GAO: AGENCY AWARD OF DELIVERY ORDER UNDER GSA FEDERAL SUPPLY SCHEDULE WAS IMPROPER

In Chicago American Manufacturing LLC., _ CPD_, 2022 WL 2438642 (5/23/2022) (CAM), the GAO granted a protest of a delivery order (DO) issued by the Army under a GSA Federal Supply Schedule (FSS) contract, where the awardee’s FSS contract failed to contain the product required by the Army under its RFQ.

Nature of the Procurement

The Army issued an RFQ under FSS procedures, FAR 8.4, to current holders of GSA Schedule 71 contracts, i.e., the furniture schedule. The Army’s solicitation contemplated the award of a delivery order to supply, deliver and install new furniture in buildings at Camp Casey, South Korea. Award was to be made to the vendor that was technically acceptable and had the lowest total price.  A technically acceptable quote needed to be acceptable under all three evaluation criteria: technical evaluation, schedule and past performance.  The RFQ advised that items quoted from “GSA contractors” shall be on their GSA Schedule contract.

The Army received quotes from three Schedule vendors including the awardee Inovo, and the protestor CAM. All quotes were deemed technically acceptable, but Inovo provided the lowest total price and was issued the DO. CAM filed this protest.

According to CAM, the Agency erred in rating Inovo’s quote as technically acceptable. Insofar as pertinent, the Army’s solicitation under the RFQ required the successful vendor to provide metal bunkbeds that would accommodate a 38W by 80L mattress. However, among the furniture items awarded to Inovo under the GSA Schedule, its metal bunkbed was only 78 inches long and therefore could not accommodate an 80-inch mattress as required by the Army. According to CAM, Inovo’s contract failed to contain the item that could meet the Army’s needs under its RFQ, and Inovo’s quote should have been rejected as unacceptable.

The GAO Rules

The GAO agreed with CAM.  It ruled that an ordering agency may not use GSA FSS procedures to purchase items that are not listed on the vendor’s GSA Schedule contract. All items quoted by a vendor in response to an agency RFQ are required to be on the vendor’s schedule contract as a precondition to award of the DO. Here, there was a discrepancy between the metal bunkbed awarded to Inovo under the GSA furniture schedule contract and the metal bunkbed quoted by Inovo in response to the RFQ. Where there is a discrepancy between a vendor’s GSA schedule contract and an RFQ quote, the terms of the Schedule prevail and are contractually binding.

The GAO concluded that under these circumstances Inovo was unable to meet the agency’s needs under the agency RFQ. Inovo’s quote should have been rated as unacceptable, and it was error for the agency to award the DO to Inovo.  CAM’s protest was sustained. The GAO recommended a re-evaluation of the submitted quotations; a new source selection decision; and reimbursement of costs and legal fees.

Lessons Learned

This decision is a wake-up call for both GSA Schedule contract holders and ordering agencies. GSA Federal Supply Schedule contracting has many advantages, but this case teaches us that it also has its limitations. It is incumbent upon all players to respect these differences in order to reap the benefits contemplated by this valuable procurement vehicle.