In March, the Federal Circuit settled a split between the Government Accountability Office ("GAO") and the Court of Federal Claims that focused on the gray area between cooperative agreements and procurement contracts. Siding with the GAO, the appeals court ruled that the Department of Housing and Urban Development could not sidestep federal competition requirements by using cooperative agreements, instead of procurement contracts, to outsource its contract administration services. The ruling provides rare insight on the Federal Circuit’s interpretation of the Federal Grant and Cooperative Agreements Act, and serves as a warning shot against any federal agency that feels inclined to disregard the GAO. Similarly, federal contractors should remain vigilant and determine whether their agencies’ use of cooperative agreements gives rise to a potential protest.
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