Author Archives: Steven Koprince

Nice Affiliate You’ve Got There–But So What?

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Small contractors often rely upon the experience of corporate parents, subsidiaries, and other affiliates to bolster their past performance scores.  Especially for new subsidiaries and joint ventures with minimal independent past performance, relying on corporate experience can help avoid a “neutral” past performance rating.

However, as two GAO cases show, it isn’t enough to simply identify an affiliate and rely on its experience.  In order to receive credit, an offeror must identify the affiliate’s connection to the contract contemplated by the solicitation.   Otherwise, you’ll leave the contracting officer scratching his or her head, and saying, “so what?”

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Above, Beyond, and Then Some: Proposal Disqualified for “Excessive” Extras

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Like Pavlov’s famous dogs,  government contractors are almost conditioned to offer the government more than the minimum requirements.  Think back to your own proposals—how many times have you offered the government a steeper discount, a more qualified person, or a superior technical solution than what was required?  It happens all the time–and often, the government seems to expect it.

Going above and beyond the minimum is usually a good thing, but, as the GAO’s decision in D’Andre Insurance Services, LLC, B-405046 (July 21, 2011) demonstrates, it is possible to go too far, and give the agency concerns about your understanding of the technical requirements.

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Is It Time To Rethink The GAO’s Prejudice Requirement?

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Under the GAO’s bid protest regulations, only an “interested party” may file a bid protest.  Over the years, GAO case law has established that a protester is not an “interested party” if the protester would not have had a reasonable chance of receiving award, but for the agency’s actions.

Under most circumstances, the “no harm no foul” prejudice rule makes sense.  After all, if a protester scored lower than the awardee on, say, all five technical factors, and had a higher price, should the agency really have to start from scratch if it made a minor error?  The rule generally helps weed out frivolous protests and keep the competitive procurement system functioning smoothly.  But occasionally the rule can lead to seemingly unfair and anticompetitive results, as happened in Gas Turbine Engines, Inc., B-401868.2 (Dec. 14, 2009).

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GAO: HUBZone Price Preference Not Optional

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When a contract contains FAR 52.219-4, the so-called “HUBZone price preference” clause, a procuring agency must apply the HUBZone price preference by adding a factor of 10 percent to the price of all other offerors, except HUBZone firms and otherwise successful small businesses.

For procuring agencies, applying the HUBZone price preference is not optional.  In Explo Systems, Inc., B-404952 (July 8, 2011), the GAO sustained a bid protest because the procuring agency failed to apply the HUBZone price preference.

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A Victory for Common Sense: GAO Refuses to Allow Agency To Elevate Form Over Substance

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Good news for contractors: the GAO has ruled that an agency evaluation cannot be based on unimportant or meaningless distinctions, in which the agency appears to care more about the form of an offeror’s proposal than its substance.  In Engineering Management & Integration, Inc., B-400356.4 (May 21, 2009), the GAO sustained a protest of a Department of Education contract award, holding that the agency improperly elevated form over substance in its evaluation.

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GAO: Agencies May Request Size Recertification on Long-Term IDIQs

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Ordinarily, a business is “small” for purposes of a set-aside government contract if it falls below the applicable size standard (determined by NAICS code) on the date of its initial offer.  The same policy holds true on long-term indefinite delivery/indefinite quantity contracts: if a business is small for the initial IDIQ award, it is small for subsequent task orders—unless the procuring agency asks for recertification, and the contractor has grown in the interim.

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SBA Affiliation Rules and Unanimity Provisions: Some SBA OHA Guidance

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A company’s minority owners often insist that certain  actions be approved unanimously or on a supermajority basis, giving the minority owner the ability to control (or at least veto) those actions.

But small government contractors must tread very carefully when it comes to unanimity or supermajority provisions in their bylaws, operating agreements, or other governing documents.  Although the SBA permits unanimity or supermajority provisions regarding certain “extraordinary” corporate actions, other unanimity or supermajority provisions may result in a finding that the minority owner exercises undue negative control over the company, leading to affiliation problems with other companies controlled by that minority owner.

The decision of the SBA’s Office of Hearings and Appeals in Size Appeal of DHS Systems, Inc., SBA No. SIZ-5211 (2011) offers some guidance as to which provisions pass muster under the SBA affiliation rules, and which do not.

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