The Small Business Act affords the Small Business Administration (SBA) authority to determine the responsibility of small business concerns. The Government Accountability Office (GAO) has held that when a procuring agency finds that a small business is not eligible for award due to being nonresponsible or for a failure to satisfy definitive responsibility criteria, the agency is required to refer the matter to the SBA for a final determination under its certificate of competency (COC) procedures. In two recent cases, GAO spoke to what qualifies as a nonresponsibility determination—in both instances, denying protests of small businesses arguing that evaluation conclusions were tantamount to a nonresponsibility determination which the agency should have referred the protester for a COC.
In A. Prentice Ray & Associates, B-419024.5, B-419024.6, December 22, 2021, APRA protested the General Services Administration’s (GSA) decision to not award it one of eight 8(a) subpool 2 contracts under the One Acquisition Solution for Integrated Services (OASIS) small business multiple award contract solution.
The solicitation provided that offerors could address systems, certification, and clearances for up to 2,000 of a potential 10,000 points. These were “not minimum or mandatory requirements” but offerors submitting the information would be “considered more favorably.”
APRA had self-scored its 8(a) subpool 2 proposal as 5,200 points. But GSA found that APRA had not substantiated 500 points for an approved purchasing system, 200 points for an approved forward pricing rate agreement (FPRA), forward pricing rate recommendation (FPRR), or provisional billing rates, and 200 points for an acceptable estimating system. As such, GSA only scored APRA as having 4,300 points, which fell below the lowest score (4,475 points) of the eight highest technically rated proposals with a fair and reasonable price.
APRA protested GSA’s purported failure to refer its subpool 2 proposal to the SBA for COC determination. Per APRA, GSA’s downgrading of its proposal on the basis of financial capability factors—i.e., deducting 900 points from APRA’s self-scoring for failing to substantiate that it had an approved purchasing system, FPRA, or an acceptable estimating system — “was tantamount to an adverse responsibility determination on an otherwise successful offeror.”
GAO denied the protest, finding that APRA’s proposal was not eliminated from consideration for award because the contracting officer made a nonresponsibility determination. The mere fact that 900 points were deducted from its score because it did not have substantiating documentation for its financial capabilities was not a responsibility issue.
As an interesting procedural aside—APRA had an earlier GAO protest that was dismissed while another protest of the same procurement was pending at COFC. Following resolution of the COFC protest, APRA filed a second protest at GAO. GAO dismissed this protest after GSA indicated that it would take corrective action in the form of referring APRA to SBA “for a possible COC determination.” GSA’s implementation of the corrective action amounted to it submitting documents to the SBA for a possible COC explaining: “The unsuccessful Offeror, APRA, has alleged that GSA should have referred their proposal to SBA for a COC determination. Accordingly, GSA is doing so now, despite the fact that GSA did not find that the Offeror was not responsible.” (SBA, unsurprisingly, did not proceed with a COC review as SBA’s regulations provide that only a contracting officer may refer a valid nonresponsibility determination for a COC.) But this led APRA to arguing that GSA failed to implement the promised corrective action. GAO moved past this issue, finding no basis to sustain because APRA’s challenge to the evaluation of its proposal had no merit.
In Monbo Group International, B-420269, B-420269.2, January 11, 2022, Monbo also protested the Army’s failure to refer it for a COC. In this lowest-priced, technically acceptable procurement, the Army had determined that the lowest-priced proposal as well as the second lowest-priced proposal (which was Monbo’s)—while technically acceptable—were unrealistically low. Monbo argued at GAO that the Army’s determination that its price was unrealistic constitutes a negative responsibility determination, which, given its small business status, had to be referred to SBA for a COC assessment.
GAO reiterated its position that, where a solicitation provides for a price realism analysis, an agency’s concerns with low pricing as a result of a realism analysis constitute an evaluated assessment of an offeror’s understanding of the solicitation’s requirements and not a determination of nonresponsibility. GAO contrasted this to where a solicitation does not contain a relevant evaluation criterion pertaining to realism or understanding and a determination that an offeror’s price on a fixed-price contract is too low generally concerns the offeror’s responsibility. As such, GAO denied this protest ground.
(This case also had a bit of a procedural twist in that the Army moved to dismiss Monbo’s COC referral challenge because there was a lower-priced technically acceptable offeror whose proposed price was also found unrealistic and this entity would be entitled to a referral to SBA under the COC procedures if GAO were to sustain Monbo’s protest. GAO rejected this dismissal argument, explaining that “given that this other offeror was not found eligible for award by the agency and it is not clear that they would be found otherwise responsible by the SBA, we see no basis to consider them an intervening offeror ‘in line for award’ ahead of Monbo.”)