What options does a Contractor have to prevent a Contracting Officer from assigning an inappropriate NAICS code to a solicitation for a task order under an MA-IDIQ?

[BlaineTheMono]

Background: If you are familiar with GSA’s OASIS, then you know that it is a “family of MA-IDIQ contracts” referred to as “pools”, which each Pool consisting of one or more NAICS codes. While the NAICS codes under each Pool have the same business size standard, each Pool has its own size standard ranging from $16.5M to 1,500 employees. As such, a company may be considered a Small Business on one Pool (e.g., Pool 6), but other than small on another (e.g., Pool 1).

The OASIS Ordering Guide and OASIS Contracts make it clear that an OASIS Ordering Contracting Officer (OCO) must select the task order NAICS code based upon the work to be performed and not based upon the applicable size standard or program office supported.

 Protest history: NAICS appeals on MA-IDIQs such as GSA OASIS go to SBA’s Office of Hearings and Appeals (OHA). Unfortunately, OHA’s decision at NAICS Appeals Of: Credence Management Solutions, Appellant makes apparent that an OASIS prime contractor has few if any options to successfully overturn an ordering contracting officer's (OCO) NAICS code and Pool assignment for an OASIS task order solicitation (unless the contractor is also a prime on that specific pool).

In summary, OHA determined two things:

1. The protest was untimely. Even though this protest was regarding the OCO’s section of a NAICS and Pool for a Task Order, OHA stated “any objection Appellant had to the designation of [the] NAICS code [for this] OASIS Pool […] should have been filed within 10 days of the issuance of the RFP for that [MA-IDIQ] contract.”
2. The appellant lacked standing to protest. Even though the protester was an OASIS Prime Contractor, they were not a Prime on the Pool used, so OHA determined they lacked standing to protest.

The rationale for this decision seems ludicrous. Firstly, The OCO is required to assign the NAICS code that reflects the principal nature of the work required under the task order. If the expectation is that NAICS codes will only be challenged at the IDIQ level, then the OCO is free to assign any NAICS he wants, whether it reflects the principal nature of the work or not.

Secondly, per FAR 19.103 & 13 CFR § 121.1103, “any person adversely affected by a NAICS code designation or applicable size standard” may appeal an OCO’s NAICS decision through SBA’s OHA within 10 days of the issuance of the solicitation. An OASIS Prime Contractor should be considered “adversely affected” and allowed to protest when they cannot bid on the Pool is selected by the OCO.

Question: Considering OHA’s apparent disinterest in entertaining a NAICs code selection on a TO, what options are available to industry to potentially prevent the OCO from selecting an inappropriate NAICS and Pool unrelated to the work simply because it has a larger Small Business size standard?

[formerfed]

Why not talk with the OCO and the OASIS contracting officer?  Are you excluded from competing with the assigned NAICS code?

[Don Mansfield]

5 hours ago, BlaineTheMono said:

Question: Considering OHA’s apparent disinterest in entertaining a NAICs code selection on a TO, what options are available to industry to potentially prevent the OCO from selecting an inappropriate NAICS and Pool unrelated to the work simply because it has a larger Small Business size standard?

Why not submit a nonmonetary claim? If the contract said that a certain type of work would be competed exclusively among the awardees of Pool X, but the contracting officer instead competed that work among the awardees of Pool Y, then that would probably be a breach of contract--right?

[Vern Edwards]

For a recent BCA decision concerning a nonmonetary claim (they are rare), see HBM Corporation v. Department of Energy, CBCA 7559, July 12, 2023.

https://www.cbca.gov/files/decisions/2023/LESTER_07-12-23_7559__HPM_CORPORATION (DECISION).pdf

To read an analysis of the decision, go to:

https://www.arnoldporter.com/-/media/files/perspectives/publications/2023/11/20231114-nash--cibinic-report--can-government-auditors-do-that1749955851.pdf?rev=46e2fc6c3a9341d99fc83a1a26e477ff&hash=771B0434351F51C897824CE0763D73F7

[formerfed]

Let me first say I have experience on both sides - a long career in government contracting and over 20 years in the private sector including business development responsibility.  It takes both proper adherence to contracting principles and astute marketing to be successful in the marketplace.

So a wise start in my opinion in this case is have a conversation with the contracting officer.  Find out why a particular NAICS code is selected.  You may not clearly see the government logic.  Or you may end up suspecting the government doesn’t want to limit competition to the pool you think is needed for a variety of reasons.  If you aren’t satisfied, several options exist - protest, file a nonmonetary claim, complain to senior agency management, submit a request for Congressional review by your representative, and so on.  But this usually doesn’t help you as a business.  In fact, quite often it hurts your company on future actions.  Even though it’s not right, government personnel often feel injured and upset and can hold that against you.   Also what sometimes happens in similar situations is the agency backs off their current approach and starts over with sometime like a FAR 15 full and open action, a GSA Schedule buy, or another GWAC.  Like the old saying goes, you might win the battle but lose the war.

Again, my advice is have a candid conversation upfront.  Then decide from there what you might do next.

[joel hoffman]

Some of the references I read indicated that you must submit a protest over an improper NAICS designation within 10 days of the date of publication of the solicitation.

[BlaineTheMono]

22 hours ago, joel hoffman said:

Some of the references I read indicated that you must submit a protest over an improper NAICS designation within 10 days of the date of publication of the solicitation.

Yes, the issue here is that OHA has interpreted the rule to mean 10 days of the solicitation for an IDIQ, not TOs under IDIQs. On a vehicle like OASIS where there are multiple Pools, it doesn't make sense that OHA won't entertain a NAICS code protest on a Task Order. No one would be trying to challenge which NAICS codes are associated with each OASIS Pool. Rather, the challenge would be that the OCO purposely picked an irrelevant NAICS code because it's Pool had a much larger size standard (e.g., 1,500 people vs $16.5M).

I agree with formerfed's comments about having a conversation with contracting. However, my original question was trying to find out what to do if that fails. OHA has dismissed these types of protests without even considering whether or not the OCO selected an appropriate NAICS. The lack of standing and untimeliness arguments seem extremely unfair to the protester in this situation, considering the language of the FAR and what was being challenged. 

[Retreadfed]

On 4/30/2024 at 3:56 PM, BlaineTheMono said:

Considering OHA’s apparent disinterest in entertaining a NAICs code selection on a TO, what options are available to industry to potentially prevent the OCO from selecting an inappropriate NAICS and Pool unrelated to the work simply because it has a larger Small Business size standard?

In addition to what others have written, you can still file a NAICS protest with OHA and if unsuccessful, file an "appeal" with the Court of Federal Claims asserting the proposed order is outside the scope of the contract.