Protest that agency and the Small Business Administration violated regulations in accepting work into SBA’s 8(a) contracting program is denied, where the agency’s two planned sole-source awards were significantly lower in value than the protester’s contract, and therefore constituted new requirements that were not subject to the requirement for an adverse impact statement, and where the agency provided SBA with enough information about the protester’s contract and the requirement for SBA to make a determination whether to accept the requirement into the program.
Performance Value Management LLC protested a decision by the Army and the Small Business Administration to place two requirements, currently performed by PVM as a single requirement under SBA’s 8(a) Business Development program, for award under the 8(a) program, to two other contractors on a sole-source basis.
PVM argued that the Army failed to comply with applicable regulations for placing “new requirements” for the two proposed sole-source contracts under the 8(a) program. Specifically, the protester argued that the Army’s offering letters failed to include an accurate acquisition history for the requirements, and the name and address of the small business that had been performing the requirement during the previous 24 months. According to the protester, without this information, SBA could not have reasonably assessed whether to accept the new requirements into the 8(a) program.
In response, the Army argued that, because the two requirements are new, it logically follows that there is no acquisition history, nor any small business contractors that performed the requirements during the previous 24 months. Under the program’s implementing regulations, SBA may not accept any procurement for award as an 8(a) contract if doing so would have an adverse impact on an individual small business, a group of small businesses in a specific geographic location, or other small business programs. However, the adverse impact concept does not apply to follow-on or renewal 8(a) acquisitions, nor to “new” requirements. The agency therefore maintained that it did not fail to meet the regulatory requirements as the protester asserts.
Alternatively, the Army noted that the offering letters provided the contract number for PVM’s incumbent contract. Further, prior to the offer and acceptance of the requirements into the 8(a) program, the Army engaged in discussions with the SBA 8(a) program office, during which the Army contracting officer provided SBA, including the individual who signed the Graham acceptance letter, with the complete history of PVM’s incumbent contract, including providing a full copy of PVM’s contract and all contract modifications.
GAO found SBA had been provided enough information to make a determination whether to accept the two new requirements into the 8(a) program. Further, because the two new contracts will be valued less than $4 million each, compared to the $21 million value of PVM’s incumbent contract, SBA considered the requirements new, as the change in value was greater than plus/minus 25 percent. GAO also noted the protester itself described the requirements as new, meaning that an adverse impact analysis was not required.
Performance Value Management LLC is represented by Fred W. Geldon, Paul R. Hurst, and Caitlin T. Conroy of Steptoe & Johnson LLP. Graham Technologies LLC is represented by Eden Brown Gaines of Brown Gaines, LLC. The government is represented by Jonathan A. Hardage, Department of the Army, and Meagan K. Guerzon, Small Business Administration. GAO attorneys Heather Weiner and Jennifer D. Westfall-McGrail participated in the preparation of the decision.
