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A Little-Known Way The SBA Can Help a Small Business Win a Contract

On Behalf of | Sep 15, 2017 | Business Litigation, Government Contracts

A government contractor can lose a contract generally in two ways. First, the government can find the offer to be not responsive or acceptable. Second, the government could find the offer acceptable but the offeror not responsible.

Many small businesses know that the SBA can help if an agency denies a small business a contract on the basis that the small business is not a responsible offeror. The “help” is the COC process. If the contracting officer refuses to award a contract to a small business on the grounds that the small business is not responsible, the contracting officer doesn’t have the final say in the matter. The SBA does. If the contracting officer finds a small business not responsible, the contracting officer must refer the issue to the SBA. Whatever decision the SBA makes is binding on the contracting officer.

What many small businesses do not know is that the COC process can help a small business if its offer is found non-responsive or not acceptable. Let’s take a good look at this possibility. Doing so requires a shift of our focus from the small business OFFEROR and whether the agency finds it responsible to the small business’s OFFER and whether the agency finds it responsive or acceptable.

SBA regulations require a contracting officer to use the COC process not only when the contracting officer finds a small business to be non-responsible. They also require the COC process when a contracting officer “Refuses to consider a small business concern for award of a contract or order after evaluating the concern’s offer on a non-comparative basis (e.g., a pass/fail, go/no go, or acceptable/unacceptable) under one or more responsibility type evaluation factors (such as experience of the company or key personnel or past performance).” 13 C.F.R. § 125.5(a)(2)(ii).

A good example of when the contracting officer should have used the COC process involved a solicitation process for IT services that evaluated offerors in Phase I on whether they had previously showed IT capability in a “health-related mission” like health-related/biomedical research and health science, clinical analytics and intelligence, and health policy.” This evaluation factor was a “responsibility type evaluation factor” within the meaning of the SBA regulation.

In addition, lack of this capability would disqualify them from Phase II and possibly winning the contract so the agency was using a “pass/fail” non-comparative evaluation basis within the meaning of the SBA regulation.

One contractor was found ineligible for Phase II because the agency found that the examples it gave the agency all involved provision of IT services and solutions which the agency found not sufficient to demonstrate inherent capabilities in health-related missions. In addition, the agency did not refer the issue to the SBA.

After protesting to GAO, the contractor won. The agency should have referred the small business to the SBA because, according to GAO, the agency’s conclusion “relates to CRS’s capability to perform the contract, not simply the adequacy or completeness of its proposal submission.”  Competitive Range Sols., LLC, B-413104.10, Apr. 18, 2017. The agency had failed to comply with 13 C.F.R. § 125.5(a)(2)(ii).

However, a small business cannot take advantage of this regulation unless it has provided sufficient documentation relating to the responsibility type factor. A small business lost a contract because it failed to provide documentation required by the solicitation that its solution had been rated to operate at a secret classification level. It protested to GAO, arguing that the government had found the offeror to be non-responsible and therefore should have referred the issue to the SBA’s COC process.

GAO disagreed: “where an agency rejects a proposal as technically unacceptable on the basis of a factor that is arguably responsibility related, but the finding of unacceptability is based on the offeror’s failure to submit specific documentation required by the solicitation, referral to the SBA is not required.”  Sea Box, Inc., B-414742, Sept. 6, 2017.

Although the SBA’s COC process was not available to this small business, it makes sense for any small business to be alert to situations when it is available: when it is eliminated from the competition because agency evaluated the small business’s offer (1) on a non-comparative basis (e.g., a pass/fail, go/no go) (2) using responsibility type evaluation factors such as experience of the company or key personnel or past performance.

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Terry O’Connor is a Partner at Berenzweig Leonard, LLPHe and Stephanie Wilson lead the firm’s Government Contracts practice. Terry can be reached at [email protected].