GAO dismisses protests challenging GSA's $1 Gen AI pacts
Gettyimages.com/ Virojt Changyencham
By
Nick Wakeman
The Government Accountability Office never looked at the merits of Sage's complaints about the agreements with OpenAI and Anthropic instead dismissing them over jurisdiction and standing issues.
The only serious challenges to the General Services Administration’s OneGov strategy have ended in defeat after the Government Accountability Office refused to hear the merits of the arguments, citing legal technicalities.
In August, Ask Sage challenged the OneGov agreements GSA signed with Anthropic and Open AI that offered their products for $1 a year. Ask Sage complained that the agreements violated commercial pricing rules, created vendor lock-in problems and undermined competition.
Ask Sage also raised security and compliance concerns and an argument that the agreements, which GSA made through its OneGov initiative, were modifications that substantially changed the scope of the original contracts signed between the companies and their reseller.
But the Government Accountability Office did not rule on any of those allegations and dismissed the protests on Thursday, finding that Ask Sage was not an “interested party” because it was not a direct bidder for the contract itself.
GAO said it lacks the authority to review the case because the agreements were modifications to a GSA Schedule contract held by Carahsoft, a reseller that holds the schedule for Anthropic and OpenAI. The OneGov agreements were signed through that schedule.
GAO said modifications are considered contract administration matters, which are outside the watchdog agency's bid protest authority.
Ask Sage argued the OneGov agreements were “material” expansions of the scope to Carahsoft’s schedules. GAO dismissed this argument because Ask Sage is not an interested party.
Ask Sage would not be potential bidder for the contract, but a subcontractor because its products also listed under the same Carahsoft schedule contract that Anthropic and OpenAI are.
“We have found that a supplier or subcontractor for a contract is generally not an interested party to file a protest arguing that modification of the contract is outside the scope of the contract,” GAO wrote.
GAO issued separate rulings for the Anthropic and OpenAI agreements, but the language in the two decisions were virtually identical.
In a statement to WT, Ask Sage CEO Nicolas Chaillan said the company was “disheartened by the U.S. government's lack of accountability in circumventing proper competition and contract law through exploitative loopholes.”
He said these OneGov agreements are offering questionable, nearly-free services without long-term pricing transparency and that will push agencies into vendor lock-in scenarios.
“This practice not only undermines fair competition but also guarantees the squandering of billions in taxpayer dollars.”