TITLE: B-311235, United Way of the National Capital Area, May 16, 2008
BNUMBER: B-311235
DATE: May 16, 2008
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B-311235, United Way of the National Capital Area, May 16, 2008

   Decision

   Matter of: United Way of the National Capital Area

   File: B-311235

   Date: May 16, 2008

   Kelley P. Doran, Esq., Sean P. Bamford, Esq., Michael F. Scanlon, Esq.,
   and Scott P. Lindsay, Esq., Kirkpatrick & Lockhart Preston Gates Ellis
   LLP, for the protester.
   Kerry McTigue, Esq., R. Alan Miller, Esq., and Linda Fallowfield, Esq.,
   Office of Personnel Management, for the agency.
   Jonathan L. Kang, Esq., and Ralph O. White, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Government Accountability Office does not have jurisdiction to hear
   protest of the signing of a memorandum of understanding under a
   competition conducted by a Local Fund Campaign Committee of the Combined
   Federal Campaign, because, while this action would appear to be a
   procurement of services for the benefit of the government, a Local Fund
   Campaign Committee is not a federal agency.

   DECISION

   The United Way of the National Capital Area protests the selection of
   Global Impact by the Combined Federal Campaign of the National Capital
   Area (CFCNCA) to serve as the principal combined fund organization (PCFO)
   for the Combined Federal Campaign (CFC) activities in the Washington, D.C.
   metropolitan area. The United Way argues that the CFCNCA did not conduct a
   fair and reasonable competition in selecting Global Impact as the PCFO for
   the 2008 CFC campaign year. The Office of Personnel Management (OPM)
   argues that the CFCNCA is not a federal agency, and that our Office
   therefore does not have jurisdiction to hear this protest. As discussed
   below, we agree with OPM that our Office does not have jurisdiction to
   hear the protest and dismiss it on that basis.

   BACKGROUND

   Organization of the CFC

   The CFC is the only officially-sanctioned program for soliciting federal
   government employees on behalf of charitable organizations. The CFC
   conducts annual campaigns in the federal workplace, and allows federal
   employees to make donations through payroll deductions or other forms of
   payment to an approved list of charities. The CFC has existed in various
   forms since the 1960s, and its origins lay in the efforts of various
   federal entities and commissions in the 1940s and 1950s to achieve
   uniformity in the manner in which federal employees are solicited by
   charities.[1]

   The current form of the CFC was established by two Presidential Executive
   Orders signed by President Reagan. Executive Order (E.O.) No. 12353
   recognized the need to "support and facilitate fund-raising on behalf of
   voluntary agencies through on-the-job solicitations of Federal employees
   and members of the uniformed services, and to ensure that the recipient
   agencies are responsible in the uses of the monies so raised." E.O. No.
   12353, 47 Fed. Reg. 12785 (Mar. 23, 1982). Executive Order No. 12404
   further explained the objectives of the CFC as follows:

     The objectives of the Combined Federal Campaign are to lessen the
     burdens of government and of local communities in meeting needs of human
     health and welfare; to provide a convenient channel through which
     Federal public servants may contribute to these efforts; to minimize or
     eliminate disruption of the Federal workplace and costs to Federal
     taxpayers that such fund-raising may entail. . .

   E.O. No. 12404, 48 Fed. Reg. 6685 (Feb. 10, 1983).

   In order to meet the objectives of the CFC, the director of OPM is
   directed to "make arrangements" for the annual CFC, including prescribing
   "such rules and regulations as may be necessary to implement this Order."
   E.O. No. 12353, 47 Fed. Reg. 12785 (Mar. 23, 1982). The CFC is now
   governed by regulations promulgated by OPM at 5 C.F.R. part 950. These OPM
   regulations define the CFC as "the charitable fundraising program
   established and administered by the Director of the Office of Personnel
   Management (OPM) pursuant to Executive Order No. 12353, as amended by
   Executive Order No. 12404, and all subsidiary units of such program."[2] 5
   C.F.R. sect. 950.101. The regulations state that the Director of OPM
   "exercises general supervision over all operations of the CFC, and takes
   all necessary steps to ensure the achievement of campaign objectives." Id.

   The CFC is comprised of more than 250 local campaigns across the country.
   Each local campaign is run by a local federal coordinating committee
   (LFCC), which is "the group of Federal officials designated by the
   Director to conduct the CFC in a particular community." Id. LFCCs are
   comprised of volunteers who are federal government employees and
   representatives of employee unions and other employee groups. 5 C.F.R.
   sect. 950.103(a). Among the duties of the LFCC are ensuring compliance
   with OPM regulations, determining the eligibility of local charitable
   organizations to participate in the CFC, and selecting a PCFO to act as
   the LFCC's "fiscal agent and campaign coordinator" to administer the
   campaign. 5 C.F.R. sect. 950.104(b), (c).

   LFCCs must solicit applications from entities seeking to serve as PCFOs
   "on a competitive basis," and, in making a selection decision, must
   consider such factors as "the capacity of the organization to manage an
   efficient and effective campaign, its history of public accountability,
   use of funds, truthfulness and accuracy in solicitations, and sound
   governance and fiscal management practices." 5 C.F.R. sect. 950.104(c).
   The competition by LFCCs to select a PCFO must provide for a public
   solicitation, and the solicitation period must remain open for a minimum
   of 21 days. Id. The OPM website provides additional guidance to LFCCs for
   the selection of a PCFO, including deadlines for the LFCC to conduct the
   competition, minimum solicitation notice and evaluation periods, and
   requirements for evaluation. LFCC Guidance for PCFO Selection and
   Oversight, available at:
   http://www.opm.gov/cfc/suggestions/25-Oct-PCFO-Selection-Process.asp.

   The PCFO is responsible for conducting the fundraising efforts of the
   local campaign and ensuring that employee donations are properly
   distributed to designated charities. 5 C.F.R. sect. 950.105(d).
   Participation as a PCFO is limited to "federations, charitable
   organizations or combinations thereof." Id. at (c). All fees and
   reimbursement of expenses paid to a PCFO are taken from federal employees'
   donations through the CFC; no appropriated funds are used to pay PCFOs.
   OPM Request for Dismissal, Feb. 14, 2008, at 2.

   The Instant Protest

   The protest here concerns the competition conducted by the CFCNCA to
   select a PCFO for the 2008 campaign. The CFCNCA issued a solicitation in
   August 2007, stating that "[t]he Office of Personnel Management (OPM) has
   authorized the [CFCNCA] to conduct a contracting initiative with a PCFO
   for 2008." Solicitation at 1. The solicitation further states that "Title
   5, Code of Federal Regulations, Part 950.104 authorizes the LFCC to
   solicit applications from federations, charitable organizations, or
   combinations thereof to serve as the PCFO; and to select a PCFO to act as
   its fiscal agent and campaign administrator for the CFC." Id. at 2.

   The solicitation anticipated award of a memorandum of understanding (MOU)
   for a base period of 1 year, i.e., the 2008 campaign for the National
   Capital Area, with options for up to 2 additional years, i.e., the 2009
   and 2010 campaigns. Applicants were instructed to "provide evidence of the
   organizational capacity, capability, and experience to meet the
   requirements of the statement of work, and submit a written campaign plan
   addressing the factors in the statement of work." Solicitation at 11. As
   part of the written campaign plan, applicants were required to submit a
   "complete budget based on projected expenses . . . along with a narrative
   justification explaining rationale[s] or formulas used in calculating
   major cost categories." Id. at 13. Applicants were also required to
   certify that they "will abide by the directions, decisions, and
   supervision of the LFCC and/or OPM's Director and [Office of the Combined
   Federal Campaign]." Id.

   In October 2007, the United Way responded to the solicitation.[3] On
   February 1, 2008, the United Way received a letter stating that the CFCNCA
   had not selected its "proposal" to serve as PCFO.[4] CFCNCA Letter to
   United Way, Feb. 1, 2008. The letter, however, did not provide an
   explanation for the rejection of the proposal, and did not state whether
   an award had been made. The United Way requested a debriefing from the
   CFCNCA and OPM regarding its proposal prior to filing this protest, but
   both entities refused to debrief the United Way.[5] Protest at 7. On
   February 1, the CFCNCA entered into an MOU with Global Impact. Because, as
   discussed below, OPM declined to produce a report in response to this
   protest, the limited record here does not indicate the basis for the
   selection of the awardee's proposal.

   The United Way filed this protest with our Office on February 8. The
   protest named OPM and the CFCNCA as the contracting agencies responsible
   for the procurement. Protest at 2. Prior to the due date for its report on
   the protest, OPM requested that we dismiss the protest for lack of
   jurisdiction. Specifically, OPM argued that the protest did not concern "a
   procurement or contract from OPM or any federal agency," but instead an
   MOU "between an organization made up of Federal employees acting in a
   voluntary status in a program under the general supervision of OPM." OPM
   Request for Dismissal, Feb. 14, 2008, at 1. OPM did not address any of the
   allegations raised in the United Way's protest regarding the award
   decision, nor did the agency request dismissal of the protest on any basis
   other than jurisdiction.

   On February 26, we advised the parties via telephone conference and e-mail
   that we were still considering the jurisdictional issue, and that we would
   not dismiss the protest at that juncture. The 100-day statutory timelines
   in our protest process occasionally require us, as in this case, to
   develop a protest at the same time that we are considering a request for
   dismissal. We therefore requested that OPM submit a report on the protest,
   but also advised that the agency could further address its arguments
   regarding jurisdiction in its report. Instead of providing a report, OPM
   submitted a "Renewed Motion to Dismiss."

   DISCUSSION

   As discussed in detail below, we conclude that our Office does not have
   jurisdiction to hear the protest because it does not concern the award of
   a contract for the procurement of services by a federal agency. Under the
   Competition in Contracting Act of 1984 (CICA) and our Office's Bid Protest
   Regulations, we review protests concerning alleged violations of
   procurement statutes or regulations by federal agencies in the award or
   proposed award of contracts for procurement of goods and services, and
   solicitations leading to such awards. 31 U.S.C. sections 3551, 3552
   (2000); Bid Protest Regulations, 4 C.F.R. sect. 21.1(a) (2008). Our
   analysis of the issues in this protest concludes that, while what is at
   issue appears to be a procurement for services[6] for the benefit of the
   government, the procurement was not conducted by a federal agency, and we
   therefore lack jurisdiction.

   We first conclude that the MOU appears to concern a procurement for
   services. We reach this conclusion based on the fact that the LFCC issued
   a solicitation seeking competitive proposals for the performance of
   various services, in return for a reimbursement of the successful
   offeror's costs of performing those requirements. In addition, the
   solicitation specifically identifies the "services to be provided" by the
   PCFO in a "statement of work" that details the "requirements, performance
   expectations and deliverables required to serve as the PCFO to the local
   CFC campaign as outlined in 5 CFR 950 and CFC Guidance Memoranda."
   Solicitation at 2, 4. Further, the MOU awarded here states that Global
   Impact, the successful offeror, will "conduct CFC campaign support
   operations during the campaign year," including supporting the CFCNCA's
   oversight and audit responsibilities, and providing "annual, periodic, and
   monthly financial and programmatic reports of CFCNCA activities and
   events, budget, and financial matters." MOU at 1-2.

   Next, we think that these services are for the benefit of the government
   because the head of the executive branch, acting via the above-described
   executive orders, has decided that there is a benefit to having a
   streamlined system for the collection and distribution of charitable
   employee donations in the federal workplace. As discussed above, the
   relevant executive orders specifically charge the director of OPM with
   establishing the CFC in order to "provide a convenient channel through
   which Federal public servants may contribute" to charitable causes, and
   "to minimize or eliminate disruption of the Federal workplace and costs to
   Federal taxpayers that such fund-raising may entail." E.O. No. 12404, 48
   Fed. Reg. 6685 (Feb. 10, 1983).

   The services provided under the MOU here are thus procured for the purpose
   of assisting OPM in meeting its obligations under the relevant executive
   orders. In light of the purposes set forth in the executive orders, and
   the scope of the services identified in the solicitation and MOU, we
   conclude that the MOU would appear to be a contract for the procurement of
   services of more than de minimis value to the government, which would
   normally place the protest within the scope of our bid protest
   jurisdiction.[7] See Great South Bay Marina, Inc., B-296335, July 13,
   2005, 2005 CPD para. 135 at 3.

   Finally, we address whether this procurement for services was conducted by
   a federal agency. OPM argues that this protest concerns a competition
   conducted by the LFCCs, which, it contends, are entities outside of, or
   other than, the government. While we view this matter as a considerably
   closer call than does OPM, we agree.

   The legal character of LFCCs and their relationship to OPM is sui generis.
   LFCCs are a creation of OPM, and OPM plays a central role in their
   function. The regulations promulgated by OPM state that the CFC shall be
   run at the local level by LFCCs, each of which is established by, and
   subject to the direct control and supervision of, the director of OPM.[8]
   5 C.F.R. sect. 950.101. The Director of OPM has authority to supervise,
   audit, investigate, and discipline the LFCCs. 5 C.F.R. sections
   950.102(c), 950.603. LFCCs, in turn, must obtain PCFO services, and must
   solicit proposals to do so, in accordance with OPM regulations. 5 C.F.R.
   sect. 950.104(c). Specifically, the OPM regulations direct the LFCCs to
   conduct a competition to select a PCFO. 5 C.F.R. sect. 950.104(c).

   While we recognize that LFCCs appear to act in a quasi-official capacity,
   we see no basis to find that the LFCCs are themselves federal agencies.
   Moreover, while LFCCs are regulated by OPM, it is not clear that OPM is
   actually involved in, or responsible for the MOUs. As OPM notes, the
   agency is not involved with the drafting or issuance of solicitations,
   evaluation of proposals, or selection of successful offerors. Further, OPM
   notes that the LFCC here, the CFCNCA, is not comprised of OPM employees,
   but rather representatives from other federal agencies and employee
   unions, all of whom are acting on a voluntary basis. Additionally, the MOU
   here between the CFCNCA and Global Impact is signed by the chair of the
   CFCNCA, and was not signed or otherwise approved by OPM. See MOU at 6. On
   this record, while we think this issue is a close one, and while we
   recognize that the LFCCs are being used by OPM to supplement its
   management of the government-wide CFC effort, we cannot conclude the
   procurement conducted here by the CFCNCA was actually conducted by OPM, or
   any other federal agency.

   In summary, we conclude that this protest does not concern a procurement
   for services by a federal agency, and that therefore we do not have
   jurisdiction to hear this protest.

   The protest is dismissed.

   Gary L. Kepplinger
   General Counsel

   ------------------------

   [1] As OPM's history of the CFC relates, "Prior to the 1950's, on-the-job
   fundraising in the federal workplace was an uncontrolled free-for-all."
   History of Charitable Fundraising Within the Federal Service, available
   at: http://www.opm.gov/cfc/html/cfc_hist.asp.

   [2] In appropriations law decisions, we have stated that our Office
   "recognizes the CFC as a legitimate, government-sanctioned charity
   fund-raising campaign with which government agencies may cooperate."
   Invoice to IRS for that Agency's Share of CFC Solicitation Expenses
   Incurred in Northern Utah in 1985, B-225860, Feb. 12, 1988, 67 Comp. Gen.
   254. Our Office has also recognized that, under certain circumstances,
   agencies may expend appropriated funds "for the preparation of campaign
   instructions and mailing labels and for the distribution of campaign
   materials" in support of the CFC. Id.

   [3] The application at issue here was submitted by the United Way of the
   National Capital Area and the United Black Fund, but the protest was filed
   and pursued primarily by the United Way.

   [4] The OPM regulations, discussed above, describe the submissions
   provided as a result of this competition as "applications." 5 C.F.R. sect.
   104(c). The solicitation here, and the letter advising the United Way that
   it was not selected, refer to these submissions as proposals. E.g.,
   Solicitation at 1 ("To be considered, 5 copies of your proposals must be
   received by hand delivery . . ."); CFCNCA Letter to United Way, Feb. 1,
   2008 ("Thank you for your proposal to serve as [PCFO] for the Combined
   Federal Campaign of the National Capital Area."). From this point forward,
   we will use the terminology of the solicitation and refer to these
   submissions as proposals.

   [5] The CFCNCA subsequently agreed to provide a debriefing to the United
   Way on March 4. E-mail from CFCNCA to United Way, Feb. 26, 2008. On March
   3, however, the CFCNCA withdrew its offer of a debriefing, explaining as
   follows: "In light of the pending litigation initiated by [the United
   Way], we are unable to meet with you and your representatives regarding
   the [United Way] 2008 PCFO application on March 4, 200[8]." E-mail from
   CFCNCA to United Way, Mar. 3, 2008.

   [6] For purposes of this decision, we consider the MOU a contract because
   it is a mutual agreement between the parties which requires Global Impact
   to perform services for the LFCC in return for reimbursement of its costs.
   In this regard, OPM argues that the MOU is not a government contract
   because the LFCC is not a federal agency, and that no federal agency is a
   party to the MOU; OPM does not dispute that the MOU appears to create a
   contractual obligation between the LFCC and Global Impact. See OPM Renewed
   Motion to Dismiss, Mar. 12, 2008, at 5.

   [7] In its initial request for dismissal, OPM argued that our Office
   lacked jurisdiction because the MOU does not involve appropriated funds.
   Since the passage of CICA, our bid protest jurisdiction has not been based
   on the expenditure of appropriated funds. USA Fabrics, Inc., B-295737,
   B-295737.2, Apr. 19, 2005, 2005 CPD para. 82 at 2. Instead, as discussed
   above, our jurisdictional concern is whether the procurement at issue is
   being conducted by a federal agency. Id.

   [8] As discussed above, OPM regulations define the CFC as the "charitable
   fundraising program established and administered by the Director of [OPM]"
   including "all subsidiary units of such program" such as the LFCCs. 5
   C.F.R. sect. 950.101.