A couple of weeks ago, I explored the Court of Federal Claims case of SH Synergy, LLC v. United States. In that blog, linked below, I looked at the first question raised in the protest that centered on the question of whether a mentor with two approved mentor protégé joint ventures with two different protégés under the SBA’s Mentor-Protégé Program is restricted from placing competing offers for a solicitation, in this case GSA’s Polaris solicitation. The answer to that was yes, they are restricted pursuant to 13 C.F.R. § 125.9. Because this decision was chocked full of useful information, and as promised, I’m back to look at the second issue tackled in this mammoth COFC opinion: did the solicitation’s terms, which required mentor-protégé joint ventures, woman-owned small business joint ventures, and service-disabled veteran owned small business joint ventures to be evaluated in the same manner as offerors, generally, violate procurement regulations? As you will see, the answer to that question is also yes, and it appears that this decision has already had an impact on other procurements.

The second part of this opinion looks at 13 C.F.R. § 125.8(e), which states that procuring agencies evaluating joint ventures formed as part of an SBA approved Mentor-Protégé Agreement “must consider work done and qualification held individually by each partner to the joint venture as well as any work done by the joint venture itself previously.” Further, “[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.” However, that doesn’t mean that MPJVs are not required to have the past performance, experience, business systems, and certifications necessary to perform the contract. It does mean that the joint venture, in the aggregate, must be able to demonstrate such requirements. In light of the language contained in § 125.8(e), the plaintiffs in SH Synergy claimed that parts of the solicitation violated the regulation in two ways.

First, the solicitation required that MPJVs to submit “a minimum of one Primary Relevant Experience Project or Emerging Technology Relevant Experience Project must be from the Protégé or the offering Mentor-Protégé Joint Venture.” But the plaintiffs’ didn’t take issue with the fact that the protégé in an MPJV must submit at least one relevant experience project, whether individually or through the JV itself. Rather, plaintiffs claimed that this requirement put a higher level of scrutiny on MPJVs than it did on offerors generally, because offerors that were not part of an MPJV were permitted to “obtain all Relevant Experience Projects from subcontractors,” even though protégés in an MPJV could not.

Second, the solicitation required MPJVs relevant experience projects to be evaluated “using the same evaluation criteria and points scale as projects submitted by offerors generally.”

Focusing on the first issue, COFC determined that the agency did not violate SBA regulations by requiring the protégé in an MPJV to submit an individually performed relevant experience project. Nor did it by allowing prime contractors generally to obtain their relevant experience projects from subcontractors. While the plaintiffs acknowledged that the language of § 125.8(e) required agencies to “consider the capabilities and past performance of each member of the [MPJV] as the capabilities and past performance of the joint venture,” they asserted that giving the prime contractors flexibility in choosing the projects they would submit for evaluation, including those from their subcontractors, violated SBA regulations.

However, just like there is a regulation applicable to experience requirements for MPJVs, there is also a regulation applicable to experience requirements for small business prime contractors. And that regulation, 13 C.F.R. § 125.2(g) permits small business prime contractors using a team of small business subcontractors to submit the capabilities, past performance, and experience for each first-tier subcontractor that is part of the team.

Moving on to the second issue up for discussion today, COFC considered the protesters’ claim that the solicitation violated § 125.8(e) when it applied the same evaluation criteria to assess relevant experience projects of MPJVs as it did to offerors generally. As I mentioned earlier, § 125.8(e) states that, “[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.” If you recall the discussion in my first blog post on this decision, GSA planned to “award IDIQ contracts to the highest technically rated qualifying proposals based on how well the proposals score[d] on the Solicitations’ standardized points system,” with the same point system applying to all offers.

A key issue identified by the plaintiffs was related to the primary relevant experience projects that each offeror was required to submit. This was an issue for the protégés in a MPJV because all offerors were required to submit primary relevant experience projects with the same contract value: $10M. With an even application, protégés, which are generally in the earlier stages of business growth and are often reliant on their mentor’s assistance—that is the point of the Mentor-Protégé Program, after all—are disadvantaged if they are required to submit the same size project as, say, an other than small business offeror. Therefore, because the solicitation assigned points in the same manner to all offerors, the solicitation violated § 125.8(e). And, in the end, COFC agreed, and required GSA to amend the solicitation to be in compliance with § 125.8(e).

You may be thinking, “Sure, this applies to MPJVs, but you also mentioned WOSBs and SDVOSBs. How does this apply to them?” I’m so glad you asked! While COFC did not dedicate any space within the opinion specifically to either of those categories, the plaintiffs had made the same assertions on behalf of WOSBs and SDVOSBs through 13 C.F.R. § 127.506 and 13 C.F.R. § 128.402, respectively, which contain similar language. COFC addresses these regulations in footnotes throughout the opinion, and determines that they, too, cannot be evaluated in the same manner as offerors generally, but stops short of offering any guidance on how MPJVs, WOSBJVs, and SDVOSBJVs must be evaluated in relation to each other.  

Interestingly, we have already seen an impact from this opinion on other procurements. The Transformation Twenty-One Total Technology Next Generation 2, or T4NG2 as it’s commonly referred to, has had what appear to be two amendments to its solicitation in response to the decision in SH Synergy. On May 11, 2023, the Department of Veterans Affairs amended the solicitation to change the scoring applicable to MPJVs. Then, on May 25, 2023, it issued another amendment that changed the scoring applicable to WOSBJVs and SDVOSBJVs, showing a clear desire by the VA to comply with the SBA regulations. And it is likely that this method of scoring will continue with other IDIQ awards that are evaluated in a similar fashion. I know my interest is piqued to see whether any forthcoming protests will look at the dynamic between evaluations for MPJVs, WOSBJVs, and SDVOSBJVs.

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