GAO Denies Protest by 1st SBC Solutions over Treasury IT Services Award to Agovx
In a recent decision issued on August 1, 2025, the U.S. Government Accountability Office (GAO) denied a protest filed by 1st SBC Solutions, LLC against the Department of the Treasury’s award of a task order to Agovx LLC. The case, docketed as B-423172.4 and B-423172.5, involved a competition under the 8(a) STARS III GWAC for information technology services to support the IRS’s enterprise network.
1st SBC Solutions, an incumbent contractor, challenged the agency’s decision on four main grounds: (1) that the agency failed to engage in meaningful discussions during corrective action; (2) that the agency improperly accepted Agovx’s proposal despite alleged noncompliance with the RFP’s personnel identification requirements; (3) that Treasury failed to conduct a reasonable price realism analysis; and (4) that the agency inappropriately considered a past performance reference submitted by Agovx’s subcontractor that did not meet the solicitation’s 30% performance threshold. The GAO denied all four protest grounds, finding no merit or competitive prejudice resulting from the alleged flaws.
The first allegation centered on whether the IRS’s corrective action—limited to confirming key personnel availability—constituted unfair or inadequate discussions. While GAO acknowledged that fairness standards apply under FAR Subpart 16.5, it found that 1st SBC failed to demonstrate competitive prejudice. The agency had not identified any weaknesses or deficiencies in 1st SBC’s proposal that would have necessitated broader discussions. Without such deficiencies or an indication of how 1st SBC might have materially improved its proposal, GAO concluded that the scope of exchanges was reasonable.
Second, the protester argued that Agovx’s price proposal failed to comply with the solicitation because it did not include specific employee names in the price sheet, contrary to the RFP’s instructions. GAO rejected this claim, noting that the RFP instructions did not expressly state that failure to include names would render a proposal unacceptable. Furthermore, 1st SBC itself had used “TBD” for some personnel in its own price submission. GAO also emphasized that mere procedural inconsistency without resulting competitive disadvantage or change in the protester’s proposal strategy is insufficient to sustain a protest.
On the third point, 1st SBC asserted that Treasury failed to conduct a proper price realism analysis of Agovx’s significantly lower price. The GAO disagreed, finding that the solicitation required a realism review, which the agency performed by comparing proposed labor hours and rates to an Independent Government Cost Estimate (IGCE). Importantly, Agovx proposed more labor hours than 1st SBC, suggesting a robust technical approach. The lower price, GAO found, stemmed from Agovx’s greater discounts from its established labor rates rather than any under-resourcing. Thus, GAO determined that Treasury’s realism analysis was consistent with the RFP and not arbitrary.
Finally, 1st SBC objected to the evaluation of Agovx’s past performance reference from a subcontractor performing less than 30% of the contract. Though the subcontractor’s involvement (29.45%) technically fell short of the 30% threshold, GAO found no prejudice. The agency had already rated Agovx’s other two references—performed by Agovx itself—as highly relevant and similar in size, scope, and complexity to the solicited work. GAO concluded that even without considering the subcontractor’s reference, Agovx’s rating of “Good” under the past performance factor was justified. Moreover, the agency explicitly acknowledged that 1st SBC held a technical advantage on past performance, but reasonably determined that the 25% price premium did not warrant award.
In sum, this case reinforces the principle that procedural missteps—real or perceived—must be accompanied by a showing of actual competitive prejudice to sustain a protest. GAO’s decision highlights that even incumbents with excellent past performance must contend with agencies’ discretion in applying best-value tradeoff methodologies, provided the process is reasonable and well documented.
Disclaimer: This summary is for informational purposes only and does not constitute legal advice. While based on an official GAO decision, readers should consult the original decision or a qualified legal professional for specific guidance.