United States: GAO Sharpening Its Blade [Strategies] On OTA Review

Last Updated: October 5 2018
Article by Locke Bell and Victoria Dalcourt

The Government Accountability Office's (GAO) recent decision in Blade Strategies, LLC, B-416752, 2018 WL 4584111 (Comp. Gen. Sept. 24, 2018), clarifies the GAO's jurisdiction and standard of review for protests of other transaction agreements (OTAs), and also serves as a good reminder that all protests challenging an aspect of an agency's solicitation — including the agency's choice of an OTA over a procurement contract — must be filed prior to the time for receipt of initial proposals.

Generally, the GAO's bid protest jurisdiction does not extend to the review of awards made under an agency's "other transaction" authority; however, the GAO will review a timely protest that an agency is improperly using an OTA rather than a procurement contract. See 4 C.F.R. § 21.5(m). As we have discussed on this blog, the GAO's standard of review for this question seemingly has evolved over time. Traditionally, the GAO would evaluate whether an agency was attempting to "acquire (by purchase, lease, or barter) property or services for the direct benefit or use of the United States Government," in which case a procurement contract would be required in accordance with the Federal Grants and Cooperative Agreements Act (FGCAA). See Rocketplane Kistler, B-310741, Jan. 28, 2008, 2008 CPD P 22. This was necessary "to ensure that an agency [was] not attempting to avoid the requirements of procurement statutes and regulations" by exploiting its other transaction authority. Id. However, in two recent decisions, MorphoTrust and Oracle, the GAO disregarded whether the OTA was designed to purchase goods or services for the Government's direct benefit or use, and instead looked only to "whether the agency's use of its discretionary authority was proper, i.e., knowing and authorized." Oracle America, Inc., B-416061, May 31, 2018, 2018 CPD P 180; MorphoTrust USA, LLC, B-412711, May 16, 2016, 2016 CPD P 133 (holding that "although the FGCAA provides applicable guidance to all federal agencies when the choices are limited to (1) procurement contracts, (2) grants, or (3) cooperative agreements, it provides no guidance when determining when an agency may properly use its other transaction authority").

The difference between these standards is stark: one prevents an agency from issuing an OTA where it should issue a procurement contract instead, while the other simply looks to whether Congress has bestowed an agency with sufficiently broad other transaction authority. The latter is necessary in at least one instance, namely the Department of Defense's (DOD) express authority to enter into OTAs for prototype projects, which undoubtedly are acquisition instruments for the purchase of goods (i.e., prototypes) or services (i.e., prototyping) that the DOD uses for its direct benefit and use. But the latter standard yields much too lenient a result when applied to other agencies, such as NASA, that have been authorized broadly to enter into "enter into and perform such contracts, leases, cooperative agreements, or other transactionsas may be necessary in the conduct of its work and on such terms as it may deem appropriate." 51 U.S.C. § 20113(e) (emphases added). Under the MorphoTrust and Oracle standard, at least on its face, NASA and similarly authorized agencies appear to be able to issue OTAs — and avoid procurement law — when buying nearly anything.

Yet it is possible to rectify this apparent split and the concern it raises by returning to the FGCAA. That is, when examining whether an agency's use of its other transaction authority was "proper," the GAO should consider not only the agency's specific "other transaction" authority, but all applicable statutes, including the FGCAA. For DoD alone, Congress has expressly and specifically authorized it to acquire certain goods and services through OTAs, and even set unique statutory bounds on the structure of these OTAs, defined the parties that may enter into them, and mandated competitive procedures for awarding them. See 10 U.S.C. § 2371b. By operation of longstanding rules of statutory construction, this specific, subsequent authorization supersedes the more general direction in the FGCAA to the extent of the conflict between the two.

Thus, with the exception of MorphoTrust (which involved an OTA competition held by the Transportation Security Administration), the GAO's precedents can be reconciled with existing law — and produce a reasonable and workable result reflecting Congress' intent — if the focus of the GAO's analysis is not only whether the use is "knowing and authorized," but whether it is "proper," i.e., not a violation of statute or regulation. And although it was immaterial to the outcome of the protest, that seems to be the direction in which the GAO is heading (or at least looking) in Blade Strategies, where the Office recites its standard of review simply as whether "an agency is improperly using its other transaction authority to procure goods or services." Or perhaps that's just us building castles in the air.

The more concrete takeaway from Blade Strategies is its rule on timeliness. Specifically: "Where a protester is aware that the agency has issued a competitive solicitation seeking to enter into an OTA pursuant to its statutory authority, any protest regarding the use of that authority must be filed prior to the time for receipt of initial proposals." The GAO found Blade Strategies failed to satisfy this rule, as Blade Strategies was aware not only that the Department of the Army had issued the protested solicitation, but that the solicitation expressly called for the award of an OTA, yet Blade Strategies nevertheless waited to challenge the agency's use of an OTA until after the award decision was announced. To allow a disappointed bidder to protest the use of an OTA after award would, like in analogous scenarios with procurement contracts, frustrate the GAO's charge of "resolving protests expeditiously without unduly disrupting or delaying the procurement process." Therefore, the GAO dismissed Blade Strategies' protest as untimely.

Whether simply exploring the exploding number of OTA opportunities available to all types of contractors, or concerned by an agency's move to OTAs for work historically performed under traditional procurement contracts, companies must remember that any challenges to the agency's actions must be brought early on. And remember: even though the GAO will not consider protests challenging the award of an OTA, one still may be able to bring a protest in court. But that is a topic for another day.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Locke Bell
Victoria Dalcourt
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions