Subject to limited exceptions, GAO’s bid protest jurisdiction over Department of Defense (DoD) awards of task orders under multiple-award contracts is limited to those “valued in excess” of $25 million.  While that seems straightforward enough, GAO’s recent decision in ELS, Inc., B 421989, B 421989.2, Dec. 21, 2023, highlights the complexities that can arise in calculating a task order’s value.

ELS involved a Navy procurement for administrative and engineering support services.  The solicitation provided for a cost-plus-fixed-fee task order and contained multiple cost-reimbursable contract line items.  Relevant here, the task order was subject to FAR clause 52.232-20, Limitation of Cost, pursuant to which the government is not obligated to reimburse a contractor for costs incurred in excess of the task order’s estimated cost.  ELS protested the Navy’s award of the task order to GreenXT.  The awarded task order reflected GreenXT’s proposed cost of $24,848,774, which was just below GAO’s $25 million jurisdictional threshold.  But the Navy determined GreenXT’s total evaluated cost—i.e., the total amount the Navy expected to pay—to be $25,116,561, which was above the GAO threshold. 

The Navy moved to dismiss ELS’ protest, arguing that the relevant number for purposes of GAO’s protest jurisdiction was the actual value of the awarded task order and here, that value, $24.8 million, was below the $25 million threshold.  ELS conversely argued the salient consideration was the total amount the Navy itself had determined it would pay GreenXT: $25.1 million.

GAO dismissed ELS’ protest for lack of jurisdiction.  In so doing, GAO held the general rule for purposes of determining task order value is, simply enough, the stated value of the awarded task order, because the primary focus is on the contractual agreement between the parties, not what the awardee might ultimately be paid for contract performance.  And here, although the task order included cost-reimbursable line items that pushed the evaluated cost above the jurisdictional threshold, GAO explained that the inclusion of FAR clause 52.232-20 absolved the government of liability for any costs incurred in excess of the task order’s awarded value.  GAO noted that only in rare instances, such as procurements involving unconventional compensation methods or unusual evaluation techniques, is departure from the general rule appropriate, and those circumstances were not present in ELS.

We would like to thank Cherie J. Owen, Consultant, for her contribution to this alert.