Under the 8(a) and the HUBZone program, contracting officers are required by law to compete contracts over $3 million and $5 million depending on the item acquired. The contracting officer worked to rig a sole-source procurement in violation of law. Here is a quote from the link below

First one

"On July 9, 1999, ______ submitted a price proposal of $3,287,480 for the 160,000 total estimated hours. On July 15, 1999, Mr. CO issued amendment number seven to the solicitation, which reduced the total estimated guard hours from 160,000 to 146,000, and requested that _______ submit a price proposal by July 19, 1999. On July 15, 1999, ________ submitted a price proposal of $2,968,140. Incorporated with the proposal was a cover letter addressed to Mr. CO from Mr. ___, Chief Executive Officer of _____, which stated, in pertinent part:

I am submitting the second revision of the cost proposal for the Ohio contract. I hope that it meets your concerns pertaining to the $3 million dollar threshold for this contract. This should be considered as our best and final offer . . . . "

Second one

"On June 2, 1999, Ms. ______, the individual responsible for preparing Diamond’s price estimate, spoke with Mr. CO via telephone concerning GSA’s market research chart. During this conversation, Ms. _____ told Mr. CO that _____ would not be able to perform the 200,000 guard hours listed on the market research chart for under $3 million. On that same day, Mr. CO sent to Ms. ______ via facsimile a new market research chart that requested a price estimate for 165,000 security guard hours. Also on that same day, Ms. ______, on behalf of _______, submitted a price estimate of $2,940,119 for the 165,000 guard hours. A few days later, Mr. CO called Ms. _____, informing her that based upon _______’s price estimate, he would negotiate the contract with "her".

"On June 24, 1999, GSA held a pre-proposal conference with _______, in which GSA discussed, among other things, changes it would make to the solicitation. GSA was represented at the conference by Mr. CO, Mr. CO2, Contracting Officer, Ms. ________, who attended the conference on behalf of _______, attested that Mr. CO "stated that he needed to keep the procurement award below three million dollars because otherwise he would not be allowed to sole source it."

Why do COs break the law and what is done when they are caught redhanded like this?

http://www.contracts.ogc.doc.gov/fedcl/opinions/2000opin/99-780C.pdf

By C MERCY on Tuesday, October 10, 2000 - 10:05 am:

THE THRESHOLDS YOU MENTION APPLY TO 8A CONTRACTS NOT HUBZONES. HUBZONES ABOVE 2.5K MUST BE COMPETED UNLESS SUPPORTED BY A SOLE SOURCE JUSTIFICATION. SECONDLY, IF THE GSA ESTIMATE WAS BELOW THREE MILLION, THE KO IS NOT "BREAKING THE LAW". HE MAY HAVE HAD A BUDGET LIMIT OR DID NOT HAVE THE TIME TO RE-COMPETE AMONGST ALL QUALIFIED 8A FIRMS. ALSO THERE IS A PROCEDURE AVAILABLE TO SOLE SOURCE ABOVE THE THRESHOLDS. INSTEAD OF REDUCING THE REQUIREMENT THE KO MIGHT HAVE CONSULTED WITH THE SBA FIRST TO SEE IF AWARD MAY HAVE BEEN MADE IN SPITE OF THE INITIAL RESULTS.

By joel hoffman on Tuesday, October 10, 2000 - 05:16 pm:

According to the GAO Decision, the Agency was in violation of the law. However, the protestor lacked standing, so there was no redress. qui's questions are interesting. I'd surmise that the CO thought he was within the law by reducing the award to under $3 million. That may answer the "why?" question. As to "...what is done when they are caught redhanded like this?" - I don't know. Happy Sails!


Happy Sails! Joel

By joel hoffman on Tuesday, October 10, 2000 - 05:20 pm:

Pardon me. It appears to be a Court of Federal Claims Decision, not GAO. Happy Sails!

By Linda Koone on Wednesday, October 11, 2000 - 07:49 am:

In reading this case in its entirety, I believe the CO was primarily guilty of poor documentation to support his decisions and actions.

The Court wouldn't permit certain documents/ affidavits to be considered in deciding this case. I expect that this documentation might have better supported the COs actions.

I certainly would expect the value of a new contract would be less than $3M when a prior contract for double the effort was valued at $3.2M.

Also, I don't think the COs lawyer would have argued this case in the Court of Federal Claims if he/she believed the CO was 'breaking the law'.

By bob antonio on Wednesday, October 11, 2000 - 08:40 am:

Linda:

Below is the page for all of the decisions involved in the case. The first is the decision where the Court found that the contracting officer violated the law. The second shows the attempt by the government attorney to keep damaging testimony and documentation from the court's view. The Court rules in favor of the protester and admits the evidence.

http://www.wifcon.com/courtdecprej.htm

One of the historical problems of the 8(a) program is the concentration of awards to a small number of 8(a) firms. In part, this is caused by congressional expectations that--once into the government offices--these firms are expected to market themselves to the program offices. That is part of the 8(a) development process.

After the "Wedtech" scandal, the law was changed to add competition thresholds. (However, marketing in government offices was still recognized as part of the 8(a) development process.) Since then, I have found several instances where contracting officers adjust requirements with the assistance of the program office to avoid competition thresholds.

Several years ago, I did a report with a table in it that shows the results of procurements in the 8(a) program before and after the legislation that set the competition thresholds. Before the thresholds, there were several 8(a) procurement above $3 million and after the thresholds there were none. I was going to write an article on it but qui beat me to it.

By C MERCY on Wednesday, October 11, 2000 - 09:09 am:

I BELIEVE THE RESULTS BOB MENTIONS ARE THE DIRECT RESULT OF HOW THE COMPETITIVE 8A PROCESS IS ENGINEERED,NOT MERELY BECAUSE THE THRESHOLDS EXIST. IN SOLE SOURCE 8A PROCUREMENTS KOS AND TECHNICAL STAFFS CAN FULLY EXPLORE A FIRMS CAPABILITIES BEFORE MAKING AN OFFER. IN THE COMPETITIVE 8A SCENARIO ITS THE SBA WHO PROVIDES THE FIRMS. ALMOST ALWAYS ITS EVERY FIRM THAT CLAIMS A SIC. THERE IS LITTLE OR NO MARKET RESEARCH,MANY SOLICITATIONS HAVE TO BE ISSUED AND EXTENSIVE EVALUATIONS HAVE TO BE CONDUCTED. IF AGENCIES WERE PERMITTED TO SELECT 8AS FOR THE COMPETITION,USING THE SAME DUE DILIGENCE ONE MIGHT EXPECT WHEN SEEKING A SINGLE SOURCE, MANY MORE COMPETITIVE 8A PROCUREMENTS WOULD SEE THE LIGHT OF DAY.OR IF THE SBA WOULD PROVIDE FIRMS WHICH WERE TRULY INTERESTED,COMPETENT AND ABLE, THE SAME RESULT WOULD BE EXPECTED. COMPETITIVE 8AS ARE AVOIDED BECAUSE THERE IS RISK ENOUGH WITH OUT MULTIPLYING THE EFFORT REQUIRED AS THINGS NOW STAND.I KNOW SEVERAL KOS WHO LOVE THE IDEA OF COMPETITIVE 8A PROCUREMENTS BUT HAVE BEEN BURNED IN THE PAST BY HAVING TO DEAL WITH MANY ,MANY FIRMS WHO MAY HAVE BEEN ABLE TO PERFORM SOME GOVERNMENT CONTRACTS BUT NOT THE ONES THEY PROPOSED.

By Kennedy How on Wednesday, October 11, 2000 - 01:14 pm:

I've never really liked 8(a) set-asides when it was forced onto me; it was a much better deal when we actively went out and did the market research on our own to determine who was qualified to perform what we wanted on the SoW. There were a couple of instances where the PM office found a technically qualified 8(a) contractor to do System Tech Support work; they wanted him, we can do a 8(a) set-aside, the command and SBA were happy. But, it was too good to be true, because before we could effect a contract, the guy graduated from the program! In the second instance, we got into a dispute over size classification, and the didn't qualify then.

Our biggest hurdles were the SBA offices who nominated these firms, sometimes, we determined that they aren't the best qualified to do the work, but SBA didn't always see eye-to-eye with that opinion.

By bob antonio on Friday, October 13, 2000 - 07:50 am:

C Mercy and Kennedy:

So it is the SBA that, in effect, is corrupting the competitive process?

By C MERCY on Friday, October 13, 2000 - 09:34 am:

NO . ITS THAT THEY SELECT WHICH FIRMS THE AGENCY CAN DEAL WITH. I RECALL ONE PROCUREMENT WHERE THEY SENT US A LIST OF THIRTY SIX 8A COMPANIES FOR A 3.2M FOOD SERVICE BUY. THE SELECTION FACTORS USED IN PREPARING THE LIST,I LEARNED LATER,WERE ALPHABETIC LISTING. SEVERAL OF THE FIRMS ON THE LIST HAD NEITHER THE INTEREST NOR THE ABILITY TO COMPETE. ALL I WAS SUGGESTING WAS THAT COMPETITIVE 8A SOLICITATIONS WOULD BE INCREASED IF THE AGENCY,AND NOT THE SBA, WERE PERMITTED TO ESTABLISH THE LIST.PERHAPS A RULE REQUIRING AGENCIES TO INCLUDE NOT LESS THAN FIVE 8A FIRMS ON THE LIST MIGHT BE USEFUL.. ALSO,ALTHOUGH I SUPPORT THE IDEA OR REQUIRING 8A COMPETITION, I THINK IT ALSO NEEDS TO BE MENTIONED THAT PROPOSAL PREPARATION CAN BE EXPENSIVE AND MANY OF THE FIRMS SELECTED BY THE SBA CAN SIMPLY NOT AFFORD TO PARTICIPATE IN EVERY ACQUISITION THAT IS WHY I THINK LIMITED COMPETITIONS AMONGST QUALIFIED 8A FIRMS MAKES SENSE.ALSO,WITH FEWER PLAYERS THE POSSIBILITY OF ANY ONE 8A FIRM WINNING, ARE INCREASED.

By joel hoffman on Friday, October 13, 2000 - 10:00 am:

Cap't Mercy, yes, the SBA often sends us the wrong contractors. However, I can and do reject their selection when appropriate. Unfortunately, sometimes only after the 8(a) submits its proposal do I discover a sham set-up or non-competent choice. We go back and find another firm.

We also name request firms we know can do the job.
SBA cooperates, as long as the workload is being distributed equitably.

There are many nice things about competitive RFP set-asides. We can get some price competition to avoid the lengthy sole source negotiation requirements. We can eliminate sham teaming arrangements. Through discussions, I can help shape the offerors' technical and management approach, resolve scope of work technical questions, reduce or resolve errors and omissions, etc. We have had some good success with RFP's when we were willing to meaningfully evaluate information and take the time to conduct discussions. (C:All Caps is hard for me to read) (: Happy Sails! joel

By C MERCY on Friday, October 13, 2000 - 10:28 am:

As I said,Ilike competitive 8a procurements. Another advantage is the ease of setting up 8a MAS.

By Kennedy How on Friday, October 13, 2000 - 01:00 pm:

Bob,

I don't know if I would say SBA corrupts the competetive process, unless you are referring to 8(a) set-asides as a defacto sole-source situation. And, in that instance, under our preference for CICA, I would agree. Certainly, under 8(a) set aside process I was familiar with (and alluded to in my last paragraph), we'd not start out as an 8(a), but that was what it came back as when it finished it's presolicitation routing. And, we're talking spare parts widgets here. It seemed like our SBA office wasn't really doing us a service when you kept getting duds. It seemed to be an adversarial relationship.

Conversely, if I could have gotten a handful of 8(a) firms to compete, I wasn't stuck with the one and only; at least I had options, and could sell it to SBA for responsibility purposes; without undue delay. I fail to see what advantage it would be to award a contract to somebody who was of technically marginal ability solely under 8(a) auspices. I can understand the need to nurture 8(a)s when they compete against the regular world, but I don't really see it in 8(a) vs 8(a).

Kennedy

By Rob Bristow on Wednesday, October 18, 2000 - 12:03 pm:

Contracting officers breaking the law? What nonsense is this? I would guess that lazy program officials were calling the shots and the contracting office went along to get along.

8(a) sole source vs 8(a) competitive? These issues while entertaining do not represent small business contracting. The facts are that small business is getting the short end of the stick no matter what Kelman and big business say. And the contracting officers are not pulling any strings.

With the House at least talking about helping small business, Kelman fires away that the legislation will cost the taxpayers "billions of dollars each year." Faced with the prospect that small business will reclaim all of the credit card purchases, Kelman predicts the demise of the program because program officials don't know diddly about how to handle small business transactions. As to why small business is suffering, Kelman maintains that small business is having problems because they developed a niche in federal contracting for reasons other than customer satisfaction. Harvard paradigm?