A recent solicitation issued by the U.S. Navy for design-build of bachelor or enlisted quarters included Small Business Utilization as one of the evaluation factors for award. Nothing so unusual about this as most government requests for proposals (RFPs) include some sort of evaluation of each offeror?s intention to provide opportunities for small businesses to compete for its subcontracts in support of the government contract. In this RFP however, the Navy may have crossed the line of reasonableness. Let?s initially look at the requirements of the solicitation and then discuss the appropriateness of the requirements. First, the solicitation ??established subcontracting goals of at least 67.75% of the subcontracted effort to small businesses?? The predetermined goals established by the Navy also included 14.70% for Women-Owned Small Business participation, 16.51% for Small Disadvantaged Businesses, 8.5% for Hub-Zone Small Businesses, 3.0% for Veteran-Owned Small Businesses; and, 3.0% for Service Disabled Veteran Owned Small Businesses. Secondly, as part of this evaluation factor, prospective offerors were also required to provide copies or photos of awards received showing company support to HUBZone, SB, SDB, WOSB, VOSB, SDVOSB; and if applicable, Historically Black College or University/Minority Institutions (HBCU/MI). If an offeror received no such awards, it was required to specify that none were received. Thirdly, offerors, both large business and small business, were required to submit a Small Business Subcontracting Plan. Finally, the solicitation required offerors not intending to subcontract, to provide a detailed explanation why subcontracting would not result in efficient contract performance. If offerors didn?t commit to the goals established by the Navy, they were required to provide an explanation why the recommended Navy goals couldn?t be achieved. Navy Established Subcontracting Goals:As pointed out in an October 2009 article in Contract Management magazine subcontracting efforts are typically very different from one contractor to another simply because of the makeup of each company?s employee base and its internal resources. Therefore, recommended goals should never be part of a proposal evaluation factor. A 15% small business goal might be very aggressive for one company while another company would have to propose 40% for a small business goal to be as aggressive. Small Business Program Awards:A company could have an outstanding small business program and never receive an award or plaque validating its achievements. Another firm could create its own library of good deeds that make its small business program look viable and worthwhile, but the documentation might be nothing more than a ?dog and pony show?. Small Business Subcontract Plan Submission from both large and small business offerors: This requirement, for starters, contradicts the requirements of FAR 19.708 B which specifically excludes small businesses from preparing Small Business Subcontracting Plans. Why subcontracting would not result in efficient contract performance:Instead of requiring a contractor to explain why subcontracting would not result in efficient contract performance, a contractor should be expected to explain why its approach to performing the work required by the contract, including its subcontracting efforts, would result in efficient contract performance. The Small Business Utilization factor then discusses how the Navy will evaluate the responses it receives for Small Business Utilization. First, small business goals proposed by prospective offerors will be compared to the Navy recommended goals. Secondly, offerors ?will? be evaluated based on their Corporate Support initiatives for small businesses such as policies, outreach effort, in-house small business program training opportunities, mentor-prot?g? agreements, assistance programs, business development conferences, support of Community Rehabilitation Programs, and use of organizations certified under the Javits-Wagner-O-Day (JWOD) Act by AbilityOne.? The Navy?s evaluation scheme for small business utilization isn?t the best way to look at small business utilization for a best value award. As stated previously ?recommended goals? don?t take into account the makeup or internal strengths and capabilities of often very different offerors. So comparing an offeror?s small business plan goals against goals established by the Navy simply makes no sense. The second part of the evaluation of offerors small business utilization involves an evaluation of each contractor?s small business support initiatives. The evaluation of offeror ?support initiatives? outlined in the solicitation is more comprehensive than a Defense Contract Management Area audit of a Contractor?s Small Business Program using the DCMA Form 640 Defense Contract Management Agency (DCMA) Review of Contractor?s Subcontracting Program. These kinds of reviews typically don?t occur more frequently than every 3-5 years and might take 3-5 business days to complete. It therefore isn?t likely than any contractor?s small business program support initiatives would be fairly evaluated by a contracting agency not skilled in small business program reviews as part of a response to a single solicitation. Contracting Agencies are attempting to make small business utilization a viable part of each best value award decision as they should. However, contracting agencies have to become more knowledgeable about the federal government small business program. That knowledge should come from training in FAR Subpart 19.7, The Small Business Subcontracting Program, and its associated clauses such as 52.219-8, Utilization of Small Business Concerns, and FAR 52.219-9, Small Business Subcontracting Plan. Until this occurs, protests against best value award decisions will continue to increase and large businesses proposals may be unfairly evaluated.