In a recent bid protest decision from the U.S. Government Accountability Office (“GAO”), the GAO clarified that, in evaluating the experience of a mentor-protégé joint venture for a small business set-aside procurement, when the joint venture itself does not have the required experience (normally because it’s a newly formed enterprise), the agency must evaluate each joint venture member’s experience individually.
In AttainX, Inc., B-421216, B-421216.2 (Feb. 9, 2023), the GAO sustained a protest alleging the agency’s evaluation of the 8(a) small business joint venture awardee’s experience was improper. The General Services Administration issued a task order under the Streamlined Technology Acquisition Resources for Services (“STARS”) III contract. The task order was set-aside for small businesses. According to the evaluation, both the Protester and awardee, MiamiTSPi, “stood above” the other offerors. The contracting officer conducted a comparative analysis of these two companies’ quotations, ultimately awarding the task order to MiamiTSPi, a tribally-owned 8(a) SBA-certified joint venture. Miami Technology Solutions, LLC (“Miami” or “MTS”) is an 8(a) small business and the managing member of the joint venture, and Technology Solutions, Provider, Inc. (“TSPi”) is the minority member and also a small business. The record was unclear whether MTS and TSPi are in SBA’s mentor-protégé program, but there was no dispute that MTS is the protégé member of the joint venture that received the award.
The solicitation instructed offerors to submit at least two experience examples for projects within the last five years, with a detailed narrative of how the experience relates to the task order at issue. The awardee joint venture, MiamiTSPi, submitted two experience examples:
- A contract awarded to a different joint venture, MTSPi, LLC, of which TSPi and MTS were members; and
- A contract awarded to TSPi.
The Contracting Officer assigned the MiamiTSPi joint venture a rating of “acceptable” for meeting the evaluation standards, while noting that any weaknesses were readily correctable. Still, as the protester pointed out, MTSPi, LLC – while having a similar name to awardee – was a different joint venture between MTS and TSPi than that which received the award.
The Small Business Act requires that when a joint venture “does not demonstrate sufficient capabilities or past performance” for a procurement, the agency must “consider the capabilities and past performance of each member of the joint venture as the capabilities and past performance of the joint venture.” 15 U.S.C. § 644. Relatedly, the SBA regulations state that the agency “must consider” work done “individually by each partner to the joint venture” as well as any work done by the joint venture itself. See 13 C.F.R. § 125.8(e). With that said though, the agency “may not require the protégé firm to individually meet the same evaluation or responsibility criteria as that required of other offerors generally. The partners to the joint venture in the aggregate must demonstrate the past performance, experience, business systems and certifications necessary to perform the contract.” Id.
Here, the GAO concluded that the agency improperly evaluated MiamiTSPi’s experience, sustaining the protest. First, the agency incorrectly gave the joint venture awardee credit for the past performance of a separate – albeit similarly named – joint venture (MTSPi instead of MiamiTSPi). Second, because the joint venture offeror itself did not have any past experience, the agency was required to consider the experience of “each partner.” But, according to the GAO, the agency did not evaluate each partner – there was no evaluation of MTS’s experience, particularly relevant as the managing protégé member of the joint venture. The GAO concluded the only experience examples were for TSPi, but not MTS, “indicating that the evaluators never even considered the limited nature of the experience examples included in MiamiTSPi's quotation.” The agency’s evaluation was deemed unreasonable notwithstanding the fact that the solicitation did not require examples from the joint venture offeror or from each of the individual members, because the SBA’s regulations take precedence in setting the requirements.
There are two curious aspects of the GAO’s decision that we would like to note:
- The GAO states that the record “shows only that the awardee submitted project examples for TSPi – by itself and as part of a different joint venture (MTSPi). The agency therefore did not evaluate a project example from the joint venture, MiamiTSPi, or from MTS, the managing protégé member of the joint venture.” But, elsewhere the GAO observes that MTSPi was another joint venture between TSPi and MTS. It seems odd that the GAO ignores MTS’s participation in the other joint venture and only credits TSPi for that experience, notwithstanding the fact that this experience was shared by the joint venture partners.
- The GAO did not discuss the regulatory requirement that the agency may not require the protégé to meet the same criteria as other offerors, nor did the GAO discuss the regulation’s statement that the joint venture “in the aggregate” must demonstrate the experience necessary to perform the contract. As a result, we may have to wait for future decisions to shed light on the extent of “consideration” that must be afforded to each member’s experience and the relationship between the protégé’s experience vis à vis the criteria, as well as the joint venture’s aggregate experience.
In practice, AttainX stands for the very formalistic proposition that when a joint venture itself does not have experience, each member of the joint venture should try to demonstrate relevant experience. Indeed, the joint venture may want to provide a narrative if the protégé lacks experience to ensure that the agency “considers,” and hopefully documents, that the experience of “each” member was considered. This consideration of each member’s experience should be sufficient, because the protégé does not have to meet the same criteria as other offerors – the regulations allow the joint venture “in the aggregate” to demonstrate the necessary experience. In other words, if the joint venture does not have experience, and only the mentor member has experience, the joint venture is not disqualified – all that is required, according to the GAO, is that the agency “considers” each member’s experience. Companies will also want to be careful when citing to experience from closely-affiliated entities, but entities that (nonetheless) are not the actual members of the joint venture offeror.
This decision may create a hurdle for mentor-protégé joint ventures going forward if the joint venture itself lacks the requisite experience. Namely, if the agency fails to document that it at least considered the protégé’s experience – or lack thereof – even if the solicitation itself does not require each member of the joint venture to submit experience as part of its proposal, then the GAO still may find the award unreasonable. Small business offerors, on the other hand, now have a useful ground on which to protest the award of a set-aside contract to mentor-protégé joint ventures where the experience criteria of the solicitation is likely to be very important.