Protest challenging the terms of a solicitation is sustained. The solicitation required that for joint ventures, the joint venture itself must have security clearance. Individual partners having security clearance would not satisfy the requirement. GAO found that this requirement violated the Small Business Act, the 2020 NDAA, and SBA regulations. These statutes and regulations unambiguously indicate that a security clearance requirement for a joint venture is satisfied if the members of the joint venture possess the necessary clearance.
The Air Force issued a solicitation to holders of GSA’s One Acquisition Solution for Integrated Services small pool of IDIQ contracts. The solicitation sought command and control, intelligence, surveillance, and reconnaissance support services.
The solicitation required that offerors possess a top secret facility clearance. In response to questions from offerors, the Air Force advised that for joint venture offerors, the joint venture itself must satisfy the security clearance requirement. Individual partners having the security clearance would not be sufficient.
InfoPoint LLC filed a protest challenging the requirement for joint venture security clearance. InfoPoint alleged that this requirement violated the Small Business Act, the 2020 NDAA, and SBA regulations. GAO invited the SBA to respond to the protest. The SBA sided with InfoPoint.
GAO noted that the under the Small Business Act, when evaluating a joint venture of small business concerns, the agency must consider the capabilities and performance of each member of the joint venture as the capabilities and performance of the joint venture. More specifically, the 2020 NDAA provides that a clearance for access to DoD facilities may not be required for a joint venture if that joint venture is composed entirely of entities that have the requisite clearance. An SBA regulation, 13 C.F.R. § 121.103(h)(4) echoes the rule stated in the 2020 NDAA.
Based on the plain language of the provisions, GAO concluded that the DoD is prohibited from requiring a joint venture to hold a facility clearance if the members of the joint venture hold the required clearance. GAO found there was no other way to reasonably interpret the statutory language.
The Air Force attempted to argue the case was not so clear cut. First, the Air Force alleged that the 2020 NDAA did not apply because DoD had not yet issued regulations implementing the statute. GAO, however, noted that the 2020 NDAA did not direct DoD to issue regulations or otherwise implement the provisions. The Air Force had not reasonably explained why the 2020 NDAA was not effective upon enactment.
The Air Force also argued that the SBA regulation at issue, 13 C.F.R. § 121.103(h)(4), contained permissive language. The regulation states that a “joint venture may be awarded a contract” where individual partners have the necessary clearance. The Air Force argued that use of the word “may” grants agencies discretion to choose whether to require the joint venture or the individual members to have security clearance.
But GAO found that the Air Force had misread the regulation. The word “may” in the regulation referred to the eligibility of a joint venture to receive award where the members, not the joint venture, hold the required security clearances. The “may” in this case, did not grant agencies discretion to withhold awards from joint venture where the members hold the security clearance.
The Air Force contended that Congress had delegated authority to the executive branch to establish the standards for security clearance. Thus, GAO should give deference to DoD’s view concerning the solicitation’s security clearance requirements. The problem was the DoD had not issued regulations or otherwise interpreted the 2020 NDAA. Thus, there was no official DoD view to defer to. In any event, even if DoD had issued a regulation with that required joint ventures themselves to have security clearances, the regulation would have conflicted with the plain language of the 2020 NDAA.
The Air Force argued that InfoPoint’s and the SBA’s interpretation of the 2020 NDAA could create conflicts with other regulations because civilian agencies are not bound by the 2020 NDAA and thus could require a joint venture itself to hold a security clearance. GAO acknowledged that this could create practical difficulties, but this did not mean that GAO to ignore the plain language of the 2020 NDAA.
GA) recommended that the Air Force remove the requirement that the joint venture itself must hold a top secret security clearance from the solicitation.
InfoPoint is represented by Scott R. Williamson and Daniel R. Williamson of Williamson Law Group, LLC. The government is represented by Colonel Patricia S. Wiegman-Lenz, Michael J. Farr, Siobhan K. Donahue and Kevin P. Stiens of the Air Force as well as Mark R. Hagedorn of the Small Business Administration. GAO attorneys Jonathan L. Kang and John Sorrenti participated in the preparation of the decision.
