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I've come to request the wisdom of the Wifcon Crowd

I am partnered with a company who has a prime contract under a multiple award contract that solicited in early 2017 and awarded at the end of FY 2018. The MAC was a full and open with language for potential reserves based on the rule of two. We are stuck competing in this MAC for small business set asides with a very aggressive, large business that just happened to only get large just after the solicitation. Currently, they have received more than 48 million in awards from the agency with the MAC, including more than 21 million in small business set asides in FY 20. This is against a size standard of 16.5 million. We just lost a task order to them where they bid $51k to provide 11 months full time support from a scientist with a BS and a couple of years' experience in Alaska, where the market wage rate is a minimum of $25 (so market wages alone would be 48k not including taxes, benefits, overhead, and profit). So pretty aggressive.

Prior to the rule change, we (and several other of the small businesses) had requested that NOAA do anything to at least try to limit the awards to this business (they are receiving roughly 25% of awards in a MAC with 17 vendors) under small business set asides, such as not awarding them set asides after they have received 16.5 million in awards from NOAA in a FY, or requesting new size certs with TO's, or for option years. They have actually come out during an annual meeting with the vendors and said they will not take any actions to limit awards to the small businesses that are still small or close to small.
Before the rule changes to 13 CFR 121.404 in October 2020, we were just stuck since their size at the beginning of the contract was small / HubZone. After the rule change, we were hopeful because this MAC was a full and open, and didn't include any indication that the agency (NOAA) was creating pools from awardees. However, when we discussed with the lead CO the possiblity of issuing a size status protest on a TO based on the updated rule, all of these rules that the agency COs have to follow were given to us. These stated rules seem, um, dubious:

  • NOAA does not have to implement changes to the CFR unless they are incorporated to the FAR (apparently ignoring that regulations on when size status being determined are only in the CFR and not the FAR as far as I can tell)

  • When a recertification is requested in a NOAA contract, a NOAA CO is responsible for making a size determination, and it is not appealable to the SBA (this is their stated reason for never requesting recertification at the TO level or during option years, because apparently nearly all of the businesses would suddenly become large under the rules describe below)

  • If NOAA requests that businesses do a new size certification for a TO, then my partner business with the prime contract will no longer be small because NOAA has its own rules for making size determinations (but only for recertification, they use SBA rules for initial certifications) that are:

  • NOAA takes the sum of all awarded contracts and their option years and adds them together in a single sum, which is then compared to the size status threshold, but does NOT use the CFR/SBA standard of annualized revenue, just the total of all awarded contracts and their full potential value over the entire life of the contract;

  • Whenever the CFR or FAR says a vendor or contractor must or may recertify, that actually means the CO does the certification using NOAAs special rules.

  • And finally, we can do a size protest but it is useless because it almost never works

To be fair, that last one is probably correct.

My question is about all of these rules they told use they have to follow. I have checked the CFR, FAR, Commerce Acquisition Regulations, the Commerce Acquisition Handbook, and the NOAA Acquisition Manual, and I can't find anything supporting these.

If these are real, can anyone provide a reference? At the moment, I feel like they are just gaslighting us so we won't submit a size status protest.

Also, can anyone explain why they are so hell bent on keeping this vendor being able to continue participating as a small business (there are still roughly another dozen small businesses, so lack of competition isn't the problem). I suppose how much they drive down price could be reason enough, but I thought they were also supposed to be ensuring SCA wage standards and professional pay standards.

This is the third fairly shady issue we have encountered under this TO. We have been doing decently, so the issue isn't sour grapes here as much as frustration at the apparent disregard for the rules and intent of the laws and regulations. We are having a hard time finding what rules they are operating under.

Any insight is appreciated!

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I might quibble with some of the "rules" you cited, but I am not seeing a problem.

A business that qualified as small based on its representation for initial award remains small throughout contract performance unless a recertification is asked for.  The agency hasn't asked for a recertification yet, but probably will in 2023 (five years after award).  This is okay.  As I see it, you have no basis for objection 

Apparently, your competitor gives good quality and good prices.  That's the primary goal, right?  And the agency is still getting small business credit.  As I see it, you have no basis for objection.

I am not seeing anything shady.  I think maybe it is sour grapes on your part.  I would suppose that your allegations of malfeasance are not well-received by agency officials.  If you want to win more work, you might want to sharpen your pencil, so to speak, and work a little harder.  

If you think your allegations of malfeasance have merit, contact the NOAA task order ombudsman with specific objections -- or the NOAA Inspector General -- or file a size challenge.  If you think a task order does not contain a required wage determination, contact the Department of Labor.

Making unsubstantiated allegations of criminality or ignorance is too easy, and is also unprofessional, dishonest, ignoble, and uncharitable.  There are avenues for you to pursue your allegations, and you can hire legal counsel to help you frame and pursue them.  If you really believe there is merit in your allegations, please pursue them in those proper avenues.  But based on what you wrote (that is all I have to work with), I am not seeing a problem 

Best wishes.

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8 hours ago, Salus said:

My question is about all of these rules they told use they have to follow. I have checked the CFR, FAR, Commerce Acquisition Regulations, the Commerce Acquisition Handbook, and the NOAA Acquisition Manual, and I can't find anything supporting these.

If these are real, can anyone provide a reference? At the moment, I feel like they are just gaslighting us so we won't submit a size status protest.

I presume that  your phrase, "these rules," refers to your bulleted list. If that is correct, then my reaction is that the list is just your description of what you think you were told by NOAA. As such, they are not descriptions of rules; they are merely your account of something that you think you were told. I've been around long enough to know that such accounts are not always reliable reports of what was really said.

You said that the contract in question was awarded in 2018. Is that correct? If so, and if NOAA told you that it does not have to apply the recertification (aka, rerepresentation) rules that took effect late last year to a contract that was awarded in 2018, then it told you the truth. Actually, NOAA cannot apply them, because it would have no contractual right to do so even if it wanted to. Any attempt to apply them would be breach of contract.

The new rules are contractually implemented by a new contract clause, FAR 52.219-28, Post-Award Small Business Program Rerepresentation (Nov 2020). Note the date of the clause. The new clause should not be in a contract that was awarded in 2018, unless it was added later through bilateral modification. Your contract probably includes the July 2013 version of the clause. The law does not give NOAA the authority to unilaterally modify the contract after award in order to implement the new policy.

If you still have issues, then I suggest that you seek information and counsel from a law firm that practices in the field of small business law and regulation.

Here's a truth about multiple-award contracts: To many of the firms that get into them, they turn out to be nothing more than attractive nuisances.

 

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First, Vern Edwards, thank you for providing a response pointing to the actual relevant contract clause. That is the specific reference that I needed to make a decision on whether to protest or not. We had been asking about whether the updated 13 CFR 121.404 was applying at the contract/procurement level or if it would apply at the procurement action/task order level. But FAR 52-219-28 (July 2013) was incorporated by reference. That lets me know the answer is a hard no. 

We had asked for the regulatory references for what would prevent the updated 13 CFR 121.404 from applying, and this is the first time we have gotten a response that nailed the answer. That is why I posted here. I don't know what I don't know, and the vast majority of queries posted here seem to get a solid answer.

It is certainly the case that any one side telling a story is not the whole story or a fully correct. I would still be interested in any information on situations where the agency itself is responsible for carrying out a size-status determination on its own. I mean they pulled the full suite of contract awards and options years to demonstrate how our team would no longer be considered small (less than 1/3 of the standard on an annualized basis, but larger if you sum all contracts and potential option years). Is anyone aware of this being a practice? Theoretically, we could have imagined that response entirely (or gotten it epically wrong). I have worked for the government for 15 years and with the government another 5, and I have seen that things sometimes just get baked into practice or culture, so even when I feel like maybe I am being gaslighted, I don't assume (or accuse) someone of wrongdoing.

I also don't feel like asking for clarification or reference to the actual regulation should be received as an accusation of malfeasance. We have not issued any protests at all, or even threatened to. We asked for the regulatory framework that would tell us how this contract addressed this issue (the answer that Vern provided). This is something they have offered as a way of resolving any questions like this before a protest is launched.

Maybe the term shady came off harsher than it should have. This is the third issue that we have not been able to get an answer on from the agency, and the first one we finally got nailed down. The other two issues are not worth protesting because they don't particularly disadvantage us, and it would be pretty disruptive to how they managed contractors and their budget if they were forced to change in a short amount of time. So they were things we asked about and did not get an answer on, but not something we pushed back on (high risk, low reward).

Also, I thought the purpose of the Small Business Act was to ensure small businesses got to compete for small business set asides. There is no question or ambiguity that the company has received 3 times the size standard, and more than the size standard in small business set asides in a year. I know that this is allowed within the regulation. But at the point that the government keeps awarding set-asides to a company that has received more than the size standard in federal contracts in that FY, it starts to seem pretty contrary to the intent of the Small Business Act, even if they are providing a great deal for the government. And it doesn't feel unreasonable to ask the COs to use their available tools to curtail that.

Thanks again for your answer Vern.

 

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As you have been told, there is no problem.

If/when re-representation occurs (whether at the contracting officer's discretionary request or by application of a contract clause), the agency will not "carry out a size status determination." Rather, the contracting officer will either (1) rely on the contractor's re-representation; or (2) protest the re-representation to the SBA.  If the contracting officer chooses (1), then you may protest.

I think your use of the term "shady" came across exactly as you intended.

You err in thinking that making awards in set-aside situations that exceed the applicable size standard is contrary to the intent of the Small Business Act.  That is wholly wrong on your part.

The rules for fair opportunity considerations do not provide for an apportionment of orders among contract holders -- rather, it provides a fair opportunity for all contract holders to be considered for each task order opportunity.  The exceptions to fair opportunity do not provide for excluding a contractor when its awards meet the size standard.

It seems your competitor is providing great work at good prices.  I think your best path to happiness will be to follow your competitor's example.  From what you have provided, it seems like everything is working as it should.

I think that learning is one of the primary benefits of WIFCON.  I hope these interactions are helpful.  Best wishes.

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11 hours ago, Salus said:

I would still be interested in any information on situations where the agency itself is responsible for carrying out a size-status determination on its own.

@SalusThe only agency empowered to determine a firm's size status is the SBA. SBA sets size standards and makes size determinations. See 13 CFR Part 121 and FAR 19.302 for details. An agency might have an opinion about whether a firm is or is not small, but that opinion has no official force. The SBA must make a determination, and FAR 19.302(c)(1) instructs contracting officers to refer their own or third-party size protests to the SBA. See also 13 CFR 121.403 and 13 CFR 121.1001.

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11 hours ago, Salus said:

Also, I thought the purpose of the Small Business Act was to ensure small businesses got to compete for small business set asides. There is no question or ambiguity that the company has received 3 times the size standard, and more than the size standard in small business set asides in a year. I know that this is allowed within the regulation. But at the point that the government keeps awarding set-asides to a company that has received more than the size standard in federal contracts in that FY, it starts to seem pretty contrary to the intent of the Small Business Act, even if they are providing a great deal for the government. And it doesn't feel unreasonable to ask the COs to use their available tools to curtail that.

@SalusThat's a reasonable opinion. But keep in mind that government officials are bound by (1) statutes and regulations and (2) the terms of their contracts. NOAA likely complied with law and regulation as they were in 2018. Having done so, they cannot block a contractor from competing for future orders unless they have a legally supportable reason.

The rise in the use of multiple-award task order contracts since the mid-1990s has been disruptive in many ways that were not anticipated when Congress authorized and set rules for their use in 1994. No one expected what has happened since, or the impact on small businesses. There are still issues to resolve with respect to small business policy.

Your disappointment and frustration are understandable, but it does not sound to me like NOAA is deceiving or manipulating you. 

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@Salus  I have read and re-read this thread as it trailed on and one thing keeps popping up for me.  Reference to contract awards as compared to a size standard.  I also note that you have said you understand receiving more awards than the size standard is okay.  Yet your terminology is a little off as size determinations are not based on awards but "receipts".   I fully understand you may realize this yet your concern about "awards" and size is not fully aligned with 13 CFR 121.   Likewise I understand even "receipts" most likely leads to the same concerns that you have expressed about application of 13 CFR 121.404.   Yet I just needed to point out for the sake of the thread that the measure of firms size is receipts and not contract awards -  Reference 13 CFR 121.104. 

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On 4/29/2021 at 11:40 PM, Salus said:

We are stuck competing in this MAC for small business set asides with a very aggressive, large business that just happened to only get large just after the solicitation. Currently, they have received more than 48 million in awards from the agency with the MAC, including more than 21 million in small business set asides in FY 20.

Salus, can you clarify what i have quoted.  Did the concern become large after the solicitation was issued but before it submitted its proposal or did it become large after submission of its proposal?

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  • 2 weeks later...

Sorry for the delay, my notification emails got buried. 

C Culham, - yes, I am aware that it is based on receipts rather than awards. This business first self certified as large right after the contract was awarded (then went back to small for about a year because of the rule change allowing companies to use a 5 year average of receipts instead of 3). There isn't any debate by anyone as to whether they are currently large or not, they blew right past that with some exceptional growth.

Retreadfed - They did become large after they submitted their proposal and after the contract award for the IDIQ/master contract. 

After the info from Vern, it is clear that they will remain small for the remainder of the contract unless a CO requests a re-representation for a specific task order. 

We also managed to talk it out with the agency so that everyone is on the same page. Obviously we are still not happy about seeing so much money go to a large business under small business set asides, but at least we are clear now on the framework we are operating under. And at least the rule change should reduce this issue for future IDIQs.

I appreciate everyone's time on this!

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I am glad that you have learned how things work, and that there is no problem either with your competitor or the agency. All is well, and everyone is and has been acting honorably.  Good.

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On 5/5/2021 at 9:41 AM, Retreadfed said:

Salus, can you clarify what i have quoted.  Did the concern become large after the solicitation was issued but before it submitted its proposal or did it become large after submission of its proposal?

Not applicable here because of when the ID/IQ was awarded plus Salus clarified that the competitor became “large” after award of the ID/IQ but I read this recent blog article, which mentioned recent rule changes concerning a change of status in between proposal submission and award:

http://www.wifcon.com/discussion/index.php?/blogs/entry/4897-cofc-examines-small-business-size-recertification-after-merger-or-sale/

 

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