Pre-award protest challenging solicitation language limiting the number of experience projects that may be submitted by a mentor-protégé JV for a large business mentor firm is denied, where the agency reasonably included the limitation to ensure that small business JV members submitted projects demonstrating that they were capable of performing the work. While the relevant regulatory language requires agencies to consider the experience of individual JV firms, in addition to experience attributable to the JV itself, GAO agreed that agencies are not prohibited from requiring the small business partner to submit projects in their name or from limiting the number of projects performed by the large business mentor.
However, GAO sustained protest grounds challenging the agency’s prohibition on contractor teaming agreements comprised of a mentor-protégé JV and non-JV member subcontractors. GAO found the agency failed to show why the submission of an offer from such a CTA would increase its administrative burdens and agreed that the protester would be prejudiced by the prohibition on relying on subcontractor experience in its proposal.
Ekagra Partners LLC challenged the terms of the General Services Administration’s solicitation for the award of new contracts under its One Acquisition Solution for Integrated Services—small business pool of government-wide multiple-award indefinite-delivery, indefinite-quantity (IDIQ) contracts. Ekagra argued the solicitations restricted competition by limiting the ways in which a mentor-protégé joint venture may submit proposals.
As background, GAO noted that the evaluation scheme for the original OASIS small business pool 1 contracts required mentor-protégé joint ventures to demonstrate experience for the joint venture itself, and prohibited offerors from relying on the experience of individual members. However, Congress later amended the Small Business Act to require agencies to consider the capabilities and experience of small business joint venture members as being the experience of the JV itself.
GSA’s solicitation for on-ramping new vendors onto OASIS required offerors to demonstrate experience performing professional services as the prime contractor, both in general and for specific NAICS and product service codes, and experience managing multiple customers and/or managing in a multiple award contracting environment. Offerors that submit proposals as part of a mentor-protégé joint venture may identify projects that were performed by the individual joint venture members. However, the RFP limited the number of projects identified as being performed by a large business mentor firm.
Ekagra challenged the terms of the solicitation in this area. First, the protester argued the RFP unreasonably limits the ability of a mentor-protégé joint venture to rely on the experience of the large business mentor firm. Ekagra argued this restriction is inconsistent with statutory and regulatory language regarding mentor-protégé small business joint ventures and that GSA provided no reasonable rationale for this restriction.
According to Ekagra, the restriction hinders otherwise qualified and capable small businesses, i.e., the mentor-protégé joint ventures, from presenting their most competitive offers. Because an approved mentor-protégé JV is considered small for procurements where the protégé firms meets the size requirements, Ekagra argued GSA had no reasonable basis to distinguish between the mentor and protégé members of a joint venture for purposes of evaluating experience because the joint venture itself would be considered small.
GSA argued the evaluation criteria were reasonable because the solicitation provides for the consideration of experience by the JV and by each JV member. GSA noted that the governing regulations do not require that the experience of mentor and protégé JV members be given equal consideration.
GAO asked SBA to weigh in. SBA agreed that neither the Small Business Act nor SBA regulations address the relative consideration that an agency must give to the past performance of a large business mentor in a mentor-protégé joint venture, as compared to a small business protégé. As written, the regulations merely state the agency must give consideration to work done individually by each partner.
Next, GAO considered GSA’s rationale for the restriction. GSA explained that it chose to limit the amount of experience that can be credited to a large business mentor because doing otherwise would give such a JV a fundamentally unfair competitive advantage over small businesses that are not part of such JVs. Further, GSA noted that the small business protégé must be both majority owner and managing partner of the JV and therefore it is important to that the small business protégé is capable of performing the work.
The protester argued that GSA could consider less restrictive methods for evaluating experience. For example, because a large business mentor firm may perform up to 60 percent of the work awarded to a mentor-protégé joint venture, the agency could limit the mentor’s experience to no more than 60 percent of the overall evaluation weight. However, notwithstanding such alternatives, GAO found GSA’s approach was itself reasonable and denied these grounds of protest.
Second, the protester argued the RFP improperly prohibits JVs from forming a contractor teaming arrangement under which the offeror can rely on the experience of subcontractors that are not one of the JV members.
The solicitation allowed offerors to enter into a CTA where two firms form a joint venture or one prime contractor engages other companies to work as subcontractors. However, the RFP did not allow “hybrid” arrangements and specifically prohibited JV CTAs from submitting proposals that rely on the experience of non-JV member subcontractors.
Ekagra argued that an approved mentor-protégé JV must be considered a small business offeror, and therefore should be accorded the same ability as any other small business to form teaming arrangements with prospective subcontractors. In response, GSA interpreted the relevant FAR language on CTAs as requiring offerors to propose as either a joint venture or as a prime contractor with one or more subcontractors.
However, SBA disagreed with the agency. While SBA’s regulations do not address CTAs, they do provide that small business teaming arrangements may include an approved mentor-protégé joint venture. According to SBA regulations, when an agency receives a proposal from an offeror that has formed a small business teaming arrangement, the agency must evaluate the offer in the same manner as other offers with due consideration of the capabilities of the subcontractors. Based on its interpretation of the regulations, SBA argued that it was not permissible to restrict a small business teaming arrangement with a large business mentor from using subcontractors.
GAO agreed with Ekagra that the FAR does not expressly require offerors to elect between two forms of CTAs, nor does this term expressly prohibit a joint venture offeror from agreeing with other firms to act as subcontractors.
In the absence of statutes or regulations which specifically require or prohibit this solicitation term, GAO then considered GSA’s other rationale for this restriction. GSA argued this provision would help the agency avoid significant administrative burdens in assessing the documentation offerors were required to submit.
For a joint venture CTA, GSA explained that it must review the specific proposal submissions for each individual JV member, as it is often not possible to evaluate these items for the JV itself when the JV is unpopulated. According to the agency, requiring the technical evaluators to determine which team members are individual joint venture partners, and which ones are first tier subcontractors, and accordingly which submissions are required from the former and the latter, substantially increases the overall level of effort and burden associated with the review of each proposal.
However, GAO found this response failed to show how GSA would experience serious administrative burdens that warranted the limitation on JV offerors teaming with subcontractors. For example, GSA did not explain why it would be significantly more difficult to distinguish between the members of a joint venture and its first-tier subcontractors, as compared to a single prime contractor and its first-tier subcontractors. GAO noted the RFP required offerors to clearly identify JV members, which undermined the agency’s argument.
GAO sustained the protest on this basis and recommended that GSA reassess the rationale for this restriction. If GSA is unable to justify this provision, GAO recommended that it amend the solicitation to remove it.
Antonio R. Franco and Kathryn V. Flood of PilieroMazza PLLC. The government is represented by Stephen O’Neal, General Services Administration, and Sam Q. Le, Small Business Administration. GAO attorneys Jonathan L. Kang and Laura Eyester participated in the preparation of the decision.
