Programming note—I will be off next week. Meanwhile, because we're in early October and the Major League postseason has arrived, consider re-reading about Smokey Bear Baseballs? And maybe tell a friend about GovContrActually? Either way, happy fiscal year 2024!
What a week, huh? Last time I wrote, we were a few days away from the end of the fiscal year; a government shutdown seemed imminent. Today, the government is still operational, but there's no Speaker of the House? I don't know what to tell you in this world of change... Perhaps you should ground yourself in what universal constants do seem to exist? For example, don't get distracted and make sure your SAM registration doesn't lapse, I guess? Or, I suppose, don't rely on SAM to actually notify you about upcoming opportunities!
Another universal constant in federal procurement is the importance of small-business status. We've talked before about why status matters for small-business set asides, and today we're going to go a bit more into that.
Our story comes from a recent GAO decision involving a protest by Ipsos Public Affairs, LLC, of a choice by the VA to set aside a contract for "survey support services" for small businesses. That choice—to use a small business set aside—meant that Ipsos, a large multinational research firm and the incumbent for 15 years, would be ineligible to compete for the contract.
Savvy readers may know that the choice to set aside a contract for small businesses boils down to an application of the "Rule of Two" set forth in FAR 19.502. And basically, the Rule of Two means that a contracting officer will set aside a contract for small businesses if there is a "reasonable expectation" that at least two responsible small businesses will bid and that the award will reflect fair market prices.
In this case, the contracting officer did the normal thing that contracting officers do: he conducted market research using multiple methods. And based on that market research, he concluded that at least three responsible small businesses would bid the contract. Pretty standard stuff.
The story, though, is complicated by the fact that the customer here—the agency program office—"noted some concerns [to the contracting officer] about, for example, whether the small businesses would be able to meet certain experience requirements." And indeed, Ipsos argued to GAO that one of the small businesses had "a fatal lack of prior experience performing government contracts" and that another small business "was in the midst of a devastating corporate bankruptcy at the time the [contracting officer] made his determination."
Those are pretty tough facts! If I am in the program office and I have a 15-year incumbent and you're telling me that two of the three companies I am now likely going to be working with are going to be fatally inexperienced or bankrupt, I'd note some concerns for the record, too.
Still, even though these weren't great facts for the contracting officer, they ended up not being all that important in the end. Because, when reviewing a decision to set aside a contract for small businesses, GAO is very deferential to an agency's choices. As GAO puts it: "a contracting officer may set aside a solicitation even where a skeptical competitor can identify contrasting information that could arguably justify rejecting the set-aside, and holding a full and open competition instead" as long as the contracting officer exercises "business judgment about a reasonable likelihood of small business competition."
Could the contracting officer have allowed for full and open competition? Oh, sure he could. But did he have to allow for full an open competition because 2 of the 3 small businesses he relied upon were in a questionable status? Nah, he didn't. Protest denied and small-business set aside maintained.
Which brings us to the moral of the story. In government contracting—like politics— you always need to be ready to adjust. Sure, you've been winning for 15 years and your competition is broke and inexperienced. But if you rest on your laurels, you might be on the outside looking in during recompete and scrambling to find a teaming partner.
In this game, there's always something new so you need to expect and embrace change. For the love of god, though, keep your SAM registration current!