GAO Finds CIO-SP4 Unduly Restrictive; Recommends Amendment

For practically the entire summer of 2021, we observed (and commented on) NIH’s numerous amendments to its long-awaited CIO-SP4 solicitation after it was finally issued in May 2021. By the time the deadline for proposals finally came, it had been amended eleven (!) times. Even with all those amendments, however, it appears that at least one offeror still had serious concerns about the final version. As it turns out, at least some of their concerns were warranted, per GAO, and has recommended the agency to amend the solicitation or revise its evaluation criteria.

Computer World Services Corporation (CWS) filed a protest regarding CIO-SP4 arguing that the solicitation’s self-scoring evaluation is unduly restrictive concerning offerors who compete as a mentor-protégé joint venture where the mentor is a large business, among other contentions. Specifically, CWS noted the solicitation limited such joint ventures to using the experience of the large business mentor for no more than two of the three possible experience examples for each area of experience.

When a protestor claims a provision is unduly restrictive of competition, the agency needs to show why “the provision is reasonably necessary to meet the agency’s needs,” GAO noted, “to ensure that it is rational and can withstand logical scrutiny.” Because NIH failed to provide a reasonable rationale for the limitation on using large business mentor experience, GAO agreed with CWS.

GAO then explained its reasoning. “SBA’s small business mentor-protégé program allows small or large business firms to serve as mentors to small business protégé firms in order to provide ‘business development assistance’ to the protégé firms and to ‘improve the protégé firms’ ability to successfully compete for federal contracts.’” 13 C.F.R. § 125.9. After going through the various experience example requirements of CIO-SP4, GAO looked at 13 C.F.R. § 125.8(e), which prohibits agencies from requiring “the protégé firm to individually meet the same evaluation or responsibility criteria as that required of other offerors generally.”

In a similar case, Ekagra Partners, LLC, B‑408685.18, the RFP stated that the large business mentor could only submit one of two required examples for one experience category and two of three required examples for the other category, meaning the protégé had to submit at least one example in each category. However, the requirement “did not specify the relative amount of experience that the mentor and protégé were required to admit.” Therefore, GAO determined it did not violate 13 C.F.R. § 125.8. Still, GAO could have found that the requirement unreasonable. However, GAO “concluded that the agency reasonably explained that the limitation was needed to ensure that the protégé demonstrated its ability to perform the solicitation requirements.”

Turning back to the CWS matter, GAO considered the changes to 13 C.F.R. § 125.8(e) since the Ekagra decision. Those changes added the language “A procuring activity may not require the protégé firm to individually meet the same evaluation or responsibility criteria as that required of other offerors generally.  The partners to the joint venture in the aggregate must demonstrate the past performance, experience, business systems and certifications necessary to perform the contract.” GAO decided that this did not change its reasoning since Ekagra, because the issue in this case is the relative consideration to be given to mentor and protégé members of a joint venture as opposed to the difference in requirements for the protégé versus other offerors. Yes, 13 C.F.R. § 125.8(e) means you can’t require a protégé to meet the same requirements of offerors who submit on their own or outside of a mentor-protégé agreement. But it says nothing about the balance of experience between the mentor and the protégé in the joint venture itself.

However, GAO found one key difference between Ekagra and CWS’s protest. In Ekagra, the solicitation was found reasonable as the agency reasonably argued that limiting the amount of experience a large business mentor could use ensures the agency will be able to meaningfully consider the protégé’s experience. The protégé was required in Ekagra to submit at least one example for each of the two evaluation factors.

For the CIO-SP4 solicitation, there were ten task areas. For each task area, the offeror must provide corporate experience examples relevant to those task areas. For all the task areas combined, the offeror must provide a minimum of three corporate task examples. The corporate experience example could be reused in multiple task areas for corporate experience, save for the minimum one required example for task area. No other task areas had a minimum. For leading edge technology experience and federal multiple award experience, offerors could submit up to three examples for each, with no minimum provided.

This is confusing when looked at all together, but the key thing is this: the limit on the mentor’s experience submissions was on a per task area basis, not an overall basis. In other words, although three examples were required for corporate experience, that was for the entire corporate experience section, which had 10 different task areas. Only one experience was required per task area, but the mentor could submit up to two examples per task area. As such, the mentor could submit two examples for each task area, which means the mentor-protégé joint venture could submit 20 examples all from the mentor and still comply with the solicitation! As for the leading-edge technology and federal multiple award criteria, the issue is that while the mentor could only provide two examples, there was no minimum to the number of examples the joint venture had to submit, only a maximum of three.

This results in a situation where the mentor is limited from providing a certain number of examples, but the protégé is not actually required to provide examples of its own. If the mentor that provided all 30 examples, three per task area, for corporate experience, the joint venture would violate the solicitation. But if it only submitted two per task area, resulting in a total of 20, even though the protégé still submits no examples, it would meet the requirements of the solicitation! So, the argument that the limitation made the protégé have to submit examples was simply not true and produces a result where a mentor-protégé joint venture that submitted 30 mentor examples and no protégé examples is rejected, but one that submits 20 mentor examples and no protégé examples gets evaluated.

Whew! We know this is a bit confusing, but, basically, the way things shook out numerically, in Ekagra, the protégé would have to submit at least some example for each factor in order for the proposal to be acceptable, meaning the agency had a reasonable argument that the limitation would force the protégé to show at least some experience. In this case, the way things shook out, a protégé could submit nothing and still the joint venture’s proposal could be acceptable. This made the limitation on how many submissions the mentor could make completely pointless; it doesn’t actually require the protégé to show anything.

As a result, the GAO sustained the protest, and has now recommended NIH go back and fix this issue. It is likely, then, that offerors will get another shot at this troublesome procurement.

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