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Bridge Contract Considered a “New Requirement”

  • By GCPC GovCon Legal Team
  • January 24, 2014
  • Blog Articles
  • 0 Comments

Bid Protest Weekly Newsletter by Bryan R. King, Attorney, General Counsel PC

Date: Friday, January 24, 2014, 4:34pm EST

HRCI-MPSC PASS, LLC, B-408919, B-408919.2, January 8, 2014
A benefit of filing a bid protest with the GAO is that meeting certain filing deadlines will invoke an automatic stay. The automatic stay hits the metaphorical pause button on the procurement process, preventing the agency from moving forward until the protest has been resolved. This is great for protesting parties, preserving the opportunity to win an award. However, what about the agency that has a need for the goods or services sought by the solicitation? The agency’s needs do not suddenly cease to exist once a protest is filed.

To ensure a steady stream of goods and services, an agency that has to pause the procurement process pending a protest will generally issue a “bridge contract.” The bridge contract is typically a sole-source award designed to fulfill the agency’s needs during the anticipated time period of the protest. An interesting question is how are bridge contracts affected by the SBA’s 8(a) program? Generally, once a requirement has been accepted into the 8(a) program as a competitive award, that same requirement cannot be awarded as an 8(a) sole-source award. How does this principle affect sole-source bridge contracts awarded pending a protest?

This question was recently addressed by the GAO in HRCI-MPSC PASS, LLC. This case involved a competitively awarded 8(a) ID/IQ contract for professional administrative support services in support of the National Guard. The original award, made in 2009, had a maximum value of $90 million. As that contract approached its maximum value, the agency prepared a new competitive 8(a) solicitation. In the meantime, the agency issued a bridge contract to the incumbent contractor to ensure a continuation of services while the procurement on the new solicitation was conducted.

The agency released the new solicitation, a competitive 8(a) set-aside with a maximum value of $100 million. The agency made an award under that solicitation, however the award was protested. In response to the protest, the agency elected to undertake corrective action and reevaluate proposals. After the reevaluation, the agency made an award to a different offeror. That award was also protested, again resulting in corrective action being taken by the agency. Because of the multiple delays associated with the various protests, the agency issued another bridge contract to the incumbent contractor.

Apparently, the second bridge contract did not give the agency enough time to conduct a proper procurement, as a third bridge contract was contemplated. However, this time the agency sought to issue the bridge contract as an 8(a) sole-source award to an Alaskan Native Corporation, with a maximum value of $18 million. The protester challenged this contemplated 8(a) sole-source award, arguing that because the original requirement was accepted by the SBA as a competitive 8(a) award, the agency could not convert the requirement to an 8(a) sole-source award.

GAO found that the key inquiry was whether the bridge contract reflected a new requirement. The agency focused on an SBA regulation which stated that a solicitation qualified as a new requirement where it represented a change significant enough to cause a price adjustment of at least 25%. The agency argued that the bridge contract was for less than 20% of the value of the contemplated competitive 8(a) award—representing an approximately 80% price adjustment—and thus the bridge contract was a new requirement in comparison.

The SBA agreed with the agency, arguing that the original contract was issued as a competitive 8(a) award, and the agency intended to procure the follow-on contract as a competitive 8(a) award. The SBA argued that bridge contract was merely issued so that the agency could maintain continuous service pending the award of a follow-on contract. GAO agreed with the agency and the SBA, that the requirement represented by the bridge contract had never been accepted into the 8(a) program. As a result, GAO found no basis to object to the SBA’s acceptance of the requirement as an 8(a) sole-source award, and denied the protest.

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