The Government Accountability Office (GAO) recently released two decisions supporting the challenges of solicitation restrictions on mentor-protected joint ventures. Both were first impression issues for the GAO, in which the GAO interpreted new rules related to the Small Business Administration (SBA) mentor-protege program. The decisions serve as important reminders that although the law may have changed, agencies may not implement those changes in their solicitations.
The first decision, Innovate Now, LLC, B-419546, April 26, 2021, 2021 CPD Â¶ 178, involved a solicitation provision that effectively required that the protected member of a mentor-protected joint venture individually have the same level of experience as other small business offerors. The protester argued that this requirement violated SBA regulations that:
When evaluating the capabilities, past performance, experience, business systems and certifications of an entity bidding for a Small Business Reserved or Reserved contract as a Joint Venture. . . [a] procurement activity cannot require the protected firm to individually meet the same evaluation or liability criteria as those required of other offerors in general.
Although the contracting agency argued that the experience requirements of the bidding reflected its minimum needs, the GAO found that it violated the explicit language of the SBA regulations. The SBA agreed, stating in its response to the protest that its rules mean that “proteges shall be subject to a different standard of experience than mentors and other offerors.”
The second decision, InfoPoint, LLC, B-419856, August 27, 2021, 2021 CPD Â¶ 290, involved a solicitation requirement that a joint venture competing for award must itself hold a Top Secret installation license, even if the members of the joint venture are authorized. The protester argued that this restriction violates various legal and regulatory provisions governing small business joint ventures, including the SBA regulation stating that:
A joint venture may be awarded a contract requiring installation security clearance when That is the joint venture itself Where the individual joint venture partner (s) who will perform the necessary security work have an installation security clearance.
The contracting agency argued that regulations from the US Department of Defense (DOD), which has the power to establish procedures and standards regarding security clearances, should take precedence over any regulations issued by the SBA. The GAO disagreed because the express wording of the National Defense Authorization Act for FY2020 prohibited DOD agencies from requiring small business joint ventures to have permits when all Joint venture members are permitted.
These decisions remind us to take a close look at the solicitation requirements that may limit the ability of mentor-protected JVs to compete for lay-away opportunities. Collectively, they report that GAO intends to require contracting agencies to comply with new laws and regulations designed to make it easier for participants in the SBA’s mentor-protected program to pursue set-aside contracts as a joint venture.