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Retreadfed

Did the Court blow it?

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Retread:

I assume you think that the court erred. What mistake do you think it made? Do you think that it miscalculated the percentages? If so, so what?

Judge Bush wanders all over the place, but the only real issue was whether the winner's proposal, on its face, gave the agency any reason to believe that it would not comply with the subcontracting limitation. See the court's discussion in pages 13 - 16 of Federal Circuit decisions. The GAO takes the same stance. See Dorado Services, Inc., GAO B-408075, June 14, 2013:

As a general matter, an agency's judgment as to whether a small business offeror will be able to comply with a subcontracting limitation presents a question of responsibility not subject to our review. Spectrum Sec. Servs., Inc., B–297320.2, B–297320.3, Dec. 29, 2005, 2005 CPD ¶ 227 at 6. However, where a proposal, on its face, should lead an agency to the conclusion that an offeror has not agreed to comply with the subcontracting limitation, the matter is one of the proposal's acceptability. TYBRIN Corp., B–298364.6, B–298364.7, Mar. 13, 2007, 2007 CPD ¶ 51 at 5.

The key conclusion of the court is stated on pages 17 and 18: "Tennier's proposal, on its face, would not lead the agency to conclude that Tennier would not comply with the limitations on subcontracting clause," and "The court agrees with the government that, in the circumstances of this procurement, there was no information on the face of Tennier's proposal which would have led the agency to conclude that Tennier would not comply with FAR 52.219-14."I don't see anything in the facts of the case that indicate otherwise. Thus, there was no reason for the agency to reject the proposal as unacceptable. Game over. Thus, 13 CFR 125.6 was not relevant.

Everything the court said on page 17 about about the calculation of percentages, beginning with "Second, and perhaps most importantly...." is just dicta. The clerk who wrote the decision did not know when to shut up, and the judge did not pay close enough attention to what the clerk wrote. Even if the court calculated wrongly, it had no effect on the outcome of the case, and even if the court had agreed with the protester's calculation, it would not have produced a different outcome.

I don't think the court wrote a great decision, but I don't think it blew the case. Do you disagree?

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Vern, I am not sure whether doing the correct calculations would have affected the outcome of this protest. However, it very well might have. The Court said the following in regard to why Tennier's proposal would not have lead DLA to believe that Tennier would not comply with the Limitation on Subcontracting clause:

Second, and perhaps more importantly, Excel’s calculations comparing Tennier’s labor costs and the labor costs of its subcontractors are not equivalent to the formula for determining compliance with the limitations on subcontracting clause discussed supra. As defendant notes, Excel’s calculations do not take into account profit or G & A, which are necessary cost components of the proper formula testing compliance with FAR 52.219-14. Def.’s Mot. at 16-17 (citing Mechanical Equipment and Phoenix Systems). Because Excel’s calculations supporting its allegation that Tennier would not comply with the limitations on subcontracting clause do not contain all of the necessary cost elements, the court
cannot rely on Excel’s conclusions as accurate.
Thus, if the Court had properly applied the SBA's rules, it is possible that it would have reached a different outcome.

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Did you read the regulations I cited?

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sorry, but IIRC those 2 paras were definitions, not directives.

I think you are looking for arguments among the weeds.

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Those defintions are regulatory in nature. They are to be applied in determining compliance with the so called 50% rule. If they are not to be applied in determining compliance with the 50% rule, what purpose do they serve?

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technically, you are exactly right.

but the limitations-on-subcontracting concept developed in the context of other-than-small businesses pimping small businesses to win contracts, who would then pass all the work on through to the pimp, for a "handling fee." The practice has quite a history.

If the adjudicating officer knows that history, and sees this as a case of maybe 1% one way or the other, not a pass-through, then she or he may think "why sweat the small stuff ?"

This is not a pass-through of the sort that elicited the rule. Its around the margins. And, when the work is actually done, maybe the prime ends up doing more of the work than they expected.

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Brian, I agree that large businesses using small businesses as a front to get contracts has been a long running problem. In my experience, it has especially been a problem in regard to orders under GSA Schedule contracts.

In any event, we are likely to be dealing with a new set of issues when the SBA and FAR Councils get around to implementing Section 1651 of the FY '13 NDAA since that section rewrote how to measure compliance with the 50% rule.

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oh, boy.

so, this ol' dog is gonna have to learn more new tricks ?

that thing about interesting times.

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