Lost bid? Out of luck? Not if out of scope changes

I briefly introduced this subject from the Government Contracts Blog a week or so back but did not have time then to report much about it. It is worth taking the time, so here it is:

Let Bygones Be Bygones - Except When It Comes To "Out of Scope" Modifications

As a general matter, the GAO does not review matters pertaining to an agency’s contract administration decisions. 4 C.F.R. § 21.5(a). Contract modifications and changes fall into this category and bid protests raising issues related to the issuance of modifications or changes generally will not be considered by the GAO.

At other times, however, it may be to a contractor’s benefit to have a long memory and a watchful eye.

The Competition in Contracting Act (“CICA”) requires agencies to use full and open competition when acquiring goods or services. 10 U.S.C. § 2304.

Unless an agency invokes an exception, an “out of scope” modification or change is essentially an improper sole-source award that circumvents CICA’s competition requirements. The GAO will thus entertain a protest challenging a contract modification or change when the contractor alleges that the modification or change is “out of scope” of the awarded contract.

If the GAO sustains the protest, it may order the agency to terminate the contract and re-solicit its modified requirements on a competitive basis, as it should have done in the first place. This remedy may afford a contractor another opportunity to compete for the agency’s requirements. A contractor should thus keep a watchful eye on its competitor’s contract to ensure that the work its competitor is being asked to perform falls within the scope of the contract as awarded and that it preserves its right to file a timely challenge at the GAO.

To prevail on a protest alleging an “out of scope” modification, a contractor must show that the contract as modified is materially different from the contract as awarded.

While no one factor is dispositive, the contract type and changes to the nature and type of work have received heightened attention in bid protest decisions. A contractor’s chances for success increase based on the number of factors that support the conclusion that the modification or change was “out of scope.”

Despite the lack of a bright-line rule, one thing remains certain. A contractor that lets bygones be bygones and ignores the manner in which its competitor’s contract is proceeding may never have an opportunity to make this showing and may be deprived of an opportunity to compete for a requirement that should have been subject to competition. Maintaining a vigilant guard could thus provide a piece of the pie that had appeared previously to be out of reach.