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Protesting Contract Modification Awards at the GAO

Successfully challenging contract modification awards at the Government Accountability Office (GAO) under its bid protest function requires a showing that the modification at issue is outside the original scope of the contract under which it is being awarded. Additionally, the protestor must demonstrate competitive prejudice; that is, had the modification requirement been competed under a separate contract, the protestor would have had a substantial chance of receiving the award. The GAO generally does not review the propriety of contract modifications as it has determined that such matters fall outside the scope of its bid protest function. This is because contract modifications are usually contract administration actions that are not reviewable under the GAO’s bid protest function. Specifically, 4 C.F.R. § 21.5(a) requires the GAO to dismiss protests relating to the administration of an existing contract since contract administration is within the discretion of the agency and any administrative disputes between the contractor and the agency are resolved pursuant to the disputes clause of the contract and Contract Disputes Act.

However, the GAO recognizes that when the planned modifications are outside the scope of the contract, they may violate competition requirements. Therefore, a review of the scope of the modifications is permitted at the GAO when the protestor alleges that the modification exceeds the scope of the contract. In such cases, the primary GAO inquiry is not whether the contract modification is significant in terms of contract value or additional work. Instead, the inquiry is focused on resolving whether a material difference exists between the scope of the original and modified award. This inquiry is more akin to a comprehensive totality of circumstances analysis where the GAO reviews the original and modified contracts at issue to compare the type of work, expended costs, and the period of performance. Additionally, the GAO examines the original solicitation to determine whether it adequately indicated to potential offerors that the type of change the modification created could be reasonably anticipated.

In B-415994; B-415994.2, the GAO sustained such a protest involving an out-of-scope contract modification awarded under a task order of the GSA Alliant Government-wide Acquisition Contract (GWAC). The modification at issue was awarded using a technical direction letter (TDL) on an existing Alliant task order issued to the intervenor. The TDL in question was issued to establish a commercial cloud computing facility, which the government contended was within the scope of the task order. The task order contemplated support for cloud system technology insertion initiatives, including the transfer and transition of existing and emerging technologies. The protestor argued that the TDL was outside the scope of the intervenor’s task order and that GSA’s procurement of services under the TDL should have been competed among all holders of the Alliant GWAC. The government argued that the TDL was within the scope of the task order by citing specific sections of the task order that required the intervenor to provide general information technology systems support. However, the GAO disagreed, finding that the scope of the work contemplated by the TDL was materially different from the scope of work of the task order. The GAO began its analysis by reviewing the definition and function of a TDL under the task order, noting, among other limitations, that TDLs under the task order could not be used to order added deliverables that may cause the contractor to incur additional costs.

In its decision, the GAO compared the scope of the work of the original task order with that of the TDL and noted that the TDL's scope was restricted to providing research and analysis support for systems assessment. The GAO additionally provided examples of differences in the nature of the task order and TDL requirements. In noting the differences in one such example, the GAO opined that the establishment of an unclassified cloud environment under the TDL was substantively and materially different from the certification and accreditation-related work in classified environments originally contemplated under the task order. The GAO similarly determined that the TDL asked the intervenor to perform additional IT support services work that was beyond the scope of the initial task order, which did not anticipate the awardee performing any ongoing IT management. The GAO also noted that many more government offices were served under the TDL than originally anticipated under the Alliant task order, which, in any case, prohibited the use of a TDL for assigning new work or changing the quality or quantity of delivered services. The GAO ultimately decided that the work under the TDL was a material departure from the scope of the Alliant task order and sustained the protest. Additionally, since the protestor was an Alliant GWAC awardee, the GAO determined that the protestor was prejudiced by the government’s decision to award the work to the intervenor via the TDL. The GAO reasoned that had the additional work been separately competed under the Alliant GWAC instead of being awarded as a modification, the protestor would have had a substantial chance of receiving the award since it was an Alliant GWAC holder.

While the GAO generally defers to agencies to manage existing contracts, it intervenes amidst allegations of contract modifications introducing substantially different work. Successfully challenging a modification award for exceeding the scope of the underlying contract hinges on demonstrating that the modification altered the originally contemplated scope of the contract. Additionally, the protestor must demonstrate competitive prejudice. This can be achieved by showing that the protestor would have had a substantial chance of receiving an award had the requirement been separately competed.

This Bid Protests Insight provides a general summary of the applicable law in the practice area and does not constitute legal advice. Contractors wishing to learn more are encouraged to consult the TILLIT LAW PLLC Client Portal or Contact Us to determine how the law would apply in a specific situation.