Agency: Department of Veterans Affairs
Disposition: Protest Dismissed
Decided: February 27, 2020
Keywords: Small Business Set-Asides; SDVOSB Set-Asides; Certificate of Competency
General Counsel P.C. Highlight: The SBA has the exclusive authority to review a contracting officer’s determination that a small business concern is not responsible. The GAO does not review certificate of competency referrals to the SBA, or the issuance of, or refusal to issue, a COC absent limited exceptions.
Summary of Facts
Precise Management, LLC, (PM) is a service-disabled veteran-owned small business (SDVOSB). PM protests the award of a contract to CDS Services, Inc., under request for quotations (RFQ) No. 36C25619Q0881, issued by the Department of Veterans Affairs (VA) for pest management services. The VA issued the solicitation on May 23, 2019 as a set aside for SDVOSBs. Award was to be made on a lowest-priced, technically acceptable basis, using three technical capability subfactors: relevant experience, contractor personnel/staff qualifications, and past performance. The VA evaluated PM’s quotation and found that it was technically acceptable and offered the lowest price.
However, as part of the responsibility determination, the contracting officer (CO) reviewed the relevant analysis report, which noted that PM “was a high, severe risk in multiple categories throughout the report with the highest (and worst) scores possible (9) in these categories.” Based on this, the CO concluded that PM did not have the financial capability to adequately perform the contract and was therefore nonresponsible and excluded from further consideration. The CO referred his nonresponsibility determination to the SBA for review
under the SBA’s certificate of competency (COC) procedures. The SBA agreed with the determination and denied PM a COC, based on its “overall analysis of the financial resources available, including the inconsistency of and lack of complete financials as well as the lack of financial capacity to perform and existing Tax Liens.”
On September 24, the VA awarded the contract to CDS Services, Inc. On October 2, PM filed an agency-level protest, which the agency denied on December 3, finding that PM was not an interested party.
Basis of Protest
PM challenges the VA’s evaluation of its quotation, including its nonresponsibility determination, the exclusion of its quotation from further consideration, and the award decision. PM also alleges that the VA improperly withheld pertinent information of its responsibility from the SBA when it referred PM for a COC determination.
The VA argues PM’s protest should be dismissed, because the denial of a COC by the SBA is not a matter to be considered by GAO, absent narrowly defined exceptions, not demonstrated by PM.
GAO explained that under the SBA’s COC program, agencies must refer to the SBA a determination that a small business is not responsible if that determination would preclude the small business from receiving an award. Additionally, SBA not GAO, “has the conclusive authority to review a contracting officer’s determination that a small business concern is not responsible.” GAO “does not review COC referrals to the SBA, or the issuance of, or refusal to issue, a COC absent limited exceptions.” The exceptions include protests that allege that the SBA failed to consider vital information bearing on the firm’s responsibility due to the manner in which the information was presented to or withheld from the SBA by the procuring agency.
GAO concluded that PM failed to allege facts that would qualify for an exception for it to review a COC determination made by the SBA. PM alleges that the VA failed to inform the SBA of its intention to exercise a third option year on a separate, ongoing contract that PM was performing for the VA in Louisiana. PM argues that this was vital information, because the other contract “was similar in scope and almost twice the value” of the current requirement, which “overwhelmingly proves” that PM is a responsible contractor.
GAO explained that “responsibility determinations are largely committed to the contracting
officers’ discretion, and conducted on a case-by-case basis.” Additionally, GAO agreed with the VA that a decision to exercise an option on a different contract, at a different location and executed by a different CO is “entirely unrelated” and has “no bearing upon” the CO’s nonresponsibility determination at issue here.
GAO found the two procurements are “unrelated.” Additionally, since there is no evidence that the CO on the current requirement knew of the other contracting team’s decision to exercise the third option on the Louisiana contract, he could not have provided it to, or withheld it from, the SBA when he referred the matter under the COC procedures. Ultimately, GAO concluded that PM failed to show that the manner in which the VA presented information to the SBA was improper, or that the SBA’s denial of a COC to PM resulted from the VA’s failure to inform the SBA of its decision to exercise the third option on the contract.
They dismissed the protest on this basis.