Protest Alleging SBA Violated Policies and Procedures

B-199721: Mar 11, 1981

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A company protested the proposed award of a contract by the Department of the Army to the Small Business Administration (SBA), and the proposed award of a subsequent subcontract by SBA under section 8(a) of the Small Business Act. The company alleged that SBA violated its operating procedures and that any contract payments by the Army would violate the Maybank Amendment prohibition on the use of Department of Defense appropriations and would violate the U.S. Code. GAO will review SBA compliance with its operating procedures governing the award of 8(a) subcontracts only when a showing of bad faith or fraud on the part of Government officials has been made. Since the company alleged neither fraud nor bad faith on the part of SBA officials, its allegation was not subject to review. Since the Maybank Amendment prohibition on the use of Defense appropriations does not apply to section 8(a) subcontracts, the company's allegation on this point was without merit. The U.S. Code provides that no contract will be made unless authorized by law; however, the purpose of this provision is to prevent Government officials from contracting beyond their legislative authorization. Since the contract was authorized by law and sufficient appropriations were available for that purpose, the provision was not violated. Accordingly, the protest was dismissed in part and denied in part.

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