Paul Khoury Discusses GAO Decision Advising Pentagon to Cancel Cloud Services Award

June 8, 2018

Paul F.  Khoury, co-chair of Wiley Rein’s Government Contracts Practice, was quoted by Bloomberg BNA’s Federal Contracts Report in a June 6 article regarding the U.S. Government Accountability Office’s (GAO) recent decision that the U.S. Army overstepped its authority in granting a $950 million contract to a Virginia-based cloud services company. The contract amount was later reduced to $65 million by the Pentagon. According to the article, a bid protest by a competitor earlier this year demonstrated that the U.S. Army had no authority to award the work under an Other Transaction Authority (OTA) prototyping arrangement, and that it had violated federal acquisition regulations in awarding the contract without a competitive bidding process.

Mr. Khoury said this decision has been closely watched by industry and U.S. Department of Defense (DOD) stakeholders because they were unsure about what, if any, recourse they could have if their OTA proposals weren’t treated fairly. “This decision indicates that the GAO will police whether DOD properly follows the letter of its statutory authority in awarding follow-on transactions like the $950 million production OTA at issue here,” Mr. Khoury said.

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