Small Business Set-Asides Not Required Under NETCENTS-2, Says GAO

The Air Force’s large NETCENTS-2 IDIQ vehicle did not require orders to be set-aside under the small business pool, except for orders valued between the micro-purchase threshold and simplified acquisition threshold.

In a recent decision, the GAO held that although the NETCENTS-2 contract in question says that Contracting Officers “should” perform a “rule of two” small business set-aside analysis for orders valued over the simplified acquisition threshold, it does not require that such an analysis be performed–meaning that Contracting Officers can validly award such orders to large businesses, even if two or more small business NETCENTS-2 holders exist.

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Federal Circuit Affirms Sole-Source Justification

Not too many government contracting disputes make it to a federal court of appeals—the level just a step below the U.S. Supreme Court. The most notable recent examples would probably be the Federal Circuit’s decision in Kingdomware Technologies (which, as SmallGovCon readers know, was ultimately overturned by the Supreme Court in 2016) and the D.C. Circuit’s decision Rothe Development (which the Supreme Court declined to consider).

But recently, the Federal Circuit issued a decision of note to government contractors. In AgustaWestland North America v. United States, the Court issued guidance on what constitutes a “procurement decision” and upheld the Army’s decision to buy helicopters on a sole-source basis.

Let’s take a look.

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8(a) Sole Source Decision: “Bad Faith” Bid Protest An Uphill Battle

An agency’s decision to award a contract as an 8(a) sole source is a “business decision” for which the agency has broad discretion–and a potential protester challenging the agency’s use of that discretion will have an uphill battle.

In a recent bid protest decision, the GAO confirmed that government officials are presumed to act in good faith, and that the presumption extends to the decision to award an 8(a) sole source contract instead of competing the work in question.

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GAO: Agency’s Order Exceeded BPA Scope

An agency’s attempt to order under a Federal Supply Schedule blanket purchase agreement was improper because the order exceeded the scope of the underlying BPA.

In a recent bid protest decision, GAO held that the agency had erred by attempting to issue a sole-source delivery order for cloud-based email service when the underlying BPA did not envision cloud services.

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GAO: Out-Of-Scope Delivery Order Modification Was Improper

An agency may not procure new services under an existing GSA Schedule delivery order if the new services exceed scope of the original delivery order.

In a recent decision, Onix Networking Corp., B-411841 (Nov. 9, 2015), the GAO sustained a protest where the agency acquired a new type of software by modifying an existing delivery order for software license extensions because the acquisition exceeded the scope of the initial delivery order. According to the GAO, the out-of-scope modification amounted to an improper sole source contract.

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WOSB Program: House-Passed 2015 NDAA Allows Sole Source Contracts

Women-owned small businesses could receive sole source contracts under the National Defense Authorization Act of 2015, which was passed by the House of Representatives last week.

The House-passed 2015 NDAA includes an amendment authorizing economically disadvantaged women-owned small businesses to receive sole source contracts of up to $6.5 million for manufacturing, and up to $4 million for other industries.  For WOSBs that are not economically disadvantaged, sole source contracts would be available, with the same thresholds, in industries where WOSBs are considered substantially underrepresented.

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GAO: USDA Improperly Awarded $141 Million Sole Source Contract

The U.S. Department of Agriculture improperly awarded a $141 million sole source contract in exchange for the contractor’s agreement to withdraw a GAO bid protest.

According to a recent GAO bid protest decision, the award violated the Competition in Contracting Act, which does not permit an agency to award a sole source contract in exchange for a contractor’s promise to terminate litigation against the agency.

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