Incomplete Novation = No Direct Economic Interest

Parties with an unapproved novation agreement aren’t eligible to protest agency award decisions. The GAO found that under the bid protest provisions of the Competition in Contracting Act of 1984 only an “interested party” may protest a federal procurement. The protester must be an actual or prospective offeror to have a direct economic interest in the award of a contract. In the Matter of: Wyle Laboratories, Inc., File:  B-416528, dated September 7, 2018 the GAO held Wyle did not have a “direct economic interest in the procurement.” Its decision was based on the fact that Wyle’s Novation Agreement hadn’t been approved by the GSA.  Therefore, it was not an interested party and its protest was dismissed. Wyle wanted to challenge the terms of a request for quotation (RFQ), but the GAO found Wyle’s executed asset purchase agreement transferring all of the “assets and liabilities used in or relating to the…

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