Large Contractor Downgraded for Inadequate Subcontracting Plan

Many contractors, large and small, will tell you that the government is taking its small business obligations seriously these days.  The renewed emphasis on small business can be seen not only at the prime contracting level, where we are finally getting close to the 23% government-wide goal, but also at the subcontracting level.

Contracting agencies are closely scrutinizing large businesses’ subcontracting plans for small and disadvantaged businesses.  Case in point: the agency evaluation in L-3 STRATIS, B-404865 (June 8, 2011).

In the L-3 STRATIS GAO bid protest, L-3 STRATIS, a division of L-3 Services, Inc. (a large business with which many contractors are familiar), bid on an IT procurement issued by the Nuclear Regulatory Commission.  In its evaluation of L-3’s proposal, the NRC assigned L-3 a weakness for its subcontracting plan, stating that its “proposal lacked detail about what work [L-3’s] proposed small business subcontractors would be performing,” and that even after discussions, L-3 provided “no further explanation” of the work small businesses would perform or “how they will be integrated or managed into the program.”

The GAO decided that the NRC’s assignment of a weakness for this reason was appropriate, stating “without any information as to the types of services to be subcontracted, the agency reasonably concluded that it could not determine whether the protester’s small business goals were realistic.”  The GAO also rejected L-3’s other complaints about its evaluation, and denied the protest.

The L-3 STRATIS GAO bid protest decision is a good example of just how seriously many procuring agencies are taking their small business obligations these days.  If you are thinking about teaming with a large business as its subcontractor, there is nothing wrong with asking your large teammate to be very specific about what work it intends to subcontract to you.  If the large business hesitates, perhaps a (very polite) discussion of L-3 STRATIS will change its mind.

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