B2B Payments

Court Ruling Reveals Complexities Of SMB Government Contracts

The U.S. General Services Administration (GSA) has been forced to throw out $15 billion worth of IT service contracts with small businesses (SMBs) issued last year, after the Court of Federal Claims ruled that the government incorrectly evaluated vendor bids.

Washington Business Journal reports said last week that the GSA, an independent government agency, must start the process over, throwing out contracts previously awarded to 81 government contractors as part of its Alliant 2 Small Business (A2SB) vehicle. The case emerged after technology contractor Citizant challenged the awards, issuing a protest over how the government evaluated the bids of 20 vendors.

A2SB was launched in 2016 as part of the government’s efforts to revamp IT services, and included a $50 billion contract open to all vendors, as well as a $15 billion, 10-year contract to be awarded to small businesses.

Reports noted that the decision to toss the awards, issued in February 2018, is unique because protests to challenge a government contract award typically address a single vendor. According to Professional Services Council Executive Vice President and Counsel Alan Chvotkin, Citizant’s protest included multiple contractors, leading to the eventual disposal of the entire award of 81 contractors.

“Most of the protests to date have challenged an individual company’s evaluation,” he told the publication. “What fascinated me about this decision was that they challenged a number of offerers. I’m confident they asked for an awful lot of documentation. The Court of Federal Claims was pretty tough on [the] GSA for really failing to follow their own rules, and that’s usually the death knell for an agency.”

Complex Bidding Process

The court’s ruling sheds light on the complexities of the government bidding process, as federal agencies are encouraged to increase their work with SMB vendors.

According to reports, Citizant’s contract protest argued that a GSA contracting officer was incorrect in their low score of Citizant’s bid, despite some awardees failing to provide adequate pricing information or to substantiate the scores of their cost accounting systems, both of which are necessary in the bidding process. The protest also challenged the agency’s analysis of pricing requirements for five other bidders that secured awards.

“To find these kinds of mistakes in their processing, it’s a shame for [the] GSA, for the vendors [that] have invested an awful lot of time and money, and for the agencies that have not hit this stumble,” said Chvotkin. “But, to me, it is a good [example] of what the protest system is designed to do, which [is] to hold the agencies accountable for complying with their own rules. And here, [the] GSA, for whatever reason, didn’t do that.”

GSA officials did not comment on the ruling, noting that the A2SB acquisition “is an ongoing procurement, subject to procurement integrity considerations.”

Small businesses are focal points for government procurement, according to the Small Business Administration (SBA). The federal government aims to award 23 percent of all contracts to SMB vendors, with the SBA’s Office of Government Contracting offering small businesses a range of resources to secure government contracts.

However, the case with the GSA has revealed that the process to securing a government contract can go south, even when a small business does everything correctly. This may be due to lapses in government procurement process efficiencies. Research released in 2017 from Onvia found that nearly 40 percent of public sector buyers at the state and local government levels struggle with adequate time to research bids. Government buyers feel overworked, the report revealed.

“Smart governments recognize that strategic investments in their procurement teams translate into more value for the citizens they serve,” said Onvia Exchange Director Ben Vaught in a statement at the time. “Procurement officers must lead the way in identifying modern tools to increase their productivity.”

——————————–

Latest Insights: 

With an estimated 64 million connected cars on the road by year’s end, QSRs are scrambling to win consumer drive-time dollars via in-dash ordering capabilities, while automakers like Tesla are developing new retail-centric charging stations. The PYMNTS Commerce Connected Playbook explores how the connected car is putting $230 billion worth of connected car spend into overdrive.

TRENDING RIGHT NOW

To Top