GAO Won’t Evaluate Subcontractor’s Small Business Status

GAO ordinarily will not hear any argument that is based on a company’s small business status, even if the alleged large company is only a proposed subcontractor.

In a recent decision, GAO declined to hear a protester’s argument that the awardee’s supposedly-small subcontractors were affiliated with other entities, holding that such a determination is reserved solely for the SBA.

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GAO: On Unrestricted Solictitation, No Extra Credit For Small Business Status

An offeror on an unrestricted solicitation was not entitled to “extra credit” in the evaluation on account of its small business status.

In a recent bid protest decision, the GAO held that an agency, during its evaluation of proposals under an unrestricted solicitation, had no obligation award extra credit to the protester just because the protester was a small business.  In its decision, the GAO rejected the protester’s argument that a FAR clause establishing a policy of maximizing small business participation required the agency to give an evaluation preference to a prospective small business prime contractor.

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SBA Proposes Credit For Lower-Tier Subcontracts

Large prime contractors operating under individual subcontracting plans would receive credit for small businesses performing at any subcontracting tier, according to a proposed rule issued yesterday by the SBA.

The proposed rule also requires large primes to assign a NAICS code and size standard to “solicitations” for subcontracts–a notion that may come as a surprise to prime contractors, many of whom do not typically issue formal subcontract solicitations.

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Large Business Tossed Out For Low Subcontracting Goal

A large business was tossed out of a government competition because the company’s small business subcontracting goal was substantially below the agency’s stated goal.

In a recent bid protest decision, the GAO held that the agency acted reasonably when it rated the large business as “unacceptable” for failing to propose a sufficiently high small business subcontracting goal.

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Large Prime Hit For “Consistent Failure” To Meet Subcontracting Goals

A large prime contractor’s “consistent failure” to meet its small business and socioeconomic subcontracting goals on prior projects resulted in a lower past performance score–and led to the prime’s elimination from the competition.

In a recent bid protest decision, the GAO held that the agency properly eliminated a prospective prime contractor from the competition in part because the large business had not met its subcontracting goals on three recent contracts.

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Subcontracting Goals Missed; Incumbent’s Past Performance Score Lowered

A large incumbent contractor was properly assigned a mere “satisfactory confidence” past performance rating because the large business failed to meet its small business subcontracting goals under four of the five contracts it submitted for evaluation.

In a recent bid protest decision, the GAO upheld the agency’s assignment of a satisfactory confidence score to the large incumbent–despite the incumbent’s strong performance in many areas–because of the incumbent’s failure to satisfy its subcontracting goals.

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Subcontracting Plans: SBA Proposes Stronger Enforcement

Large businesses’ subcontracting plans would be subject to stricter compliance standards under a SBA proposed rule introduced December 29.

The intent of the new regulations is to compel prime contractors to make good faith efforts to comply with their subcontracting plans by implementing reporting mechanisms and harsher penalties for fraudulent actions or actions made in bad faith.  Small businesses subcontractors are likely to agree that these are positive changes.

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