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Release of Statement of Work Violated SBA's 8(a) Regulations

The Court of Federal Claims granted judgment on the administrative record in favor of a service-disabled veteran-owned small business protester because the government released a statement of work to potential offerors in violation of SBA 124.503 and awarded a contract to an offeror that was not a SDVOSB. After issuing notices stating it intended to award a contract for internet and intranet services under the Small Business Administration's 8(a) Business Development Program to an "8(a) Direct (Service Disabled/Veteran Owned)" entity, the government sent a draft SOW and interview questions to 11 potential offerors by e-mail and requested presentations, resumes, and reference information. The government evaluated the presentations and advised the protester it intended to award a contract to another offeror. The protester argued the government conducted an illegal competition because it did not comply with SBA 124.503(e)(2), which allows "informal assessments of several [p]articipants' capabilities to perform a specific requirement" instead of a formal competition "so long as the [SOW] for the requirement is not released to any of the [p]articipants being assessed." The government, which had referred to the process as "market research," maintained the SOW it released was only a draft.

Protest Sustained

The court explained that under two board of contract appeals rulings (93-1 BCA 25,278, 95-2 BCA 27,732), when a SOW is provided to potential 8(a) offerors prior to review, the procurement must be competed. However, under a Government Accountability Office decision (9 CGEN 107,845), a synopsis of the contract requirement is not a SOW. Here, the document the government sent to potential offerors constituted a SOW. Factually, the work statement in the final contract did not differ in any material respect from the draft SOW. Three sections --Background, Purpose and Objective, and Scope of Work --were "virtually identical, word for word, in both documents." Five sections of the contract did not appear in the draft SOW, but those sections were "ancillary to the scope of work to be performed under the contract." Although one of the five sections was entitled "Deliverables," that section only stated a ministerial requirement. Substantively, the final contract's scope of work was divided into two tasks, and "[t]he recitation of these tasks [was] virtually identical in both the draft SOW and the contract as awarded." Since the document the government e-mailed to the potential offerors constituted a SOW, the contract award was contrary to law.

Improper Award

The award was also improper because the awardee was not a SDVOSB. In response to the government's e-mail, several potential offerors asked questions regarding the government's acquisition strategy for the procurement. The government replied SDVOSB status was a "preference" and ultimately awarded the contract to a non-SDVOSB offeror. However, the notices issued by the government unambiguously made SDVOSB status a mandatory qualification. Moreover, this qualifying requirement would have been consistent with SBA 124.503(j), which requires the procuring agency to consider a set-aside for disadvantaged firms, including SDVOSB entities, "before considering to set aside the requirement as a small business set-aside." Further, the government gave information concerning its acquisition strategy only to potential offerors that inquired about the strategy, so the protester and other SDVOSBs did not know the government would consider non-SDVOSB firms. As a result, the government's "actions with regard to the SDVO "preference" were consequently arbitrary and capricious, and prejudicial to those [potential offerors] such as [the protester] who assumed, reasonably, that there was no ambiguity as to whether SDVO was a requirement." (Infiniti Information Solutions, LLC v. U.S., FedCl, 54 CCF 79,307)




(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )


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