Maximum Competition in Government Contracting to the Extent Practicable

Head Scratcher – They Thought They Could Get Away with This?

The FAR requires maximum competition in government contracting to the extent practicable. A small business from Nevada has made the Department of the Interior look foolish by challenging its attempt to hide a solicitation for quotes for diesel fuel.  In the Matter of: Bluehorse Corporation, File:  B-413533, dated October 28, 2016, the small business protester caught the Agency trying to hide the procurement of $15,000 to $25,000 of diesel fuel. The Agency placed the solicitation in a binder in a closed building on a Saturday, seeking quotations by Monday, and one of three sources solicited was a propane supplier that was unlikely to be able to submit a quotation for diesel fuel.

The Bureau of Indian Affairs (BIA) issued the solicitation on Saturday, July 30, 2016, as a request for quotations (RFQ).  The RFQ was prepared under the procedures for the streamlined acquisition of commercial items, as provided in Federal Acquisition Regulation (FAR) subpart 12.6. The RFQ stated that due to an “emergency requirement,” the deadline for receipt of quotations would be Monday, August 1, at 2:00 p.m. local time, and that a contract would be awarded “to the lowest priced offeror, who[se] quote conforming to the requirements herein, will be most advantageous to the Government, and is fair and reasonable.”  The RFQ also stated that it was set aside for Indian small business economic enterprises (ISBEE) pursuant to the Buy Indian Act.

Since the contracting officer expected the value of the contract to be around $20,000, she did not post the solicitation electronically. Instead at 11 a.m. on July 30, she sent the solicitation by separate emails to three firms that she identified as eligible Indian Economic Enterprises. She also placed a copy of the solicitation into a three-ring binder that is kept at a reception desk in the contracting office at the BIA Navajo Region Contracting Office in Gallup, New Mexico.

By the deadline on Monday, August 1, the contracting officer received quotations from two of the firms that had received the RFQ by email, and awarded a contract to the lowest-priced vendor at a price of $20,800. Bluehorse learned of the contract award from an online contracting database on August 8 and filed a protest on August 9.

Maximum Competition is a Requirement

The GAO held that when an agency is using simplified acquisition procedures, it is not required to use full and open competition to conduct the procurement, but it is required to promote maximum competition to the extent practicable.

With respect to publication of a solicitation, except where the agency uses electronic posting, the FAR requires and agency to “post, for not less than 10 days, in a public place at the contracting office . . . a notice of solicitation.”  Beyond that, when using simplified acquisition procedures, an agency must conduct the procurement consistent with a concern for fair and equitable competition.

Beyond displaying the solicitation, the FAR also describes how the statutory requirement for maximum competition practicable competition can be met, as follows:

Maximum practicable competition ordinarily can be obtained by soliciting quotations or offers from sources within the local trade area.  Unless the contract action requires synopsis pursuant to 5.101 and an exception under 5.202 is not applicable, consider solicitation of at least three sources to promote competition to the maximum competition to the extent practicable.  Whenever practicable, request quotations or offers from two sources not included in the previous solicitation.

The GAO concluded that the BIA did not conduct the procurement consistent with a concern for fair and equitable competition, and thus did not achieve maximum practicable competition.  It sustained the protest.

The full decision can be reviewed by visiting http://www.gao.gov/products/B-413533?utm_medium=email&utm_source=govdelivery#mt=e-report.

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