Government Contracts Monitor

Competitive Range Exclusion of Small Business Based on Insufficient Capabilities Requires Certificate of Competency (COC) Referral to SBA

May 9, 2017

The Government Accountability Office (GAO)’s recent decision in Competitive Range Solutions, LLC, B-413104.10, Apr. 18, 2017, provides a valuable reminder that Certificate of Competency (COC) referrals to the Small Business Administration (SBA) are required in broader contexts than pure non-responsibility determinations. Specifically, SBA’s regulations provide, inter alia, that a contracting officer must refer a small business concern to SBA for COC consideration whenever the contracting officer “[r]efuses to consider a small business … for award … 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). This means that a contracting officer must refer the issue to SBA whenever the agency proposes to exclude or not further consider a small business based on a non-comparative evaluation of the firm’s capability to perform.

Competitive Range Solutions involved a solicitation (RFP) issued by the Department of Health and Human Services (HHS), National Institutes of Health (NIH), for IT solutions and services to support NIH’s existing Chief Information Officer-Solutions and Partners 3 small business (CIO-SP3 SB) 10-year government-wide acquisition contract (GWAC). The RFP envisioned award of up to 35 additional indefinite-delivery, indefinite quantity (IDIQ) contracts, with a maximum order amount of $20 Billion.

The RFP envisioned a two-phase evaluation process. During phase 1, the government would evaluate proposals based on four “Go/No-Go” requirements, including Factor 2, management approach, subfactor 1, domain-specific capability in a health-related mission. The RFP stated that under this subfactor the government would evaluate whether the offeror “demonstrates an inherent domain-specific capability in a health-related mission … through experience, examples or internal resources with substantial relevant experience.” The RFP warned that proposals failing to demonstrate domain-specific capability in a health-related mission would be deemed unacceptable, and ineligible for further award consideration.

The agency received 552 proposals, including one from Competitive Range Solutions (CRS), which was evaluated under the SDVOSB pool. The agency found CRS’s proposal unacceptable under Factor 2 because (1) CRS’s examples of providing IT services and solutions were “not sufficient to demonstrate inherent capabilities in health-related missions,” and (2) CRS “did not demonstrate that it possessed the requisite capability through ‘internal resources with substantial relevant experience.’” CRS therefore was excluded from further participation in the competition. Upon being advised of its elimination from the competition, CRS protested to GAO.

CRS argued, and GAO agreed, that CRS’s exclusion based on its failure to have sufficient capabilities in health-related missions amounted to a non-responsibility determination that should have been referred to SBA for COC consideration. The agency argued that CRS’s elimination was due to CRS being evaluated as “unacceptable” under the RFP’s management approach criteria, and thus that CRS was not “responsive” to the RFP; the decision therefore was not a determination that CRS was not capable to perform health-related missions, and thus was not a non-responsibility determination.

GAO rejected the agency’s argument. First, GAO referred to the plain language of the RFP, stating that proposals were to be evaluated on a Go/No-Go basis, i.e., a non-comparative basis, and that, if rated unacceptable under any factor, the entire proposal would be unacceptable and ineligible. Second, GAO determined that the record did not support the suggestion that CRS‘s proposal was eliminated because it was not responsive. To the contrary, GAO pointed out that the agency’s Go/No-Go Assessment explicitly tied both prongs of the agency’s exclusion determination directly to CRS’s capabilities. GAO stated that, “[c]ontrary to the agency’s arguments, … we find that the agency’s conclusion relates to CRS’s capability to perform the contract, not simply the adequacy or completeness of its proposal submission.”

GAO therefore sustained CRS’s protest, and recommended that the agency refer the matter to SBA for review. GAO also recommended reimbursement of CTS’s protest costs, including attorneys’ fees.

The bottom line is that small businesses need to consider carefully whether any rejection or elimination from a procurement, no matter how characterized by the agency, in actuality relates to a non-comparative evaluation of one or more responsibility-type evaluation factors that require the issue to be referred to SBA for COC consideration. If so, and if the agency is not willing to make such a referral, consider bringing a bid protest, as here, to force such a referral.