Solicitation Omits NAICS Code and Size Standard–But Agency Still Rejects Large Business’s Bid

An offeror’s bid was rejected because the offeror wasn’t a small business–even though the solicitation didn’t contain a NAICS code or corresponding size standard.

It sounds like a successful bid protest waiting to happen, but GAO didn’t see it that way. Instead, GAO dismissed the protest because the offeror should have protested the defective solicitation terms before it submitted its bid, instead of waiting to see how the competition played out.

GAO’s decision in M R Pittman Group, LLC, B-419569 (May 5, 2021) involved an Army Invitation for Bids seeking a contractor to inspect, remove and repair pump units for the Wilkinson Canal Pump Station in Louisiana.

The IFB incorporated FAR clause 52.219-6 (Notice of Total Small Business Set-Aside), as well as FAR 52.219-14 (Limitations on Subcontracting). However, the IFB did not identify the applicable NAICS code or corresponding size standard. FAR 19.501(e) requires this information to be included in any set-aside solicitation.

M R Pittman submitted the lowest bid. Subsequently, though, the Army notified Pittman that it was ineligible for award because it was not a small business under NAICS Code 811310 (Commercial and Industrial Machinery and Equipment), with a corresponding $8 million size standard.

Pittman filed a bid protest with GAO. Pittman argued that because the agency failed to include a NAICS code and size standard, the solicitation could not be treated as a set-aside.

Pittman’s argument has some logical appeal. After all, how could an offeror be deemed “other than small” without a size standard to compare itself to?

But GAO had other ideas.

GAO wrote that its Bid Protest Regulations “contain strict rules for the timely submission of protests.” Under these strict timeliness rules, a protest based upon alleged improprieties in a solicitation that are are apparent prior to the closing time for the receipt of bids (or proposals) must be filed before that time. When an apparent, or “patent” ambiguity exists “but is not challenged prior to the bid submission deadline, we will not consider subsequent untimely arguments asserting the protester’s own interpretation of the ambiguous provision.”

In this case, GAO noted, the IFB “included FAR clauses 52.219-6 ad FAR 52.219-14, both of which mark the IFB as a set-aside for small business concerns. GAO continued:

While the protester correctly argues that the IFB failed to include the applicable NAICS code and corresponding size standard required by the FAR for a set-aside, this discrepancy underscores the ambiguity that was evident on the face of the solicitation. Thus, on this record, we find that the protester failed to timely challenge a patent ambiguity with the IFB’s terms, therefore, we dismiss the protest

It was a tough result for Pittman, but a correct application of GAO’s strict timeliness rules. A solicitation containing the set-aside clauses but omitting a NAICS code and size standard is defective on its face, and under those strict GAO timeliness rules, an offeror faced with an obviously defective solicitation must challenge the defect before proposals are due–“speak now, or forever hold your peace.”

In a case like this (and many other similar cases), it is very unlikely that a protest would have been necessary to resolve the issue at the appropriate time. Had Pittman brought the matter to the agency’s attention informally before the bid date, the agency undoubtedly would have corrected the defect. And while Pittman might not have been happy with the result of that correction, Pittman then could have looked for a small business teaming partner–or at least avoided the time and expense of preparing a noncompliant proposal.

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