Link: GAO Opinion
Agency: Department of the Army
Disposition: Request granted.
Keywords: Debarred or Suspended Contractors
General Counsel P.C. Highlight: Agencies may not award contracts to contractors that are debarred, suspended, or proposed for debarment, nor may they award contracts to firms that are affiliated with firms that are debarred, suspended, or proposed for debarment.
Active Deployment Systems, Inc. (ADS) protests the award of a contract, by the Department of the Army, under a request for proposals (RFP), for the lease of shower and sink trailers.
The RFP sought proposals to provide shower and sink trailers. The competition was set aside for small business firms. The RFP stated that award would be made to the offeror that submitted the lowest-priced, technically acceptable proposal.
The Army received proposals from five offerors, including ADS and the eventual awardee. The agency concluded that the awardee’s proposal was technically acceptable and offered the lowest price. As relevant here, the contracting officer (CO) reviewed the following sources of information when evaluating the awardee’s responsibility: the Central Contractor Registry; the awardee’s entries in the Online Representations and Certifications Application; the Excluded Parties List System (EPLS); and the Past Performance Information Retrieval System. The CO also consulted another CO who had prior experience with the awardee. Based on her review, the CO concluded that the awardee was not debarred, suspended, or proposed for debarment, and was a responsible contractor.
The Army notified ADS of the award and ADS contacted the CO and expressed its belief that the awardee intended to subcontract with firms that were proposed for debarment. In response to ADS’s contentions, the CO contacted the awardee and asked the awardee to identify the subcontractors it intended to use in performing the contract. The CO determined that none of the firms identified by the awardee were on the EPLS, and advised ADS that the agency intended to proceed with the award.
ADS argues that the Army failed to reasonably evaluate the awardee’s responsibility because, the protester contends, the awardee intends to subcontract with, and is otherwise affiliated with, three firms proposed for debarment. GAO states that agencies may not award contracts to contractors that are debarred, suspended, or proposed for debarment, nor may they award contracts to firms that are affiliated with firms that are debarred, suspended, or proposed for debarment. Additionally, agencies may not consent to a subcontract with a firm that is debarred or proposed for debarment, unless the agency head states in writing the compelling reasons for this approval action. GAO views an agency’s determination of whether an offeror is affiliated with or is subcontracting to, a firm that is debarred, suspended or proposed for debarment to be matters of offeror responsibility. As a general matter, GAO does not review a CO’s affirmative determination of responsibility. GAO will, however, consider a challenge to a CO’s affirmative determination of responsibility where it is alleged that definitive responsibility criteria in the solicitation were not met, or where the protester identifies evidence raising serious concerns that, in reaching the responsibility determination, the CO unreasonably failed to consider available relevant information or otherwise violated statute or regulation.
Here, GAO concludes that the protest is within its jurisdiction to consider because ADS has argued that the CO unreasonably failed to consider available relevant information regarding the awardee’s relationships with firms proposed for debarment.
In response to allegations raised by ADS prior to filing its protest with GAO, the CO obtained from the awardee a list of all of its proposed subcontractors, and was able to verify that none of them were debarred or proposed for debarment. While the awardee acknowledged that it had planned to purchase certain assets to be used in performing this contract from a contractor–which was proposed for debarment–during that firm’s bankruptcy proceeding, the CO reasonably concluded that the awardee would not be subcontracting with a debarred firm to perform this contract. Thus, the protest ground provides no basis to challenge the agency’s determination that the awardee was responsible.
ADS also argues that the awardee is affiliated with the three firms proposed for debarment, and is therefore ineligible for award. GAO states that the Small Business Administration (SBA) has determined that the awardee is not affiliated with these firms, in connection with a size-status protest. GAO states that because the analysis of a firm’s affiliation for purposes of debarment under FAR subpart 9.4 addresses the same considerations as the SBA’s affiliation analysis under the SBA’s size status regulations, GAO thinks that the SBA’s ruling here supports the agency’s affirmative responsibility determination, even though the CO did not review this matter at the time of award. In this regard, the FAR states that firms are affiliates of each other for purposes of debarment if “directly or indirectly, (1) either one controls or has the power to control the other, or (2) a third party controls or has the power to control both.” Similarly, the SBA regulations concerning affiliation for purposes of determining a firm’s size state that firms are affiliates “when one controls or has the power to control the other, or a third party or parties controls or has the power to control both.” Indicia of control common to both regulatory provisions, and addressed by the SBA in its decision, include common management, ownership, key employees. Thus, the record provides no basis to find that the awardee was affiliated with firms that were proposed for debarment. The protest is denied.