GAO: Small Business Rule of Two Must be based on Accurate Market Research

The small business rule of two requires agencies to restrict procurements for small businesses when there is a “a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in terms of fair market prices, quality, and delivery.” FAR 19.502-2. Agencies often use market research to assess whether the small business rule of two is met. But what happens when an agency amends its solicitation terms after conducting market research? Can the new terms render the agency’s market research, and therefore its set-aside decision, unreasonable? In a recent decision, GAO concluded that yes, market research may be insufficient to establish a set-aside if an agency amends the solicitation’s terms.

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GAO Reminder: Joint Ventures Must Register on SAM

SAM.gov is like the home base of federal government contracting. Everything in federal government contracting seems to either start there, or require using SAM in some fashion. As a consequence, contractors are expected to register on SAM to work in federal contracting. However, it can be easy to overlook registering a joint venture entity on SAM, when contractors making up the joint venture are already registered on SAM. GAO recently took the opportunity to remind contractors of the need to register their joint venture separately on SAM through a bid protest decision.

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Why File: A Rule of Two Protest

The Rule of Two is the federal contracting rule requiring agencies to set aside a solicitation for competition only between small businesses when there are at least two small businesses that could do the work for a fair price. But that rule does have some exceptions. These exceptions can make it difficult to know the situations that would justify filing a Rule of Two protest. Read on to find out.

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GAO: Don’t Slip Up on SAM Registration, Even for One Day

If federal contracting had a proverbial town square, it would be SAM.gov. So much federal contracting activity flows through or starts there. A large portion of SAM is contractor information. Contractors are required to be on SAM and are expected to keep their profiles on SAM updated. A “hot off the presses” GAO ruling has confirmed that the timing of SAM registration can make or break a contractor’s winning bid.

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GAO Says: SBA’s Rules for Mentor-Protégé Joint Venture Experience Evaluations May Limit Solicitation Terms

Contractors will often enter into mentor protégé relationships and joint ventures to leverage the experience and skills of multiple parties for various reasons. SBA regulations dictate how the capabilities, past performance, and experience of a mentor-protégé joint venture will be evaluated. But at the end of the day, what matters is, whether agencies will follow those regulations in their small business set-aside solicitations and evaluations thereunder. A recent GAO case addressed this issue, providing further guidance on the interplay of solicitation terms for experience evaluations and SBA’s rules for evaluating mentor-protégé joint ventures’ experience.

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Why File: A GAO Pre-Award Protest

For our third entry in our “Why File” series, we will be covering one of the two big bid protest routes, a “pre-award” Government Accountability Office (GAO) bid protest. Most contractors are fairly familiar with GAO bid protests that occur after an agency makes their award decision (more on this in a later “Why File” post). But contractors may be less familiar with pre-award bid protests at GAO. We will cover some of the most common reasons pre-award protests are filed at GAO, based primarily on contracting regulations and bid protest cases. As always, please keep in mind, despite the commonalities discussed below, the question of whether to protest is highly fact-specific and demands careful consideration.

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2023 Bid Protest Report, Success Rate Up, Total Protests Up a Little Bit

One of our favorite fall traditions is back. No, not gorging on stuffing after a turkey trot. Rather, it’s time for GAO’s annual bid protest report. This report is GAO’s summary of bid protests for the previous fiscal year. It contains some key insights for how the protest numbers have changed from prior years.

Here are some key points from this year: (1) the key effectiveness metric, showing numbers of sustains and corrective actions at GAO, was up even higher to 57% for the 2023 fiscal year and (2) total bid protest numbers are up slightly, reversing a downward trend in total protest numbers from the last few years.

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