Solicitation Subverted Intent of SBA’s Mentor-Protégé Regulations and Contained an Inscrutable, Undefined Requirement; Innovate Now, LLC, GAO B-419546

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Protest challenging the terms of a solicitation is sustained. The solicitation required each member of joint venture to provide a work sample that satisfied listed criteria. GAO found that this requirement violated SBA regulations that prohibit agencies from requiring a protégé firm to individually meet the same requirements as other offerors. The solicitation also required offerors to provide staffing information on prior contracts at a “single point in time.” GAO found this term unclear. The agency had not defined the time interval contemplated by the “single point in time.” Moreover, the agency had failed to provide a meaningful rationale for this requirement.

The Air Force posted a solicitation seeking engineering, professional, and administrative support services. A prospective offeror, Innovate Now, LLC, filed a protest challenging various provisions of the solicitation.

Innovate alleged that the solicitation’s requirements for small business mentor-protégé offerors violated SBA’s regulations. The solicitation stated that for a joint venture offeror, each joint venture member had to provide a work sample that, among other things, was performed for the federal government, as a prime contractor, on a non-fixed price basis. Innovate argued that this requirement violated an SBA regulation that prohibits agencies from requiring a protégé firm to individually meet the same requirements as other offerors generally.

GAO agreed with Innovate. The requirement plainly violated the SBA’s probation by requiring protégés to meet the same requirements as other offerors. It is unreasonable to require a protégé to have the same experience as other offerors. Indeed, a protégé has entered a mentor-protégé joint venture precisely because they do not have the experience to meet performance requirements itself. The whole point of the SBA’ mentor-protégé regulations is so hold protégés to a different experience standard than other offerors. The Air Force’s requirement obviated the intent of SBA’s regulations.

The Air Force attempted to argue that the requirement simply set forth its minimum needs and thus was reasonable regardless of whether a protégé could meet those standards. But GAO found this argument irrelevant; whether the Air Force’s requirements were reasonable did not address whether they should be applied to a joint venture.

The Air Force also contended that the requirement was not problematic because it intended to consider the experience of joint venture members in the aggregate. Again, GAO found this beside the point. Regardless of whether the Air Force considered experience in the aggregate, it did not eliminate the problem—i.e., that protégé firms were required to meet the same standard as other offerors.

Innovate also challenged a requirement concerning work samples offerors had to provide to demonstrate their ability to staff the contract. The solicitation required offerors to demonstrate that the “position count” on prior contracts reflected the number of personnel working on a the submitted work sample at a “single point in time.” Innovate argued that this requirement was ambiguous because it did not define what the agency meant by a “single point of time,” and there was no underlying rationale for the requirement.

Again, GAO agreed with Innovate, finding that the Air Force had offered nothing to clarify what it meant by a “single point in time.” The solicitation did not define the term, and it was not clear what interval—hours, days, weeks—constituted a single point in time.

Additionally, GAO found that the Air Force had not offered a compelling rationale for the requirement. The agency’s legal memorandum had stated that the requirement allowed the agency to assess an offeror’s ability to employ and manage multiple positions at the same time. The contracting officer had stated the requirement was necessary to ensure that offerors could hire a specific number of employees to perform requisite tasks without turnover. Nevertheless, it was not apparent to GAO how the solicited single-point-in-time information would demonstrate these capabilities.

What’s more, GAO continued, it was unlikely that the information the agency wanted was even available. Past performance questionnaires and CPARs do not typically contain information on granular moment-by-moment time intervals.

Lastly, Innovate contended that the solicitation unduly restricted competition by requiring each member of a joint venture to submit one work sample for a cost-reimbursement contract. GAO dismissed this argument as premature, reasoning that as part of the protest it was recommending that the Air Force revise the mentor-protégé requirements. The revision could render this argument academic, so GAO declined to address it at this time.

Innovate is represented by John R. Prairie, Cara L. Lasley, and Adam R. Briscoe of Wiley Rein LLP. The agency is represented by Colonel Patricia S. Wiegman-Lenz, Michael J. Farr, Captain David J. Ely, and Edward S. Fisher of the Air Force. GAO attorneys Scott H. Riback and Tania Calhoun participated in the preparation of the decision.

GAO - Innovate Now