UpSlope Advisors, Inc. protested a decision by the United States Transportation Command (USTRANSCOM) of the award of a sole-source contract for enterprise information technology (IT) services to Eagle TG, LLC, a tribally-owned concern of New Braunfels, Texas. UpSlope argued the contract award was improper because it violated SBA’s regulations. The Government Accountability Office agreed with UpSlope and sustained the protest.
In June 2019, USTRANSCOM issued a Surface Deployment and Distribution Command Enterprise Information Technology Services Support (SEITS) request for quotations (RFQ) under the “General Services Administration’s (GSA) 8(a) Streamlined Technology Acquisition Resources for Services (STARS) II governmentwide acquisition contract (GWAC).” In September 2019, the agency issued a task order to TekSynap. CEdge Software Consultants, LLC (CEdge) filed a protest with GAO challenging the evaluation and source selection decision. USTRANSCOM took corrective action in response to the protest and GAO dismissed the protest as academic.
The agency reissued the task order to TekSynap after completing its corrective action. CEdge filed a second protest. It argued it discovered a potential violation of the Procurement Integrity Act (PIA). It notified the agency and requested an investigation by the Federal Acquisition Regulation (FAR) but the FAR found no violation. In March 2020, GAO sustained CEdge’s protest for the agency failing to demonstrate it performed the qualitative assessment of the merits of the vendors differing technical approaches to support its selection decision. In April CEdge filed a protest challenging USTRANSCOM’s decision to cancel the SEITS RFQ. In August, USTRANSCOM published a notice stating it was intended to solicit ‘SDDC Enterprise IT Services and Support for the Military Surface Deployment & Distribution Command (SDDC)’ as an 8(a) sole-source procurement. UpSlope submitted an instant protest with GAO in August. USTRANSCOM submitted an offering letter to the SBA in September offering the SEITS requirement award to Eagle, a tribally-owned concern.
UpSlope argued USTRANSCOM’s decision to award the contract to Eagle on a sole-source basis was improper due to its requirement to conduct the procurement as a competition among eligible 8(a) program participants. Because USTRANSCOM previously offered the SEITS requirement to the SBA in the SBA’s 8(a) program, it could not remove the requirement from competition and award it on a sole-source basis to a tribally-owned concern. GAO agreed with the protester.
Section 8(a) of the Small Business Act authorizes the SBA to contract with other government agencies and arrange for the performance of those contracts by awarding subcontracts to socially and economically disadvantaged small businesses. The SBA provides contracting agencies broad discretion in selecting procurements for the section 8(a) program. UpSlope alleged the agency’s decision to award the contract to Eagle on a sole-source basis violates 13 C.F.R.§ 124.506(b) of the SBA. Upslope argued the requirement was submitted to the SBA for competition with the 8(a) program and precludes the agency from awarding the contract to Eagle on a sole-source basis.
The SBA asserted USTRANCOM did nothing improper. It noted the SBA states, “a procuring agency may not remove an 8(a) procurement from competition to award it to a tribally-owned 8(a) participant on a sole source basis once such competition has been announced or initiated.” The SBA argued there is an exception to this rule. If an agency reasonably determines an award under an 8(a) solicitation is ‘no longer feasible or would no longer meet the agency’s needs’ then the agency may cancel the solicitation and re-offer the requirement on a sole-source basis to a tribally-owned 8(a) participant.
GAO disagreed with the SBA’s interpretation of 13 C.F.R.§ 124.506(b). It stated the plain language at issue does not discuss any consideration to be given to the basis that a requirement has been removed from a competitive procurement. It found the legitimacy of the agency’s rationale for cancelling the 8(a) procurement irrelevant as to whether it may award a sole-source contract to a tribally-owned 8(a) participant. It noted the SBA stated in a different protest, “the only relevant inquiry is whether the specific requirement was previously offered to and accepted by the SBA as a competitive 8(a) procurement. If done, the solicitation could not be converted to a sole-source award.
The SBA argued the agency’s needs sufficiently changed, allowing the requirement be considered ‘new’ relative to the requirement initially offered. GAO found this interpretation “reasonable.” It noted it has recognized the inquiry under 13 C.F.R.§ 124.506(b) as ‘whether the specific requirement was previously offered to and accepted by the SBA as a competitive 8(a) procurement.’ It stated that if so, the solicitation could not be converted to a sole-source award.’ It found the central question posed by the protest is whether the requirement in the SEITS RFQ is the same as the SEITS 8(a) sole source requirement offered to the SBA. It concluded the requirements are the same, and USTRANSCOM’s actions violate 13 C.F.R.§ 124.506(b).
The U.S. Government Accountability Office agreed with UpSlope Advisors contention USTRANSCOM could not award the contract based on a sole-source basis under 13 C.F.R.§ 124.506(b). It recommended USTRANSCOM not award a sole-source contract for the SEITS requirement. It recommended the agency create a new acquisition plan to procure SEITS requirements. It suggested it do so by establishing a competitive 8(a) program procurement or other procurement that does not violate SBA regulations. GAO sustained the protest. For more information on protesting contract awards, contact Whitcomb Selinsky PC.