Good news for contractors: the GAO has ruled that an agency evaluation cannot be based on unimportant or meaningless distinctions, in which the agency appears to care more about the form of an offeror’s proposal than its substance. In Engineering Management & Integration, Inc., B-400356.4 (May 21, 2009), the GAO sustained a protest of a Department of Education contract award, holding that the agency improperly elevated form over substance in its evaluation.
GAO: Agencies May Request Size Recertification on Long-Term IDIQs
Ordinarily, a business is “small” for purposes of a set-aside government contract if it falls below the applicable size standard (determined by NAICS code) on the date of its initial offer. The same policy holds true on long-term indefinite delivery/indefinite quantity contracts: if a business is small for the initial IDIQ award, it is small for subsequent task orders—unless the procuring agency asks for recertification, and the contractor has grown in the interim.
SBA Affiliation Rules and Unanimity Provisions: Some SBA OHA Guidance
A company’s minority owners often insist that certain actions be approved unanimously or on a supermajority basis, giving the minority owner the ability to control (or at least veto) those actions.
But small government contractors must tread very carefully when it comes to unanimity or supermajority provisions in their bylaws, operating agreements, or other governing documents. Although the SBA permits unanimity or supermajority provisions regarding certain “extraordinary” corporate actions, other unanimity or supermajority provisions may result in a finding that the minority owner exercises undue negative control over the company, leading to affiliation problems with other companies controlled by that minority owner.
The decision of the SBA’s Office of Hearings and Appeals in Size Appeal of DHS Systems, Inc., SBA No. SIZ-5211 (2011) offers some guidance as to which provisions pass muster under the SBA affiliation rules, and which do not.
GAO: Post-Award Modifications Unfair; Protest Sustained
An agency cannot make material changes to a solicitation after selecting a contractor for award without going back and giving all offerors the opportunity to compete on the revised solicitation. In Diebold, Inc., B-404823 (June 2, 2011), the GAO sustained a bid protest because the agency failed to allow the protester to compete on the revised solicitation.
GAO: SDVOSBs Preferred Over Veteran-Owned Businesses for VA Procurements
Unlike most agencies, the Department of Veterans Affairs offers contracting preferences for businesses owned by veterans who are not service-disabled. However, as the GAO confirmed in Buy Rite Transport, B-403729, B-403768 (Oct. 15, 2010), even at the VA, service-disabled veteran-owned small businesses are preferred over veteran-owned small businesses.
SDVOSB Eligibility: Veteran “Controls” Company Despite Living 900 Miles From Headquarters
A service-disabled veteran “controlled” his company within the meaning of the SBA’s service-disabled veteran-owned small business regulations, despite living more than 900 miles from the company’s headquarters, according to a SDVOSB appeal decision of the SBA’s Office of Hearings and Appeals.
In SDVOSB Appeal of Command Languages, Inc., SBA No. VET-149 (2009), the SDVOSB performed contracts around the world, leading SBA OHA to conclude that the service-disabled veteran’s physical location was largely irrelevant to his ability to control his company.
GAO Sustains Another “Unreasonably Restrictive Solicitation” Bid Protest
If a government solicitation contains a term that is unreasonably restrictive of competition, you may be able to successfully protest the matter to the GAO, which has sustained a number of such bid protests. The GAO’s decision in Missouri Machinery & Engineering Co., B-403561 (Nov. 18, 2010) is a good example of a successful GAO bid protest based on an unreasonably restrictive solicitation term.