In the recent MicroTechnologies LLC and SMS Data Products Group, Inc. decisions, the Government Accountability Office (GAO) sustained protests challenging the Agency’s failure to perform the required price risk analysis under DFARS 252.204-7024. These cases mark the first time the GAO has addressed the application of the relatively new DFARS provision. 

This article discusses the provision, the GAO’s holdings, and key takeaways for contractors.

DFARS 252.204-7024

In March 2023, the Department of Defense (DoD) implemented DFARS 252.204-7024, Use of Supplier Performance Risk System (SPRS) Assessments. DoD’s goal in implementing the provision was to ensure the consideration of price risk, item risk, and supplier risk “when determining contractor responsibility” DFARS Final Rule: Defense Federal Acquisition Regulation Supplement: Use of Supplier Performance Risk System (SPRS) Assessments (DFARS Case 2019-D009) 88 Fed. Reg. 17336 (Mar. 22, 2023).

The DFARS provision—which is applicable to most DoD solicitations for supplies and services—requires a contracting officer to “consider SPRS risk assessments during the evaluation of quotations or offers received” in response to the solicitation, as follows:

1. Item risk will be considered to determine whether the procurement represents a high performance risk to the Government.
2. Price risk will be considered in determining if a proposed price is consistent with historical prices paid for a product or a service or otherwise creates a risk to the Government.
3. Supplier risk, including but not limited to quality and delivery, will be considered to assess the risk of unsuccessful performance and supply chain risk.

DFARS 252.204-7024(c)(1)-(3). The provision also provides that “[t]he Contracting Officer may consider any other available and relevant information when evaluating a quotation or an offer.” DFARS 252.204-7024(e).

To consider these risks, contracting officers are required to utilize the SPRS. The SPRS gathers, processes, and displays data about supplier performance and determines the risk associated with the contractor.

The GAO’s Ruling on DFARS 252.204-7024

On March 24, 2024, the Department of the Air Force issued a fair opportunity proposal request (FOPR) for the Combined Air and Space Center Operations Center (CAOC) communications support for the U.S. Air Force Central Command MicroTechnologies LLC,B-423197.2, Mar. 4, 2025, 2025 WL 831122 at *2. The FOPR incorporated DFARS 252.204-7024 and required the Agency to conduct a supplier and price risk analysis. Id. at *3. Both MicroTechnologies, LLC (MicroTech) and SMS Data Products Group, Inc. (SMS) submitted proposals. The record in the protest showed that, during the evaluation, the Agency performed a limited supplier risk analysis but failed to perform a price risk analysis. SMS Data Products Group, Inc., B-423197, Mar. 4, 2025, 2025 WL 831119 at *9. Both MicroTech and SMS protested the Agency’s failure in this regard under DFARS 252.204-7024.

The record confirmed that the Agency had not performed a price risk analysis in the SPRS system. The Agency argued that the SPRS did not have the proper data to conduct a price analysis, and that it considered “other available and relevant information” in lieu of performing a price risk analysis. MicroTechnologies LLC, 2025 WL 831119 at *9. Specifically, the Agency claimed that it relied on price analysis techniques listed in the Solicitation, FAR 15.404-1, to satisfy the DFARS requirement. Id.

In both cases, the GAO did not definitively determine whether the Agency could substitute its own price analysis in lieu of the required SPRS price analysis, nor did it confirm whether the price risk information was available to the Agency in the SPRS system. However, the GAO sustained both protests on the grounds that the Agency’s underlying price analysis was flawed. See generally id. As a result, the Agency could not “rely on an unreasonable price evaluation under the FAR to satisfy the DFARS requirement.” Id. The GAO found that the Agency 1) failed to perform the required SPRS price analysis and 2) relied on an unreasonable underlying price evaluation to satisfy the DFARS provision. 

What This Means for Contractors

The GAO’s decisions in MicroTechnologies and SMS marks the first instances in which the GAO sustained a challenge based on the agency’s failure to conduct a proper risk analysis as required by DFARS 252.204-7024. Going forward, contractors should ensure that the agency is conducting the required item, price, and/or supplier risk analyses as part of its evaluation process.

Additionally, contractors should monitor their data in SPRS. Contractors are permitted to access their own supplier, vendor, and awardee company data on the SPRS. If the data is wrong, contractors can challenge the information in the SPRS.