By Heather Mims
Ordinarily, the GAO will decline to review the termination of contracts for convenience because such actions are matters of contract interpretation and are more properly brought within the context of a CDA claim. However, in the recent decision of AutoFlex, Inc., B-415926 (Apr. 19, 2018), the GAO noted that it will review the propriety of a termination for convenience where the termination flows from a defect the contracting agency perceived in the award process.
AutoFlex, Inc. was one such case. There, the RFQ was issued as a small business set-aside for a fixed-price contract for the lease of four 2018 Chevrolet Suburbans. The RFQ stated award would be made on a lowest-price, technically acceptable basis.
The agency received five quotes in response to the solicitation, including, as relevant here, quotes from AutoFlex and District Fleet. District Fleet filed the lowest-price quotation, which the agency originally found technically unacceptable. The agency then subsequently made the award to AutoFlex, the incumbent, and the second lowest-price offeror.
District Fleet then filed an agency-level protest. The agency ultimately found that its evaluation of District Fleet’s quotation was erroneous and found that District Fleet’s quote was technically acceptable. Thus, the agency terminated AutoFlex’s contract and awarded the contract to District Fleet. AutoFlex’s protest to the GAO followed.
Specifically, AutoFlex argued that the agency unreasonably terminated its contract. The GAO first noted that generally, it will not review the termination of contracts for convenience. However, the GAO will review the propriety of a termination where it flows from a defect the agency perceived in the award process. In such cases, the GAO will review the award procedures that underlie the termination decision for the limited purpose of determining whether the initial award was improper and, if so, whether the corrective action taken was proper. However, the GAO will not object to the corrective action taken so long as the action taken is appropriate to remedy the impropriety in the award process.
While the GAO ultimately denied AutoFlex’s protest, this protest serves as a good reminder that, under the right circumstances, the GAO will occasionally review a termination for convenience decision.
About the Author:
Heather Mims is an associate attorney at Centre Law & Consulting. Her practice is primarily focused on government contracts law, employment law, and litigation. Heather graduated magna cum laude from the George Mason School of Law where she was the Senior Research Editor for the Law Review and a Writing Fellow.