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Did GAO get this right or wrong?


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See https://www.gao.gov/products/b-419111 and https://www.gao.gov/products/b-419515

 

I have a sealed bid solicitation that was set-aside for small businesses and opened bids yesterday. The low bidder was not registered in SAM.gov at the time their submitted their bid; they actually were not aware they were supposed to register in SAM (apparently they generally perform work at a State and County level). The IFB included FAR Provisions 52.204-7 System for Award Management (Oct 2018). 

 

On the surface my initial reaction was the low bidder should be non-responsive. After reading the two GAO cases above, apparently GAO looks at SAM registration as a matter of responsibility. I can't see how a provision requiring registration in SAM prior to offer is responsibility. I suppose 9.104-1(g) leaves room for being eligible for award. 

 

52.204-7 changed in 2018. It used to say offers had to be registered in SAM prior to award and now is at time of offer and with these two decisions it's basically unenforceable. What am i to do, refer the matter to the SBA for a certificate of competency? What I'll do is just tell the low bidder to register and be done with it, but I think these two decisions, together with the FAR provision 52.204-7 is ridiculous. 

 

So is GAO right or wrong in their decisions? either way i think they should be wrong or they should revert 52.204-7 to a similar pre-2018 change. 

 

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@dsmith101abnThe only thing that GAO got wrong was that they took five pages to rule against the agency in the Master Pavement protest. They should taken only three, like they did in the other decision. Or maybe two, but that might be pushing it.

GAO's decisions are consistent with FAR and based on long-standing sealed bidding case law.

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Quoted many times, but this is the one I have in the file for such matters:

Great Lakes Dredge & Dock Company (gao.gov)

"A bidder need not demonstrate compliance with solicitation requirements pertaining to its responsibility, that is, its ability to perform as promised, in order to have its bid determined responsive. Moreover, the fact that the IFB called for submission of a permit showing that the proposed disposal site was "legal to operate" as of the bid opening date does not convert the permit requirement into a matter of bid responsiveness. The terms of a solicitation cannot convert a matter of responsibility into one of responsiveness."

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On 6/2/2021 at 1:52 PM, dsmith101abn said:

I can't see how a provision requiring registration in SAM prior to offer is responsibility.

It has nothing to do with the product or service being offered (quantity, quality, delivery, and so forth).  From one of the decisions:  "...the requirement for a bidder to be registered in SAM prior to bid submission is not material to the bid itself because it does not impact the material obligations of the bidder..."

But if the bid is the low offer and the apparently successful offer, consider its bid as responsive and the apparently successful bid -- then, later the same day, ask for the registration and declare the low bidder non-responsible if it does not deliver -- the bidder is not "qualified and eligible to receive an award."  FAR 9.104-1(g).  You see, the bid is responsive but the bidder is non-responsible.

On 6/2/2021 at 1:52 PM, dsmith101abn said:

What am i to do, refer the matter to the SBA for a certificate of competency?

You do not need to delay award to allow the bidder time to obtain the registration.  If you need to award tomorrow, ask for the SAM registration today -- if you don't get it, declare the bidder non-responsible and move on to the next low bidder.  You don't need a Certificate of Competency referral in case of a small business.  FAR 19.602-1(a)(2)(i).  Just do it.

On 6/2/2021 at 1:52 PM, dsmith101abn said:

What I'll do is just tell the low bidder to register and be done with it...

This is your decision, and I suppose it is gracious of you.  But you do not have to make that decision -- the FAR and the GAO do not drive you to that decision.

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I hope the same bidder that "wasn't aware they were supposed to register in SAM" will not be as equally ignorant regarding other aspects of Federal contract compliance.

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23 minutes ago, here_2_help said:

I hope the same bidder that "wasn't aware they were supposed to register in SAM" will not be as equally ignorant regarding other aspects of Federal contract compliance.

Right -- good point.  If the original poster will call the low bidder non-responsible instead of non-responsive, he or or she can award to the next low responsible and responsive bidder (with no COC process).

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16 hours ago, ji20874 said:

FAR 19.602-1(a)(2)(i).  Just do it.

Thanks JJ. Honestly I didn't realize that exception was a thing. Now that I'm looking at this a little different I can see how it's a responsibility issue not responsiveness. 

Something I have learned is the FAR lets you do a lot of different things and has a lot of flexibility, but administratively, at least in my experience, there are limitations either from information technology, office processes, etc. that keeps you from doing what you want. At my last office the COCO was a GS-15 in the same building and getting the approval at 19.602-1(a)(2)(i) would have been fairly easy. Where I'm at now they are an SES on the other side of the country and getting to that person is a little harder. Administratively probably take longer to get approval than the 2-3 days the SAM registration takes. 

I think the contractor will perform, well the actual work anyways. The requirement is for geotechnical drilling for a road in the middle of a national forest. They're going to drill holes and take soil samples. What I have seen is a lot of these contractors are small 1-2 person shops that have a drilling rig and they're really good and operating the rig and getting into hard to access sites, but struggle with administrative or clerical tasks. 

Anyways, I appreciate everyone input. I've learned something new. 

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17 hours ago, ji20874 said:

But if the bid is the low offer and the apparently successful offer, consider its bid as responsive and the apparently successful bid -- then, later the same day, ask for the registration and declare the low bidder non-responsible if it does not deliver -- the bidder is not "qualified and eligible to receive an award."  FAR 9.104-1(g).  You see, the bid is responsive but the bidder is non-responsible.

Are you saying that the bidder would be ineligible because they weren't registered in SAM?

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18 minutes ago, dsmith101abn said:

Administratively probably take longer to get approval than the 2-3 days the SAM registration takes.

That's a fair call.  Here's a quote from the case Carl referenced:

Quote

Our Office has consistently held that an agency may, in its discretion, allow a prospective awardee a reasonable time period after bid opening to cure a problem related to its responsibility, including the need to obtain any necessary certification, since contract award and not bid opening is the critical time for determining the responsibility of a firm. Right Away Foods Corp., B-216199, Jan. 3, 1985, 85-1 CPD Para. 15. However, a procuring agency is not required to delay award indefinitely while a bidder attempts to cure the causes for the firm being found nonresponsible. ICR, Inc.Request for Reconsideration, B-223033.2, Nov. 4, 1986, 86-2 CPD Para. 516 at 5.

 

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13 minutes ago, Don Mansfield said:

Are you saying that the bidder would be ineligible because they weren't registered in SAM?

I said what I did, in the context that I said it in.  If the agency needs to make the award today, and the low bidder is not registered in SAM yet, then that bidder may be declared non-responsible amenable to FAR 9.104-1(g).  In the original poster's case, it seems like he or she is okay with delaying award a few days.

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2 hours ago, here_2_help said:

I hope the same bidder that "wasn't aware they were supposed to register in SAM" will not be as equally ignorant regarding other aspects of Federal contract compliance.

Maybe they were award of the GAO decisions and knew that they did not have to be registered at the time of bid submission or bid opening.

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47 minutes ago, ji20874 said:

I said what I did, in the context that I said it in.  If the agency needs to make the award today, and the low bidder is not registered in SAM yet, then that bidder may be declared non-responsible amenable to FAR 9.104-1(g).  In the original poster's case, it seems like he or she is okay with delaying award a few days.

I don't think you could say the bidder was ineligible for not being registered in SAM. The applicable definition of "ineligible" at FAR 2.101 states:

Quote

 

Ineligible means excluded from Government contracting (and subcontracting, if appropriate) pursuant to statutory, Executive order, or regulatory authority other than this regulation (48 CFR chapter 1) and its implementing and supplementing regulations; for example, pursuant to–

           (1) 40 U.S.C. chapter 31, subchapter IV, Wage Rate Requirements (Construction), and its related statutes and implementing regulations;

           (2) 41 U.S.C. chapter 67, Service Contract Labor Standards;

           (3) The Equal Employment Opportunity Acts and Executive orders;

           (4) 41 U.S.C. chapter 65, Contracts for Material, Supplies, Articles, and Equipment Exceeding $10,000;

           (5) 41 U.S.C. chapter 83, Buy American; or

           (6) The Environmental Protection Acts and Executive orders.

 

So, I don't think you can hang your hat on FAR 19.602-1(a)(2)(i) solely because a bidder isn't registered in SAM.

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1 hour ago, Vern Edwards said:

Maybe they were awar[e] of the GAO decisions and knew that they did not have to be registered at the time of bid submission or bid opening.

I'm nodding my head. You might well be correct!

(Always look on the bright side of life.)

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Thanks @C Culham 

I'll keep that in mind. i had directed them to the Federal Service Desk. While far from perfect they've come a long ways since CCR/ORCA timeframe. I've received mixed feedback from contractors depending on what their issue was. 

According to the PTAC website, it tells us to allow for 12-15 business days after you submit a SAM registration. In my case it took 3 calendar days, well at least that's when i noticed the contractors registration was active.  Had I needed to wait the better part of a month, that could cause an issue with different fact patterns. 

 

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3 hours ago, Don Mansfield said:

I don't think you could say the bidder was ineligible for not being registered in SAM.

If you are suggesting that the contracting officer must delay award until the apparently successful offeror gets around to doing its SAM registration, then we will disagree.  I am okay with the original poster's discretionary decision to delay award to accommodate the low bidder, but I will disagree that he or she must have made that decision.  If the procurement had some urgency, and if I were the contracting officer, I would be willing to rely on FAR 9.104-1(g) to determine the low bidder non-responsible and FAR 19.602-1(a)(2)(i) to go to the next-low bidder without a COC.  I would not allow the low bidder to hold my agency hostage.  The GAO says to treat SAM non-registration as a matter of responsibility -- and speaking of matters of responsibility, the GAO says "Our Office has consistently held that an agency may, in its discretion, allow a prospective awardee a reasonable time period after bid opening to cure a problem related to its responsibility" (my emphasis). 

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@ji20874I'm only pointing out that your reliance on FAR 19.602-1(a)(2)(i) is misplaced. Nothing more.

Quote

 

(a) Upon determining and documenting that an apparent successful small business offeror lacks certain elements of responsibility (including, but not limited to, capability, competency, capacity, credit, integrity, perseverance, tenacity, and limitations on subcontracting, but for sureties see 28.101-3(f) and 28.203-1(e)), the contracting officer shall-[...]

           (2) Refer the matter to the cognizant SBA Government Contracting Area Office (Area Office) serving the area in which the headquarters of the offeror is located, in accordance with agency procedures, except that referral is not necessary if the small business concern-

                (i) Is determined to be unqualified and ineligible because it does not meet the standard in 9.104-1(g), provided, that the determination is approved by the chief of the contracting office

 

Failure to register in SAM does not make a bidder ineligible as defined at FAR 2.101.

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@Don Mansfield From FAR 2.101:

Quote

 

Ineligible means excluded from Government contracting (and subcontracting, if appropriate) pursuant to statutory, Executive order, or regulatory authority other than this regulation (48 CFR chapter 1) and its implementing and supplementing regulations; for example, pursuant to–

           (1) 40 U.S.C. chapter 31, subchapter IV, Wage Rate Requirements (Construction), and its related statutes and implementing regulations;

           (2) 41 U.S.C. chapter 67, Service Contract Labor Standards;

           (3) The Equal Employment Opportunity Acts and Executive orders;

           (4) 41 U.S.C. chapter 65, Contracts for Material, Supplies, Articles, and Equipment Exceeding $10,000;

           (5) 41 U.S.C. chapter 83, Buy American; or

           (6) The Environmental Protection Acts and Executive orders.

 

See Master Pavement Line Corporation, GAO B-419111, Dec. 16, 2020, Footnote 5:

Quote

Our decision in this case is distinguishable from our recent decision in Acon Traders, LLC, B-417558, June 26, 2019, 2019 CPD ¶ 226 where we denied a protest challenging the agency's rejection of a quotation when the firm submitting the quotation was not registered in SAM at the time it submitted its quotation as required by FAR provision 52.204-7. Unlike the case here, in Acon, the procurement was conducted using the simplified acquisition procedures of FAR part 13, which do not have the same mandatory cure or waiver provisions as set forth in FAR 14.405, and the protester was otherwise ineligible for award because it was technically unacceptable.

Emphasis added. Is that usage consistent with FAR 2.101?

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31 minutes ago, Don Mansfield said:

I'm only pointing out that your reliance on FAR 19.602-1(a)(2)(i) is misplaced.

I believe you are in error.  But, assuming arguendo that I am in error, you would thus insist that the contracting officer must delay award until the apparently successful offeror gets around to doing its SAM registration, or else must do a COC for a small business low bidder -- is that right?

I think that is wrong, but I am trying to make sense of what you are saying.

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50 minutes ago, ji20874 said:

I believe you are in error.  But, assuming arguendo that I am in error, you would insist that the contracting officer must delay award until the apparently successful offeror gets around to doing its SAM registration -- is that right?

No, I haven't reached any conclusions. There may be a way to avoid a delay. However, I'm not convinced by your reasoning. Your premise is that failure to register in SAM makes a bidder "unqualified and ineligible" as used at FAR 19.602-1(a)(2)(i). Given the definition of "ineligible" at FAR 2.101, I reject your premise. 

1 hour ago, ji20874 said:

I think that is wrong, but I am trying to make sense of what you are saying.

I don't know how to express myself more clearly. Sorry.

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2 hours ago, Don Mansfield said:

I don't think so. What is your point?

That not everybody worries about precise uses of words defined in FAR when used out of context.

That if the GAO can use "ineligible" the way they did, so can I. So can ji20874. So can you. So can anybody. And it won't make a damned bit of difference, legally or otherwise.

Here's a usage quoted by the Court of Federal Claims in Ranger American of Puerto Rico, Inc. v. U.S., --- Fed.Cl. --- (May 14, 2021), in Footnote 14.

Quote

 

The SSEB explained that: "During the initial screening, Offeror 7 [redacted] was deemed ineligible for award. Offeror does not reside or primarily doing [sic] business in the disaster area in accordance with FAR 52.226-3 Disaster or Emergency Area Representation and therefore were [sic] not evaluated."

 

The court rejected the protest.

And here's one from PAE Applied Technologies, LLC, --- Fed.Cl. --- (April 14, 2021):

Quote

United States Department of the Navy (Navy) reasonably found incumbent contractor's proposal unacceptable, and thus, ineligible for award of contract for technical support services for operational testing and fleet training missions, where solicitation required bidder to fill key personnel position of senior radar cross section (RCS) engineer, individual slated to fill position for bidder had resigned after final proposals were submitted, bidder had failed to list any contingency hires for this mandatory position in its bid, and, although bidder had attempted to hire a replacement, there was no employment agreement between the parties at the time of the award.

The definition of "ineligible" in FAR 2.101 merely says what the word means when found in the FAR. It does not dictate other uses in other contexts.

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2 hours ago, Don Mansfield said:

Your premise is that failure to register in SAM makes a bidder "unqualified and ineligible" as used at FAR 19.602-1(a)(2)(i).

You incorrectly characterize my premise.  Please engage honestly.

 

2 hours ago, Don Mansfield said:

I haven't reached any conclusions.

And you are not contributing to a meaningful discussion.  Please reach a conclusion and share it.  Do you believe that an agency must delay award to allow the otherwise successful bidder to do its SAM registration?  Why or why not?  It seems like your answer to the first question is YES, with which I disagree, but you won't commit yourself.  You will hep our readers by answering the question and explaining why.

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