The Government Accountability Office’s (GAO) recent decision in Blade Strategies, LLC, B-416752, 2018 WL 4584111 (Comp. Gen. Sept. 24, 2018), clarifies the GAO’s jurisdiction and standard of review for protests of other transaction agreements (OTAs), and also serves as a good reminder that all protests challenging an aspect of an agency’s solicitation — including the agency’s choice of an OTA over a procurement contract — must be filed prior to the time for receipt of initial proposals.
Generally, the GAO’s bid protest jurisdiction does not extend to the review of awards made under an agency’s “other transaction” authority; however, the GAO will review a timely protest that an agency is improperly using an OTA rather than a procurement contract. See 4 C.F.R. § 21.5(m).
As we have discussed on this blog, the GAO’s standard of review for this question seemingly has evolved over time. Traditionally, the GAO would evaluate whether an agency was attempting to “acquire (by purchase, lease, or barter) property or services for the direct benefit or use of the United States Government,” in which case a procurement contract would be required in accordance with the Federal Grants and Cooperative Agreements Act (FGCAA). See Rocketplane Kistler, B-310741, Jan. 28, 2008, 2008 CPD P 22.
This was necessary “to ensure that an agency [was] not attempting to avoid the requirements of procurement statutes and regulations” by exploiting its other transaction authority. Id.
However, in two recent decisions, MorphoTrust and Oracle, the GAO disregarded whether the OTA was designed to purchase goods or services for the Government’s direct benefit or use, and instead looked only to “whether the agency’s use of its discretionary authority was proper, i.e., knowing and authorized.” Oracle America, Inc., B-416061, May 31, 2018, 2018 CPD P 180; MorphoTrust USA, LLC, B-412711, May 16, 2016, 2016 CPD P 133 (holding that “although the FGCAA provides applicable guidance to all federal agencies when the choices are limited to (1) procurement contracts, (2) grants, or (3) cooperative agreements, it provides no guidance when determining when an agency may properly use its other transaction authority”).
The difference between these standards is stark: one prevents an agency from issuing an OTA where it should issue a procurement contract instead, while the other simply looks to whether Congress has bestowed an agency with sufficiently broad other transaction authority.
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The pre-award protest, filed with the Government Accountability Office (GAO) on Oct. 10, 2018, comes just two days before the Oct. 12 deadline for the Pentagon to accept bids from cloud service providers. IBM officials told Nextgov they still plan to submit a bid for JEDI, but the company’s protest takes issue with the Defense Department’s decision to award JEDI to a single cloud service provider.
In reconciling the two chambers’ bills, House members accepted a Senate provision to require the Defense secretary to study the frequency and effects of bid protests related to the same contract award filed at both the Government Accountability Office and the Court of Federal Claims.
But the bill the Senate sent to the conference committee process does contain two provisions aimed at bid protests. Although they are minor, they portend and may lay the groundwork for future attempts to change the protest process.
The deal was unusual not just for the extraordinarily high price tag, but for how it was handled. Instead of following traditional, competitive procurement rules, officials used something called a “production other transaction agreement” crafted by the Pentagon’s innovation outpost, the Defense Innovation Unit Experimental (DIUx). This essentially allowed the department to make the award based on the success of a prototype developed by REAN Cloud, thus bypassing the government’s expensive and time-consuming traditional procurement process. It was 
