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Don Mansfield

AeroSage, LLC

AeroSage, LLC  

4 members have voted

  1. 1. Regarding application of the Rule of Two and the Nonmanufacturer Rule, did the GAO get it right?

    • Yes
      4
    • No
      0


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This is a remarkable case if I'm reading it correctly: AeroSage, LLC, B-416381, August 23, 2018.

DLA issued an RFP that contained ten line items, two of which were each estimated to be below $150,000. The aggregate of all 10 line items was greater than the simplified acquisition threshold (SAT). Award was to be made on a line item by line item basis. DLA issued the solicitation on an unrestricted basis based on the conclusion that two or more small businesses could not perform the entire contract and that the nonmanufacturer rule (NMR) applied (NMR does not apply below the SAT per 13 CFR 121.406(d)).

A small business concern protested that the two line items below $150,000 should have been automatically reserved per for small business per FAR 19.502-2(a) and that the NMR did not apply to those line items. GAO asked for SBA's interpretation. SBA said that, when award is to be made on a line item by line item basis, the Rule of Two analysis should be made at the line item level. Also, the NMR is to be applied at the line item level. GAO deferred to SBA's interpretation of its own rules and sustained the protest.

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I don't think this decision makes new rules for the rest of us.  Here's the key to this case:  "DLA wants to have it both ways -- i.e. it wants to look to the individual CLIN values to interpret SBA’s bundling rules, but look to the value of all the CLINs combined to interpret SBA’s nonmanufacturer rule."

If DLA had not made the argument that it did regarding bundling, I think the GAO would not have made the decision it did regarding the set-aside and non-manufacturer rule.  DLA won the bundling portion of the protest, and then the GAO turned that argument against DLA in the set-aside/NMR portion of the protest.

At least, that's how I make sense of it.  Is there now a new rule that rule-of-two and non-manufacturer rule must always apply at the CLIN level for every acquisition?  No.

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Yes, I am okay with the GAO's decision regarding set-aside and NMR in the DLA case, given DLA's argument that its bundled solicitation was not bundling.

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Reading that decision made my head hurt, and reinforces for me my belief that the socio-economic rules are the most byzantine rules of all.

Carving out special programs and special exceptions for special interests gives rise to to mind-boggling legal issues and adversarial legalism.

I'm not sure why anyone would say that GAO did not get it right. What would be the issue that they got wrong?

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