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Published on February 22, 2023 • Law

Non-Profit Awarded Contract Funded With Federal Money. Did this Make the Award a Federal Procurement?

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A non-profit organization issued a solicitation and awarded a contract. The contract was funded by a cooperative agreement with the government. An unsuccessful bidder filed a protest challenging the award. GAO determined it lacked jurisdiction over the protest. A challenged contract may be funded with federal money, but GAO only has jurisdiction over protests challenging awards made by a federal agency. Here, other than providing funding, the government was not involved in the procurement.

Acclaim Systems, Inc., GAO B-421379, B-421379.2

Background

The Association of Food and Drug Official (AFDO) is a non-profit organization. The AFDO represents state and local agencies that regulate food. AFDO had a cooperative agreement with the Food and Drug Administration (FDA). Using funds from the cooperative agreement, AFDO issued a solicitation for information technology services.

Acclaim Systems submitted a proposal in response to AFDO’s solicitation. AFDO didn't select Acclaim for award. Acclaim filed a protest with GAO.

Analysis

The agency requested dismissal of the protest. The agency reasoned the procurement involved a non-profit, not a federal agency. Thus, GAO lacked jurisdiction. Acclaim argued that AFDO received federal funding for the procurement, and that the FDA was therefore involved in the procurement.

GAO is authorized to hear protests under the Competition in Contracting Act (CICA). Jurisdiction under CICA is not based on the expenditure of federal funds. Rather, CICA defines a protest as an objection to an award made “by a federal agency.”

Here, AFDO issued the solicitation. Acclaim submitted its proposal to AFDO. AFDO made the award. Other than providing funding for the contract, the FDA was not involved in the procumbent. GAO lacked jurisdiction to hear a protest.

Acclaim is represented by Kailish L. Kalantri. The agency is represented by Jon J. Gottschalk of the Department of Health and Human Services. GAO attorneys Sarah T. Zaffina and Jennifer D. Westfall-McGrail participated in the preparation of the decision.

--Case summary by Craig LaChance, Senior Editor

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