Link: GAO Decision
Protestor: Orion Technology, Inc.
Agency: Small Business Administration
Disposition: Protest Denied.
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GAO Digest:
Contracting officer reasonably declined to revisit protester’s non-responsibility following the Small Business Administration’s (SBA) refusal to issue a certificate of competency (COC) where the only new information consisted of a single unsolicited e-mail from protester’s proposed subcontractor providing blanket statements of support, without providing evidence to rebut the basis for the contracting officer’s initial non-responsibility determination, or the SBA’s refusal to issue a COC
General Counsel PC Highlight:
Orion Technology, Inc. protested the award to Katmai Information Technologies, LLC of a contract for range operations and support services at Fort Hood, Texas. The RFP was issued as a small business set-aside under the 8(a) program. Offerors were required to have an accounting system that the Defense Contract Audit Agency (DCAA) determined to be adequate for accumulating and reporting incurred costs under cost type contracts. Orion’s proposal was the highest-rated and lowest-priced proposal received. However, DCAA could not provide a positive determination regarding Orion’s accounting system, because Orion had implemented corrective action too recently to provide the necessary accounting history to determine whether it had adequately corrected previously cited deficiencies. The contracting officer determined Orion was non-responsible, and so Orion requested a certificate of competency (COC) from the SBA.
Orion argued that the agency’s non-responsibility determination as an abuse of discretion, claiming that the agency should have reversed its decision in light of an email from Orion’s subcontractor, Northrop Grumman, stating that Northrop Grumman would not let Orion fail. The GAO first noted that contracting officers may reconsider initial responsibility determinations if new information comes to light after the denial of a COC by the SBA. The GAO pointed out that the agency received the email from Northrop Grumman before the SBA denied the COC, and agreed that the email did not provide any specific evidence rebutting the findings that Orion lacked an approved accounting system or the financial capability to perform the contract.
If a small business concern is deemed non-responsible, the matter is referred to the SBA, who may issue or refuse to issue a COC as a conclusive determination of the firm’s responsibility. The agency, however, has the discretion to award the contract to a firm denied a COC. Where an offeror is facing responsibility concerns, it should provide as much additional information to the SBA and the contracting agency as possible to allow both agencies to reassess the firm’s responsibility. Favorable new information may lead the contracting agency to award the contract even where the SBA refuses to issue a COC.