WSG Article: GAO issues another noteworthy protest decision on joint venture experience

GAO issues another noteworthy protest decision on joint venture experience

May, 2023 - Quigley Patrick R

We recently reported¹ on the Government Accountability Office's (GAO) decision in AttainX.² As we explained, the AttainX decision is noteworthy because the GAO held that, notwithstanding the fact that a solicitation does not require examples from the joint venture itself or the individual members, the Small Business Administration's (SBA) regulations require the agency to evaluate each joint venture member individually when the joint venture itself does not demonstrate that it has the required experience.

Request for reconsideration

Subsequent to the GAO's decision in AttainX, the intervenor-awardee, MiamiTSPi, LLC — which is an 8(a) small business joint venture — filed a request that the GAO reconsider its decision. The GAO has now denied that reconsideration request in a recent published decision³ and, in doing so, has provided additional clarification on the issue.

Specifically, in its reconsideration request, MiamiTSPi argued that the GAO's AttainX decision failed to consider the portion of the SBA regulations that prohibits the agency from negatively evaluating the 8(a) partner of the joint venture for its lack of relevant experience.

MiamiTSPi contended that the regulations required the agency to consider the similar experience of each joint venture partner as being that of the joint venture itself. Based on this contention, MiamiTSPi argued that the agency properly considered the two example projects of one of the joint venture partners and reasonably attributed that experience to the joint venture itself.

GAO's denial of the reconsideration request

The GAO, however, disagreed with MiamiTSPi, stating:

[C]ontrary to the requestor's contention, nothing in the rule prohibits an agency from applying any evaluation or responsibility criteria to the 8(a) partner of the joint venture. Instead, the rule provides that the agency may not require the 8(a) partner to meet the same evaluation or responsibility criteria as that of other offerors. In this respect, the clarifying second portion of the rule is logically meant to explain the application of the preceding sentence, not to nullify it. Read together, the rule directs agencies to "consider work done and qualifications held individually by each partner to the joint venture," and, in that consideration, prohibits agencies from requiring the protégé or 8(a) participant partner to individually meet the same criteria as the mentor or non-8(a) partner.⁴

The GAO went on to state: "This conclusion is consistent with the SBA regulations, which do not 'mandate a specific degree of consideration for the mentor and the protégé firm,' but do 'require agencies to consider the experience of both the mentor and protégé members of the joint venture.'"

According to the GAO, such a result was the goal of the SBA rule promulgating the regulation, i.e., that the small business protégé have at least some experience in the type of work to be performed.

Republished with permission. This article, "GAO issues another noteworthy protest decision on joint venture experience" was originally published inBuildSmart by Bradley Arant Boult Cummings LLP on May 19, 2023, and republished by Westlaw on May 24, 2023.