CIO-SP4 Amendment 9, a Last Minute Stay

With less than 24 hours left until proposals were due, NIH released Amendment 9, staying the proposal deadline until August 20, 2021 at Noon Eastern. Amendment 9 says it changes very little, but the innocuous cover letter belies a major change to evaluations for Other Than Small and Emerging Large Businesses (OTSBs and ELBs).

On July 23, 2021, NIH released Amendment 8, less than a week after Amendment 7, affirming major changes to the consideration of small business subcontractors. Now, with less than a day to go, NIH has once again delayed CIO-SP4.

The Amendment 9 cover letter states it was issued in response to Amendment 3 (why this change took six amendments is not explained). Amendment 3 introduced the term “obligated value” but then did not incorporate that term into any future amendments. Therefore, in order to address this potential ambiguity, this amendment was necessary to update sections L.5.2 and L.5.7.

The Amendment 9 cover letter includes a disclaimer stating, “the changes referenced above should not be considered a complete list. Offerors are encouraged to carefully review amendment 0009 and the associated documents in their entirety.” The track changes version is your friend in reviewing these amendments. I took a look at the details and uncovered some major changes.

Major change #1. OTSBs and ELBs can now utilize FAR 9.601(2) (Prime/Sub) CTA members for Factor 1 (Health IT Capability). After stating repeatedly for multiple successive amendments that only the offeror will be considered under this factor, NIH has backpedaled. NIH makes clear this only applies to OTSBs and ELBs, which is a trend in each successive amendment.

What is unclear to me, is why such a major change was not referenced in the cover letter. What is clear, however, is that once again OTSBs and ELBs are given the ability to rely upon CTA members for factors that small businesses are not. Speaking to small business owners, the frustration is palpable, as NIH is tightening restrictions on what small businesses can use, while allowing OTSBs and ELBs more free rein.

Major change #2. Obligated values for each contract are now a consideration for the number of points allocated for past performance. NIH submitted the following note for determining how to allocate the points in Phase 1:

Note: The dollar value utilized for experience in sections L.5.2.1, L.5.2.2, and L.5.2.3 is determined by the total dollars that were obligated.

Experience examples can be either a collection of orders or one single order. If an experience example is a “collection of orders” placed under an IDIQ contract or BPA, the dollar value will be the sum of all orders based on the methods above being applied to each individual order. (If the maximum dollar value is achieved without submitting all the orders that have been awarded, then only submit those orders that achieve the maximum results for experience in L.5.2.1, L.5.2.2, and L.5.2.3).

The last sentence in parentheses allows for maximizing points, presumably by grouping and excluding orders. Frankly if the point is to group, or not group, orders based upon some chosen formula, then NIH should stick with that formula. Allowing for grouping and ungrouping orders to maximize points, defeats the purpose of the term “collection of orders.” This seemingly allows for an offeror to award extra points for the same orders, and same performance, which certainly cannot (or at least should not) be the goal.

Major change #3. The amendment also states that “Subcontracts performed in support of federal prime contracts will be considered federal experience.” Now, NIH will allow subcontracted experience on federal contracts. How will NIH evaluate this experience? I have no idea, and apparently NIH does not either. I assume they will be evaluated in the same manner as prime contractor experience, but no direction is given. What information does a subcontractor need to submit? Who knows! NIH should provide additional explanation for these sorts of changes.

Major change #4. Small businesses wishing to subcontract now must submit some form of “proof” that it will comply with the limitations on subcontracting. Section L.3.7.3 now requires small business prime contractors to show how they will comply with FAR 52.219-14. Each small business CTA must now submit, “a copy of their agreement specifying level of effort and how each will ensure compliance with 52.219-14.”

What is exceedingly frustrating, is that any work done under CIO-SP4 will come through task orders, so it’s difficult to predict the exact level of effort, which may be months or years down the line. These small businesses can likely speak in generalities, but specific work breakdowns will be mainly a guess, so this could serve mainly as a trap for those who did not notice that NIH made this change in the solicitation. Instead, this should be a matter of contract administration, not a threshold requirement. Moving this requirement to the purview of the contracting officer after award (as SBA rules already dictate) would be the right move for small businesses. Let’s hope NIH sees the error of their ways with this addition, and removes this requirement, as it adds ambiguity to what needs to be in a CTA agreement.

With each successive amendment, it seems like NIH should consider going back to the drawing board. The questions from contractors continue rolling in with each successive amendment. Stay tuned to our blog for updates, as we await potential Amendment 10.

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