A major tenet in government contracting is that agencies enjoy broad discretion in identifying their needs and developing the most appropriate solicitation to satisfy them. Though broad, this discretion is not unlimited. If challenged, an agency must demonstrate that its specifications are reasonably necessary to meet its needs and are not unduly restrictive of competition.
GAO recently affirmed this principle in Pitney Bowes, Inc., B-413876.2 (Feb. 13, 2017), when it sustained a protest challenging a solicitation’s requirements as being unduly restrictive of competition.
According to the GAO, a solicitation was unduly restrictive because it prohibited the consideration of the past performance of an offeror’s affiliates–even when the affiliates would contribute to performance of the contract.
The GAO’s bid protest decision in Iyabak Construction, LLC, B-409196 (Feb. 6, 2014) demonstrates that agency restrictions on the consideration of past performance must be reasonable. However, the Iyabak Construction decision should not be interpreted as standing for the principle than an agency can never exclude the past performance of an offeror’s affiliates if those affiliates will contribute to contract performance. Rather, the case suggests that it was the government’s failure to offer a good explanation–not the underlying restriction itself–that led to the “sustain” decision.
If a government solicitation contains a term that is unreasonably restrictive of competition, you may be able to successfully protest the matter to the GAO, which has sustained a number of such bid protests. The GAO’s decision in GAO Protest of Missouri Machinery & Engineering Co., B-403561 (Nov. 18, 2010) is a good example of a successful GAO bid protest based on an unreasonably restrictive solicitation term.