Under 10 U.S.C. 2304c(e)(1), the GAO has jurisdiction to hear protests of task orders issued under multiple-award contracts where the task order is “valued in excess of $10,000,000.”  Last week, GAO issued a decision that clarifies what determines the “value” of a task order for purposes of this limitation on GAO’s jurisdiction.

In Goldbelt Glacier Health Services, LLC, B-410378, B-410378.2 (Sept. 25, 2014), GAO dismissed for lack of jurisdiction Glacier’s protest of the Army National Guard’s award of a task order for psychological health services to another bidder for a price of $9.6 million.  Glacier had argued that the $10 million jurisdictional threshold was satisfied because, had the agency conducted a proper evaluation, it would have awarded the order to Glacier for its proposed price of $11.4 million.  Glacier contended that the work to be performed under the task order could not be performed for less than $10 million.

GAO refused Glacier’s invitation to consider the “true” or “underlying” value of the work to be performed.  Instead, it adopted a bright-line rule:  where the government has issued a task order, the jurisdictional limit “turn[s] on the value of the disputed order, which is reflected in the terms of the order itself since the order defines the scope and terms of the contractual commitment between the selected contractor and the government.”

Impact for Contractors:  GAO’s holding has implications for contractors bidding on task orders near the $10 million jurisdictional threshold.  In particular, it clarifies that GAO’s jurisdiction to hear a protest over a task order will be determined by the winning bidder’s price alone.  Contractors competing for task orders in that value range should be aware that their protest rights might be impaired, in that a competitor’s bid of slightly less than $10 million will likely render the award immune from protest at the GAO.  It is conceivable that agencies might take this consideration into account in best-value tradeoff evaluations, although it is not at all clear that such consideration would be appropriate (and might itself be subject to challenge).

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Photo of Jennifer Plitsch Jennifer Plitsch

Jennifer Plitsch is co-chair of the firm’s Government Contracts practice group. Her practice includes a wide range of contracting issues for large and small businesses in both defense and civilian contracting. Her practice involves advising clients on contract proposal, performance, and compliance questions…

Jennifer Plitsch is co-chair of the firm’s Government Contracts practice group. Her practice includes a wide range of contracting issues for large and small businesses in both defense and civilian contracting. Her practice involves advising clients on contract proposal, performance, and compliance questions as well as transactional and legislative issues. Her practice also includes bid protest and contract claims and appeals litigation before GAO, agency boards and the federal courts. Ms. Plitsch has particular expertise in advising clients in the pharmaceutical and biologics industry. She advises a range of pharmaceutical and biologics manufacturers on Federal Supply Schedule contracts, including the complex pricing requirements imposed on products under the Veterans Health Care Act, as well as research and development contracts and grants with various federal agencies. She also has significant experience advising on the requirements of various programs under which vaccine products and biodefense medical countermeasures are procured by the Government.