BBS Company (B-423675)

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Category: Nonappropriated fund instrumentality, jurisdiction

Date: 1 August 2025

URL: https://www.gao.gov/products/b-423675

BBS Company, based in Pyeongtaek-si, South Korea, protested its exclusion from receiving a best and final offer (BAFO) request under Army and Air Force Exchange Service (AAFES) solicitation KO-24-22801 for barber shop services at Osan Air Base and Camp Yongin. The protest challenged both the process for notifying BBS of its exclusion and the underlying nonresponsibility determination. The Army moved to dismiss, asserting AAFES is a nonappropriated fund instrumentality (NAFI) and not a federal agency, placing the protest beyond GAO's statutory grant of authority.

GAO assessed whether the procurement was conducted by a “federal agency” under the Competition in Contracting Act (CICA). AAFES is specifically established as a NAFI: it administers nonappropriated funds, and neither the FAR nor CICA covers its procurements. The statutory framework, as well as GAO precedent, confirms that actions by NAFIs—including AAFES—are outside GAO’s protest jurisdiction. The protester's argument that AAFES’s association with DOD created a “nexus” sufficient for jurisdiction was explicitly rejected, and GAO cited numerous prior decisions upholding this bright-line rule.

The protest was dismissed for lack of jurisdiction.

Digest

Protest challenging the agency’s exclusion of the protester’s proposal is dismissed where GAO does not have jurisdiction to consider protests of procurements conducted by the Army and Air Force Exchange Service because it is not a federal agency.