Protester Claimed Agency Needlessly Bundled Ancillary Services into Sole-Source Contract. Why Did GAO Let It Slide?

The protester challenged the award of a sole-source contract for aerial long-term fire retardant (LTFR) products and associated ancillary services. The protester argued that the agency improperly bundled services with the product, thereby limiting competition. But  GAO concluded that the agency had a reasonable basis for the bundling based on public safety needs.

Kaiterra Fire Systems, LLC, GAO, B-423952.2; B-423952.4

• Background – The U.S. Department of Agriculture’s Forest Service awarded a sole-source contract for aerial LTFR products to the awardee. The protester argued that including ancillary services in the contract limited competition and exceeded the agency’s needs.
• Interested Party Status – The agency argued the protester was not an interested party because it could not provide the LTFR products. The protester contended that it was an interested party capable of providing the ancillary services and, therefore, eligible for protest despite being unable to supply the LTFR product. GAO sided with the protester. The protester could arguably provide the ancillary services that had been bundled with the LTFR. If the protester prevailed, it could compete for a separate contract for the ancillary services.
• Bundling of Services – The protester argued that combining products with ancillary services was improper and limited potential competition. However, the agency defended its decision by citing safety requirements, indicating that mixed services were essential for operational effectiveness in wildfire fighting. The agency stated that deviations in services could jeopardize safety and effectiveness. GAO agreed with the agency, concluding that its rationale for bundling was reasonable given the unique and safety-sensitive nature of the services.

The protester is represented by Lee Dougherty, Esna Mihail, and Bryan Short of Effectus, PLLC. The intervenor, Perimeter Solutions LP, is represented by John G. Horan of Faegre Drinker Biddle & Reath LLP. The government is represented by Elin M. Dugan, Tyler Ellis, and Michelle M. Weiner of the U.S. Department of Agriculture. GAO attorneys Michelle Litteken and April Y. Shields participated in the decision.