The agency rejected the protester’s proposal finding that it failed to meet the 30% small business participation requirement. The protester contended that the agency wrongfully calculated its subcontractor participation rate. Even though the protester was a subsidiary, it was an interested party as a proposal submitter with an economic interest in the contract. However, its proposal was vague. GAO found that the agency reasonably determined that the proposal failed to meet the required small business participation rate.
Network and Simulation Technologies, Inc., GAO, B-423503; B-423503.3
- Background – The Navy issued a request for proposals (RFP) for information technology support services at the Naval Undersea Warfare Center. The protester submitted a proposal that failed because the agency determined it did not meet the 30% small business participation requirement. The protester argued that the agency miscalculated the participation rate and sought to contest their exclusion from the award process.
- Interested Party Status – The agency contended that the protester did not have standing because it was a subsidiary of another firm, which held the relevant contract. The agency argued that the protester lacked privity with the government. GAO disagreed. It determined that the protester qualified as an interested party due to its status as a proposal submitter and its potential economic interest in the contract. This aligned with GAO’s previous caselaw regarding affiliate participation in contract proposals. Entities may maintain interest even when they are subsidiaries of a larger firm.
- Small Business Participation Calculation – The protester argued that the agency’s evaluation of its small business participation was flawed. It claimed that the agency erroneously interpreted the surge hours as being performed solely by the protester. The protester insisted that its proposal guaranteed at least 30% of surge work would be allocated to small businesses. GAO found that the agency’s interpretation was justifiable. Inconsistencies within the protester’s proposal led to confusion over the actual allocation of surge hours. GAO ultimately agreed with the agency that the protester’s proposal was vague.
The protester is represented by Ryan C. Bradel, Esq., Aaron Jackson, Esq., P. Tyson Marx, Esq., and Nicholas L. Perry, Esq., Ward & Berry, PLLC. The awardee is represented by Christopher Lybeck, Esq., Laura A. Whitten, Esq., and Trent Bowen, Esq., of the Department of the Navy. GAO attorneys Michael Willems, Esq., Michael P. Grogan, Esq., and Evan D. Wesser, Esq., participated in the decision.
