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GAO Has No Jurisdiction Over Subcontractor’s Protest

by | Jul 16, 2020 | Government Contracts

You would think that the Government Accountability Office (GAO) would consider a protest claiming that the agency is not enforcing the Buy American Act (BAA). But, as shown in a recent GAO decision in Craft Bearing Company, Inc., B- 418685, 2020 WL 3429044 (June 22, 2020), GAO rarely considers protest arguments raised by a potential subcontractor.

The U.S. Army Materiel Command (AMC) awarded a contract for its new generation landing craft to Vigor Iron Works, LLC (Vigor). Craft Bearing Company, Inc. (Craft Bearing) manufactures bearings in Virginia and wanted to provide them for the landing craft, but learned that the bearings would be bought from a company that manufactures them in England. 

Craft Bearing protested the award of the subcontract for the English-made bearings to the GAO, arguing that the subcontract violated the BAA clause in Vigor’s prime contract and the contracting officer was doing nothing about it.  

GAO dismissed Craft Bearing’s protest on several grounds showing how rigidly GAO applies its jurisdictional limits, seemingly regardless of the consequences. 

First, the protest was dismissed because it was not a challenge to the award of a contract with the government, but rather a challenge to the award of a subcontract, actually a second-tier subcontract. With limited exceptions, GAO only has protest jurisdiction over contracts the government awards and not protests of subcontracts awarded by prime contractors or subcontractors at any tier.

More significant was the fact that Craft Bearing’s protest did not fit the typical exception under which GAO will consider a protest involving award of a subcontract: where a subcontract was essentially awarded “by” the government. This exception involves the situation, according to GAO, “where the agency handled substantially all of the substantive aspects of the procurement and, in effect, took over the procurement, leaving to the prime contractor only the procedural aspects of the procurement, i.e., issuing the subcontract solicitation and receiving proposals.” 

Here, however, the prime contractor, and not the AMC, handled all meaningful aspects of the procurement, so Craft Bearing’s protest did not fit GAO’s exception. 

GAO also dismissed the protestor’s argument that the contracting officer was ignoring the violation of the BAA. GAO refused to consider that argument because whether Vigor followed the law in administering the contract was a matter of contract administration expressly beyond GAO’s jurisdiction. 

In the end, the protest was unfortunately a waste of a bidder’s time and money. Making matters worse, the protest was not filed on time and was the kind of protest expressly prohibited by the GAO regulations. 

As this decision demonstrates, it is important for potential protestors to understand the limits of GAO’s bid protest jurisdiction. The attorneys at Berenzweig Leonard routinely provide contractors guidance focusing on identifying valid protest arguments so that the client’s time and resources are efficiently invested in the protest. 

Terry O’Connor is a Partner and Director of Government Contracts at Berenzweig Leonard.