GAO rejects request to review HUBZone decisions

SBA and OMB contend GAO overreached its authority in ruling that HUBZone businesses have priority

The Government Accountability Office today denied Small Business Administration officials’ request to reconsider recent bid protest decisions that give some small businesses priority over others.

SBA’s request “is denied where newly raised information fails to show that our prior decision contains any errors of fact or law,” GAO’s Acting General Counsel Daniel Gordon wrote in a decision released today.

SBA and the Office of Management and Budget Director Peter Orszag contended GAO overreached its authority when it ruled that firms in historically underutilized business zones (HUBZones) should get priority over small businesses in the SBA’s 8(a) program or service-disabled, veteran-owned small businesses.

GAO’s rulings are not binding on federal agencies and are contrary to SBA regulations, Orszag wrote in a memo released to agencies July 10.

“If agencies were to follow the GAO decisions, the federal government’s efforts to procure goods and services from 8(a) small businesses and from [service-disabled, veteran-owned small businesses] through the other statutory programs may be negatively impacted,” Orszag wrote.

He also wrote that the rulings remove contracting officers' discretion to set aside a contract. Until administration attorneys finish their legal review, Orszag wrote that contracting officers should continue using SBA's view of the three types of small businesses. Federal agencies should not “prioritize HUBZone small businesses over” 8(a) or veteran-owned companies, he wrote.

The administration’s concerns come from a May 4 ruling on a protest by Mission Critical Solutions, a HUBZone company. GAO ruled that the Army made a mistake and didn’t consider whether at least two HUBZone businesses would bid on an information technology contract. Instead, the Army awarded the one-year, $3.45 million sole-source contract to Copper River Information Technology, a company owned by Alaska Natives. Law allows Alaska Native corporations to receive sole-source contracts of any size.

GAO based its decision on the Small Business Reauthorization Act of 1997. The legislation states that “a contract opportunity shall be awarded” on the basis of a set-aside competition among HUBZone companies. Meanwhile, Congress didn’t afford companies in SBA’s 8(a) program or companies owned by service-disabled veterans the same mandate. The law only says contracting officers may set aside a contract to those types of companies.

“We do not think SBA’s regulatory implementation of HUBZone and 8(a) statutes is reasonable since it fails to give effect to mandatory language of the HUBZone statute,” the decision in the Mission Critical Solutions case states.

GAO reached a similar conclusion in September 2008, when it considered a bid protest from International Program Group, another HUBZone company. The Marine Corps set aside a contract for service-disabled veterans before considering whether a HUBZone set-aside would be appropriate. GAO ruled against the Marines.

Read the story: Washingtontechnology.com News - GAO rejects request to review HUBZone decisions

Bid protests keep pace with DOD spending

The number of protests against the Defense Department's contract awards has grown at the same rate as the department’s spending has increased over the past several years, according to a recent report.

The Government Accountability Office has handled as few as 458 bid protests filed by companies against DOD’s contract awards in fiscal 2004 and as many as 540 protests in 2007, GAO reported April 14. In 2008, the protests increased to 611, a 23.9 percent jump compared with 2007, the largest margin in past four years, GAO said, adding that the greatest increase had been 17.9 percent in 2005.

GAO also said 2008’s increase comes from its expanded protest jurisdiction. The fiscal 2008 National Defense Authorization Act granted federal employees involved in a public-private competition for government work to protest a decision to outsource the work to the contractor.

Excluding protests in the expanded jurisdiction, GAO said the protest number rose to 581, or 17.8 percent, over 2007.

GAO put the increase in context of DOD’s spending. Despite the 17.8 percent jump, DOD spent 15.7 percent more money in 2008, compared with the previous year’s spending. “These similar rates of increase may suggest that the increase in protests was due in part to DOD’s increase in procurement spending,” GAO said.

GAO also said during the last two decades, the number of bid protests against both DOD's and civilian agencies' award decisions has declined. In 1989, companies filed 1,490 protests against DOD's award and 750 against civilian agencies’ decisions. In 2008, there were 611 protests against DOD's decisions and 416 against civilian agencies' decisions. The total number of protests against defense and civilian awards peaked in 1993 with 2,336 and has continued downward since, according to GAO’s figures.

Congress required GAO in the fiscal 2009 National Defense Authorization Act to assess bid protest trends; some members of Congress are concerned about frivolous protests. The House Armed Services Committee wrote that bidders seem to automatically file a bid protest if they lose a competition for a contract.

When a company files a protest, the matter goes before GAO. A group of 30 attorneys in GAO’s Office of General Counsel, who serve as hearing officers, address a company’s allegations that an agency acted contrary to procurement law or its contract solicitation.

Read the story: FCW.com News - Bid protests keep pace with DOD spending

GSA expands Alliant awards by one

One down, eight more to go — that’s the number of protests the General Services Administration faces before it can begin taking orders under the Alliant governmentwide information technology contract.

Earlier this month, Stanley Associates dropped its complaint against GSA’s decision to award 29 other vendors a place on the 10-year, $50 billion Alliant contract because GSA added Stanley to it Dec. 21.

Read the story: FCW.com News - GSA expands Alliant awards by one

Alliant protests won’t stop GSA

The General Services Administration is stuck at the starting gate with its latest major information technology contract, Alliant.

Seven companies have filed eight protests against the contract’s award, and GSA must await a Government Accountability Office decision. GAO has until early December to uphold or dismiss the protests.

In the meantime, GSA officials said, they plan to do as much as possible to prepare for launching the contract.

Read the rest of the story: FCW.com News - Alliant protests won’t stop GSA