FASA prohibits COFC from hearing bid protests "in connection with the issuance or proposed issuance of a task or delivery order" with two exceptions: (1) "a protest on the ground that the order increases the scope, period, or maximum value of the contract under which the order is issued," and (2) a protest of an order valued in excess of $10,000,000 for civilian agencies or $25,000,000 for defense agencies. See 41 U.S.C. § 4106(f); 10 U.S.C. § 2304c(e). Neither one of the exceptions applied to OST. As a result, COFC would not have jurisdiction if OST's protest was "in connection with the issuance or proposed issuance of a" task order.

Ultimately, COFC concluded that OST's bid protest was made in connection with the issuance or proposed issuance of a task order, and so had to be dismissed for lack of jurisdiction under FASA. Even though OST argued that it was not protesting the issuance of a task order under the Alliant GWAC, but rather was challenging "DHA's allegedly 'bad faith' decision to find a contract vehicle designed to keep OST from competing," the court disagreed. COFC found that the record before it established that "DHA made a decision not to exercise the option on OST's contract and to find another contract vehicle" due to its internal policy, and that DHS did not make "another decision to keep OST out of any future competition."

The CDA and FASA place contractors who, like OST, believe the government has improperly decided to switch contract vehicles to use a task order, in a difficult position. OST could have filed a CDA claim against DHA alleging bad faith and seeking compensation, but that would have been unlikely to affect DHA's decision to use the Alliant GWAC instead of the CIO-SP3 GWAC. See DekaTron Corp. v. United States, 128 Fed. Cl. 115, 118 (2016) (noting that "'[a] contractor can recover for the government's failure to exercise an option if the government's failure was in bad faith,'" (quoting Bannum, Inc. v. United States, 80 Fed. Cl. 239, 249 (2008)). Unlike a bid protest, such a CDA claim would not have resulted in a stay of DHA's task order procurement while the claim was litigated. As a result, DHA likely would have awarded a new task order under the Alliant GWAC, and performance may have even been completed, before OST's claim was resolved.

Moreover, unless the task order value exceeds the applicable threshold, neither the U.S. Government Accountability Office (GAO) nor COFC will take jurisdiction over a bid protest in connection with the issuance or proposed issuance of a task order. (Above those threshold amounts, the GAO has exclusive bid protest jurisdiction.) As shown by the decision in OST, Inc. v. United States and the case law upon which it relies, COFC has recently interpreted the FASA bar broadly to include challenging an agency's "decision to obtain services by requesting proposals from indefinite delivery/indefinite quantity task order contract holders." Mori Assocs., Inc. v. United States, 113 Fed. Cl. 33, 38 (2013) (citing Mission Essential Pers., LLC v. United States, 104 Fed. Cl. 170, 179 (2012)).

Because the jurisdictional issues surrounding bid protests of task orders are complicated, and the line between a CDA claim and a bid protest can sometimes be murky, contractors should consult with counsel about the best way to challenge government actions related to task orders.