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Small Business Goaling: Army Evaluation Offers Lesson For SBA

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Koprince Law LLC

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Last month, I wrote that the SBA shouldn’t have awarded the government an “A” for its FY 2016 small business goaling achievement.  Even though the government exceeded the 23% small business goal, it missed the WOSB and HUBZone goals (the latter by a lot).

In a different context, a recent U.S. Army Corps of Engineers proposal evaluation offers a grading lesson for the SBA.  In that case, the Corps assigned a large prime offeror a middling “Acceptable” score for small business participation where the offeror proposed to meet the contract’s overall small business subcontracting goal, but not the SDB, WOSB, HUBZone, VOSB and SDVOSB goals.

The evaluation came to light in a recent GAO bid protest decision, Pond Constructors, Inc., B-414307; B-414307.2 (May 1, 2017).  The Pond Constructors protest involved a Corps solicitation for recurring maintenance and minor repair services.  The solicitation was issued on an unrestricted basis, and award was to be based on four factors: technical approach, past performance, small business participation, and price.

With respect to small business participation, the solicitation set forth various small business goals, including goals for subcontracting to SDBs, WOSBs, HUBZones, VOSBs, and SDVOSBs.  The solicitation stated that offerors would be assigned adjectival ratings of outstanding, good, acceptable, or unacceptable for the small business participation factor.

Pond Constructors, Inc. submitted a proposal.  In its proposal, Pond committed generally to subcontracting 36 percent of the work to small businesses.  However, it did not commit to meeting the goals for SDBs, WOSBs, HUBZones, VOSBs and SDVOSBs.  The Corps assigned Pond a middle-of-the-road “acceptable” score for the small business participation factor, and awarded the contract to a competitor (which scored “outstanding” for its small business participation).

Pond filed a GAO bid protest.  Among its allegations, Pond contended that the Corps should have assigned it a higher score under the small business participation factor.

The GAO noted that Pond had committed to subcontracting 36 percent of the work to small businesses.  However, “Pond’s proposal, on its face, committed to subcontract 0 (zero) percent to small disadvantaged businesses; 0 percent to WOSBs; 0 percent to HUBZone small businesses; 0 percent to VOSBs, and 0 percent to SDVOSBs.”  Accordingly, “the agency’s rating was reasonable because the protester failed to meet any of the solicitation’s small business subcategory participation goals . . ..”

The GAO denied Pond’s protest.

Pond got the adjectival equivalent of a “C,” which is about right (and perhaps even a little generous) for a company that proposed to satisfy the overall small business subcontracting goals, but not the individual socioeconomic goals.  At the national level last year, the government hit its small business target, but missed two of the four socioeconomic goals.  Maybe that deserves a B or B-minus, but in my book, it ain’t A-level achievement if you don’t hit all of the socioeconomic goals.

SBA, I hope you’re taking notes.


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