Agency: General Services Administration
Disposition: Protest Sustained in Part and Denied in Part
Decided: February 15, 2019
Keywords: Small Business Set-Asides, Mentor-Protégé Program
General Counsel P.C. Highlight: A solicitation’s limitation on a joint venture’s ability to submit a proposal as a Contractor Team Arrangement (CTA) that relies on the experience of subcontractors that are not members of the joint venture is unduly restrictive of competition.
Summary of Facts
A small business set aside solicitation was issued September 10, 2018 for an award of new contracts in GSA’s One Acquisition Solution for Integrated Services (OASIS) small business pool of government-wide multiple-award indefinite-delivery, indefinite-quantity (IDIQ) contracts. The RFP advised that awards would be made to the offerors “whose proposals are found to be the most highly rated under the non-cost/price factors and that offer a fair and reasonable cost/price.” The non-cost/price factors included relevant experience; past performance; and systems, certifications, and clearances. For offerors that submitted proposals as part of a mentor-protégé joint venture, the RFP stated that they may identify projects that were performed by the individual joint venture members, but limited the number of projects that may be identified as being performed by a large business mentor firm. Ekagra Partners filed a protest prior to the closing date of November 13.
The RFP also prohibited joint ventures, such as a mentor-protégé joint venture, from submitting proposals that rely on the experience of subcontractors (known as “hybrid” CTAs), but allowed small businesses to submit proposals as CTAs where the small business is a prime contractor and other firms act as subcontractors, and thereby rely on the experience of both the prime contractor and the subcontractors.
The Small Business Administration’s (SBA) small business mentor-protégé program allows businesses to serve as mentors to small business protégé firms to provide “business development assistance” to protégé firms and “improve the protégé firms’ ability to successfully compete for federal contracts.” If SBA approves a mentor protégé joint venture, the joint venture is permitted to compete as a small business for “any government prime contract or subcontract, provided the protégé qualifies as small for the procurement.”
Basis of Protest
Ekagra protests the terms of the solicitation arguing (1) the RFP places unreasonable limits on the extent to which mentor-protégé joint venture offerors can rely on the experience of the large business mentor firm, and (2) the RFP improperly prohibits joint venture offerors from forming a CTA under which the offeror relies on the experience of subcontractors that are not part of the joint venture.
Ekagra argued that the solicitation’s limitation on the number of projects that may be submitted by a large business mentor firm is unreasonable because it hinders otherwise qualified and capable small businesses from presenting their most competitive offers and that there is no reasonable basis for the agency to distinguish between the mentor and protégé members of a joint venture for purposes of evaluating experience since the joint venture itself would be considered small. GSA argued that the solicitation limited the amount of experience that can be credited to a large business mentor because allowing a mentor-protégé joint venture to rely primarily upon the qualifications of large business members’ experience gives the joint venture an unfair competitive advantage as compared to small businesses that are not part of joint ventures. GSA also argued that the limitation was necessary to ensure that the small business protégé is capable of performing the work.
Ekagra next argued that the RFP unreasonably prohibited joint ventures from proposing as a CTA that uses additional subcontractors that are not members of the joint venture (hybrid CTAs), and thereby relying on their experience. Since SBA’s regulations treat an approved mentor-protégé joint venture as a small business offeror, Ekagra argued that such an offeror should be accorded the same ability as any other small business to form teaming arrangements with prospective subcontractors. GSA argued that the inclusion of the challenged term is reasonable because it avoids “significant administrative burdens” in assessing the documentation that offerors must submit.
Protest Denied in Part and Sustained in Part
The GAO disagreed that the RFP placed unreasonable limits on a mentor-protégé joint venture offeror’s ability to rely on the mentor’s experience. When a contractor challenges a solicitation requirement as unduly restrictive of competition, the agency must establish that the requirement is “reasonably necessary to meet the agency’s needs.” The GAO found that GSA set forth a rational basis for the challenged solicitation term, holding that the agency reasonably explained that limiting the amount of experience that may be credited to a large business mentor ensures that the agency will be able to meaningfully consider the experience of the protégé member of the joint venture. The GAO denied the protest on this basis.
Regarding the portion of the protest dealing with CTAs and subcontractors, GAO agreed with Ekagra.
GAO determined that there was no basis to find the CTA limitation is reasonable, since GSA did not reasonably explain why allowing mentor-protégé joint ventures to compete as CTAs that include subcontractors poses significant administrative burdens that warrant inclusion of the term. The GAO sustained the protest on this basis.