SBA regulations prohibit agencies from requiring the same past performance record from both mentor and protégé entities. The regulations explicitly prohibit this type of requirement.
In a recent GAO decision, it sustained the protest where an agency required all members in a joint venture to submit the same past experience examples in their proposal.
The GAO’s decision in Innovate Now, LLC, B-419546 (April 26, 2021), involved a protest of the terms of an RFP issued by the Air Force for engineering, professional and administrative support services.
It is important to note that this protest challenged the RFP itself, not after award. As we have discussed previously, if the challenge is to terms of the RFP, you cannot wait until award is made to protest these issues, or else GAO will say the challenge is untimely and dismiss it.
Let’s move to the merits of the decision: can an agency requiring a protégé meet the same requirements as its mentor? We have all seen instances where an entry level job requires three to five years of experience. This frustrating reality often extends into the government contracting realm, where solicitations require extensive experience, which is difficult to come by if you are not an established company.
Enter the SBA’s Mentor-Protégé Program (MPP), where smaller businesses can have an approved mentor to obtain needed experience, creating a mentor-protégé agreement (MPA). Much of the time, these MPAs create a joint venture to combine resources and experience to secure contracts and to allow the protégé can gain experience. The joint venture will then submit a proposal. One benefit of the joint venture model is to utilize the past experience of the mentor, in order for the protégé (and the joint venture) to meet solicitation requirements.
The RFP in this case required a joint venture to submit at least one example for each member meeting specific requirements. The protester argued that the RFP violated SBA regulations by improperly requiring the protégé to meet the same requirements applicable to all other offerors.
GAO focused on 13 C.F.R. § 125.8(e), taking particular interest in this 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.” GAO found, regardless of the agency explanation, that the SBA regulation was clear. GAO also took the time to point out the purpose of creating joint ventures in these scenarios is to improve the ability of protégé firms to successfully compete for federal contracts.
GAO then dug into the SBA commentary accompanying the regulations, where SBA said it was unreasonable to require a protégé concern itself to have experience on par with a large business mentor. As GAO will sometimes do, it solicited the input from the SBA directly, which responded that protégés cannot be held to the same experience requirements as mentors or other offerors.
The RFP required, “a minimum of at least one work sample must be submitted for each member of
the joint venture[.]” The key phrase GAO took issue with is “each member”–which extended requirements to the protégé. GAO found requiring each member, including protégés, to meet the same criteria was inappropriate. The agency could possibly have avoided this issue if it had just referred to the JV itself. If the agency made the experience section a blanket requirement that a JV could meet collectively, it likely would suffice at GAO.
The takeaway from this decision is: GAO agreed that protégé firms are not required to have the requisite experience in a joint venture. Carefully reviewing solicitation terms (and considering filing a protest prior to the proposal deadline) is an important consideration for overall success in the government contracting landscape.
Protégé firms can breathe a slight sigh of relief with this decision. It looks like GAO and SBA are on the same page, allowing protégés to gain experience without unnecessary barriers.
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