February 16, 2018
Large businesses are authorized to protest an award of a small business set aside contract. However, that authorization is quite limited. In a recently released bid protest decision, the GAO confirmed again the few circumstances under which a large business can protest a small business award. See Synchrogenix Information Strategies, LLC, B-414068.6, Dec. 22, 2017, 2018 CPD ¶ 8 (released Jan 30, 2018).
The Synchrogenix decision was the third in a series of protests arising from a Request for Proposals (RFP) issued by the United States Food and Drug Administration (FDA) for software services. Only two companies, both small businesses, responded to the initial RFP: GlobalSubmit and Lorenz. The FDA awarded to Lorenz, and GlobalSubmit filed its first protest. In response, the FDA took corrective action, accepted new proposals, and required all offerors to submit new certifications regarding their small business status.
During the new RFP process, GlobalSubmit was purchased by a large business, Synchrogenix, and therefore no longer qualified under the small business set aside. Synchrogenix then filed its second protest, which asserted that the FDA had no reasonable expectation of receiving at least two proposals as required by FAR § 19.502-2(b)(1). The GAO denied the second protest, finding it is not unusual for small businesses to drop out of revised solicitations due to size protests or other factors. In short, two small businesses responded to the FDA’s initial RFP, which the GAO found sufficient to meet the FAR competition requirements.
Under the revised RFP, the FDA awarded to Lorenz again. In response, Synchrogenix filed its third and final protest, which is the subject of the GAO’s most recent decision. GAO denied the protest. In its decision, GAO confirmed the “general rule” that a large business is not an interested party to challenge an award under a solicitation set aside for small businesses because the large business cannot be in line or eligible for an award. Id. The GAO then identified only two recognized exceptions to the general rule: (1) where an agency makes award to a small business on an improper sole-source basis; and, (2) where only one small business bidder exists and the large business alleges that the award was made at an unreasonable price. Synchrogenix did not assert or prove either of these exceptions and, therefore, its protest was denied.
It is often true that a protest is not won on the rule; it is won on the exceptions. In this case, Synchrogenix had no exceptions upon which it could rely, and the general rule was not helpful to its cause.