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Small Business (SB) and Subcontractors (SUB)


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Government provides solicitation for services.

Several small businesses respond. All but one small business states that they will subcontract their work to the maximum allowable extent. Government awards contract to the small business who does not subcontract out. Government considers the ability to accomplish work organically to be important.

Small Business who receives award states they will be subcontracting out their work.

Question. Should the small business have specified that they will be subbing their work WHEN the government did not specify that subcontracting plans are required in the solicitation? Would this answer be different if organic capabilities were expressly discussed in the evaluation criteria?

Your Thoughts?

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They're subcontracting all of the work out? I would think the Government would go after excessive pass-through charges.

As always though, really hard to say without know all the details.

ETA: If this is a small business set aside, how is their no small business plan? And is the company that won subcontracting the work to another small business?

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charles,

1. Should the small business have specified that they will be subbing their work WHEN the government did not specify that subcontracting plans are required in the solicitation?

It depends. Did the solicitation require offerors to provide such information?

2. Would this answer be different if organic capabilities were expressly discussed in the evaluation criteria?

My answer wouldn't be different. However, I don't know how the Government would make such an evaluation unless the offeror provided such information.

Question for you. In your scenario, was the percentage of work to be subcontracted a binding promise? Or was it just information the Government used to evaluate proposals?

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Guest carl r culham

Charles - Another question. Was the solicitation a small business setaside and if so was FAR Clause 52.219-14 Linitations on Subcontracting included in the solicitation/contract?

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Hello,

Its a Part 13 acquisition. And yes Limitation on Subcontracting clause was included in the RFQ via FBO. Please assume, the SB who gets the award subs to the maximum allowable extent (50%for services).

The solicitation did not clearly specify that organic capabilities are part of the eval critera. However, the governemnt did list as part of the eval criteria "ability to meet gov requirements." I really dont know what means as an eval critiera. And I have not read the SOW.

I think the issue is the winning SB submitted his quote and did not include information that the the SB will sub out. The winning proposal on its face appeared the SB would provide all services organically. All other KTRs could not provide all required services organically and responded with who they would sub out to. SB quote did not provide any indication of subing and is awarded K but this award may have went to a different KTR if Gov knew SB intended to sub. This situation seems unfair to other KTRs.

In the end i think its probably ok for the SB to sub IAW FAR. Perhaps the KO should have initiated a clarification.

I believe the award should have been canceled if the scenario was the following: KO calls SB for clarification. SB affirms that subs will not be used. SB uses subs.

As for the question Don:

"Question for you. In your scenario, was the percentage of work to be subcontracted a binding promise? Or was it just information the Government used to evaluate proposals?"

Answer: It was information the Gov used to evaluate quotes.

Thanks for the input. Any additional thoughts?

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I think the issue is the winning SB submitted his quote and did not include information that the the SB will sub out.

If that's what the CO wanted, then the CO should have asked for it. You can't fault the winning quoter for not providing information that was not requested.

The winning proposal on its face appeared the SB would provide all services organically. All other KTRs could not provide all required services organically and responded with who they would sub out to. SB quote did not provide any indication of subing and is awarded K but this award may have went to a different KTR if Gov knew SB intended to sub. This situation seems unfair to other KTRs.

It seems that the CO used unannounced evaluation criteria (% of work that will be subcontracted) to evaluate quotes and subsequently downgraded those quoters who planned to subcontract a portion of the work. If that's the case, then the CO has been unfair to those quoters. Again, CO's fault--not the winning quoter's.

In the end i think its probably ok for the SB to sub IAW FAR. Perhaps the KO should have initiated a clarification.

I think that the CO should have amended the RFQ to inform quoters of the actual basis for award.

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Did you have any kind of past performance evaluation? If so, then was your past performance evaluation based only on your evaluation of this company? What about FAR 19.6--the small business certificate of competency and determinations of responsibility? Does the contractor have the "capability, competency, capacity, credit, integrity, perseverance and limitations on subcontracting" to perform this contract?

If you haven't already, you should bring your small business specialist into the picture.

What concerns me more is your comment as follows:

I think the issue is the winning SB submitted his quote and did not include information that the the SB will sub out. The winning proposal on its face appeared the SB would provide all services organically. All other KTRs could not provide all required services organically and responded with who they would sub out to. SB quote did not provide any indication of subing and is awarded K but this award may have gone to a different KTR if Gov knew SB intended to sub. This situation seems unfair to other KTRs.

Has your source selection authority accurately and completely documented the rationale for award according to your evaluation factors? Is it clear that award was based on evaluation factors listed in the solicitation? Did your winning contractor provide the lowest quote? If not, then what evaluation factors did you use to justify award?

I DON'T WANT YOU TO ANSWER THESE QUESTIONS in this forum. I suggest you discuss them with your program attorney, because if the lack of subcontracting really was the determining factor and it WASN'T a stated evaluation factor, then you may not be able to defend your award against a challenge from an unsuccessful offeror.

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However, the governemnt did list as part of the eval criteria "ability to meet gov requirements." I really dont know what means as an eval critiera. And I have not read the SOW.

Subcontracting part of the work as opposed to doing it all internally could result in a better rating on this factor depending on what your buying.

Don's observations and K-Law Atty's advice shows there's some potential problems.

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