SMALL BUSINESS PLAN REJECTION IMPROPER

In a recent case, GAO decided the rejection of a contractor's small business plan was improper because the requirement for an acceptable small business plan really was a matter of the contractor's  responsibility which is to be determined from information received up to the time of award.  The Navy had rejected the contractor's offer based on the inadequacy of the plan.  GAO sustained the protest and recommended the contractor's proposal be evaluated for award and that the plan be used only to determine the contractor's responsibility.  As is always the case in a sustained protest, GAO went on to find that the contractor is entitled to the costs of pursuing the protest, including reasonable attorney fees.  See MANCON, B-405663, February 9, 2012.

MANCON argued that the small business subcontracting plan evaluation factor was pass/fail and therefore a matter of responsibility and not for evaluation of its technical acceptability.  GAO agreed.  The rule is the requirement for an acceptable plan is applicable to the "apparently successful offeror".   This rule applies even where the RFP requires submission of the plan with the offer.  Moreover, in this case, the plans were evaluated on a pass/fail basis and therefore, says GAO, "the agency's evaluation of those plans concern an offeror's responsibility."

Responsibility is to be determined based on information received by the agency up to the time award is to be made.  It is axiomatic that the contracting officer has broad discretion in determining a contractor's responsibility.  Accordingly, GAO generally will not question the determination unless it is made unreasonably.

GAO also determined that the Navy erred in its belief that further exchanges with MANCON concerning its subcontracting plan would constitute discussions requiring that discussions be opened with all offerors.  "We have found that where acceptability of a small business subcontracting plan is a responsibility issue, exchanges between the agency and an offeror concerning such plans are not discussions."  This makes sense.  And while we are at it, this rule is not rocket science.  The case illustrates the Navy contracting officer's lack of fundamental understanding of the regulations to say nothing of the failure to communicate with the contractor.

This case is just another poignant reminder to study the regulations and read the cases.  It also is another example of how protests protect the integrity of the procurement process and can cost you nothing if you are right.

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bill@spriggslawgroup.com