Small Business Prime with Large Business Team Members

[Freyr]

My CO and I have a solicitation out for a Multiple Award IDIQ for consulting services (541611), estimated at around $9M, that is a total small business set-aside. We've gotten a lot of Q&As lately asking us if they can team with large businesses for the purposes of submitting a proposal using the large business past performance, resources, capabilities, and whatnot. My understanding is that this is not permissible under a total small business set-aside because FAR 19.001 defines a concern as "Concern" includes but is not limited to an individual, partnership, corporation, joint venture, association, or cooperative. Then FAR 19.301-1(a)(i) says that the concern has to meet the size standard under the NAICS for that solicitation. Ignoring the exceptions to affiliation (like MPJVs), is my understanding wrong? Can a small business go out and find large businesses to team with, use their experience and qualifications, and submit a proposal for a total small business set-aside? 

[ji20874]

Be very careful in answering the questions from prospective offerors.  Be honest, but don't let yourself be caught in a trap by giving a wrong answer.  Do not give a free text or narrative answer; rather, your answer should simply point to the solicitation.  For example, if your solicitation includes the clause at FAR 52.219-14, Limitations on Subcontracting, you should simply point to that clause (and particularly to para. (e) of the clause).  Don't even re-state what para. (e) says, just point to para. (e) and let the offeror read it and interpret it on its own.  Your answer might be as simple as--

• "Please see para. (e) of the solicitation clause at FAR 52.219-14, Limitations on Subcontracting."

Of course, this supposes that you are aware of the clauses in your solicitation, and that you have the correct clauses in your solicitation.  For example, the clause at FAR 52.219-14 is prescribed for contracts for supplies, services, and construction when any portion of the requirement is to be set aside for small business and the contract amount is expected to exceed the simplified acquisition threshold.

Regarding offeror eligibility, let SBA own that matter.  You should not give permission to any prospective offeror to so anything.  Questions can be traps.  For example, you asked WIFCON a question about teaming and are hopeful for an answer, but you don't tell us whether you are talking JV teaming or prime/sub teaming.  Let the offerors do whatever they want to do, and let them bear the responsibility for any errors they might make.  Let them defend themselves before SBA if there is a size challenge protest -- do not let that record show your permission to break the rules.

[Don Mansfield]

13 hours ago, Freyr said:

Ignoring the exceptions to affiliation (like MPJVs), is my understanding wrong? Can a small business go out and find large businesses to team with, use their experience and qualifications, and submit a proposal for a total small business set-aside? 

It depends what the solicitation says. FAR 15.305(a)(2)(iii) says the past performance evaluation "should take into account past performance information regarding predecessor companies, key personnel who have relevant experience, or subcontractors that will perform major or critical aspects of the requirement when such information is relevant to the instant acquisition."

Some agencies will attribute a proposed subcontractor's qualifications to the offeror, some won't. Either way, the solicitation should state the agency's intention.

I think it's reasonable to attribute a proposed subcontractor's experience to the offeror if that experience was gained performing a past subcontract with the offeror. If the offeror never worked with their proposed subcontractor and was "using" their experience to win a competition, then I don't think information about the experience of the proposed subcontractor would have that much predictive value.

[Freyr]

22 hours ago, ji20874 said:

Questions can be traps.  For example, you asked WIFCON a question about teaming and are hopeful for an answer, but you don't tell us whether you are talking JV teaming or prime/sub teaming.  

As far as qualifying for a total small business set-aside, does it matter if they're a JV or a prime/sub (other than MPJV)? For some more context, a lot of the questions we've gotten have been complaints about us "allowing" MPJVs to submit proposals and requests for us to allow small businesses to form JVs and prime/sub CTAs outside of the MP program with large businesses and submit proposals which I don't believe we have the authority to do. 

[ji20874]

Freyr,

I am supposing you are in a procurement shop.  If so, is it your responsibility for deciding who qualifies to participate in your total small business set-aside procurement? Or, does this responsibility rest with the SBA? 

If that responsibility rests with the SBA, you should not involve yourself.  

If you err in "'allowing' small businesses to form JVs and prime/sub CTAs outside of the MP program with large businesses and submit proposals," may not an aggrieved offeror file a protest?  Or, if you believe someone plays who is not eligible, should not you (the contracting officer) file a protest?  Does FAR 19.302 apply?

[C Culham]

I know I am revisiting some thoughts already passed on in this thread.  My intent is to be a little more direct.

On 5/24/2022 at 7:47 AM, Freyr said:

My understanding is that this is not permissible under a total small business set-aside because FAR 19.001 defines a concern as "Concern" includes but is not limited to an individual, partnership, corporation, joint venture, association, or cooperative. Then FAR 19.301-1(a)(i) says that the concern has to meet the size standard under the NAICS for that solicitation. Ignoring the exceptions to affiliation (like MPJVs), is my understanding wrong?

Sort of.  Yes a firm has to meet the size standard but it does not prevent it from having an association with another firm, per your post a large business, as long as that association still has the firm (the offeror) meeting the rules regarding size.

 

On 5/24/2022 at 7:47 AM, Freyr said:

Can a small business go out and find large businesses to team with, use their experience and qualifications, and submit a proposal for a total small business set-aside?

Yes and as Don has already provided how the offer will be evaluated regarding the use of such associated experience and qualifications will depend on what the solicitation says.

 

2 hours ago, Freyr said:

As far as qualifying for a total small business set-aside, does it matter if they're a JV or a prime/sub (other than MPJV)?

Yes it will matter.  It will matter to the firm as they must consider whether they can certify that they are a small business in consideration of  an association with a large business per a JV, prime/sub, CTA.   It will matter to you (the agency) as you must review the association to determine if such association raises a question of size along with responsibility.   I mention responsibility as a matter of limitation in subcontracting is a matter of responsibility if  the limitation issue is the sole concern say in a prime/sub relationship.   Here I might add that even if a JV, the entities of the JV must be looked at as to what they bring to the table in the JV offer.  (13 CFR 125.8).   

2 hours ago, Freyr said:

complaints about us "allowing" MPJVs to submit proposals and requests for us to allow small businesses to form JVs and prime/sub CTAs outside of the MP program with large businesses and submit proposals which I don't believe we have the authority to do. 

Remember size and responsibility are determined at receipt of an offer.    So in a sense you have the authority to allow but only after receipt of offers and based on your review regarding the certification as to size but not prior to.   A determination of a JV being eligible to submit on small business set-asides can be determined by the SBA, not by the agency, prior to the JV submitting on a solicitation (13 CFR 125.9).    Remember the general rule anybody can submit an offer but whether that offeror is responsive and responsible is determined at time of receipt of offers (unless you have established a qualified bidders list - FAR 9.2).

The advice provided in this thread is sound but it has beat around the bush and left some gaps.   Let offerors submit their proposals.  If they ask questions about who is allowed or not tell them anyone is allowed to offer but an offeror and its offer will be scrutinized after receipt to determine if the offer  responsive, the offeror is responsible, is a small business as determined by an associations if any are offered and those that are responsive and responsible will be considered for award which will be based the agency's evaluation determination of who will provide the best value for the government pursuant to the provisions of the solicitation.