w91rus14t0286 Gao Level Protest Against Fedbid Discrimination of Veteran Owned Small Business

SENDING FEDBID TO THE GAO

Discrimination On the MarketplaceAgencies that we know and don’t trust to not Violate the Competition in Contracting Act Violate the Small Business Act Contracting Officers discriminating against Small Businesses across the world by using FEDBID And believing they will get away with it

W91RUS14T0286

GAO LEVEL PROTEST U.S. ARMY

APG - Huachuca Installation

HERE’S HOW »»

7/25/2014 71--FURNITURE - Federal Business Opportunities: Opportunities

https://www.fbo.gov/index?s=opportunity&mode=form&id=460354ce2b4f07b9c9affe761fce06a0&tab=core&_cview=1 1/3

Solicitation Number:

W91RUS14T0286

Notice Type:

Combined Synopsis/Solicitation

Buyers: Login | Register Vendors: Login | Register Accessibil ity

Complete View

Original Synopsis

Combined

Synopsis/Solicitation

Jul 23, 2014

5:16 pm

Changed

Jul 25, 2014

11:51 am

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Synopsis:

Added: Jul 23, 2014 5:16 pm Modified: Jul 25, 2014 11:51 am Track

Changes

AMENDMENT NOTICE:This is a combined synopsis/solicitation for

commercial items prepared in accordance with the format in FAR

Subpart 12.6, as supplemented with additional information included in

this notice.The solicitation number is W91RUS14T0286 and is issued

as an invitation for bids (IFB), unless otherwise indicated herein.The

solicitation document and incorporated provisions and clauses are

those in effect through Federal Acquisition Circular FAC 2005-75. The

associated North American Industrial Classification System (NAICS)

code for this procurement is 337127 with a small business size

standard of 500.00 employees.This requirement is unrestricted and only

qualified offerors may submit bids.The solicitation pricing on

www.FedBid.com will start on the date this solicitation is posted and will

end on 2014-07-31 12:00:00.0 Eastern Time or as otherwise displayed

at www.FedBid.com.FOB Destination shall be in the Special Shipping

Instructions.

The APG - Huachuca Installation requires the following items, Purchase

Description Determined by Line Item, to the following:

LI 001: CHAIR, ITEM# 53815 FFP CHAIR, ITEM# 53815 1 CHAIR ITEM#

53815, FABRIC EBONY, FRAME MAHOGANY W/2" THICK SEAT,

STANDARD SIZE OF 22" WIDE. FOB: Destination, 10, EA;

LI 002: MOBILE LECTERN MOHOGANY ITEM# 90304 FFP MOBILE

LECTERN MOHOGANY ITEM# 90304 MOBILE LECTERN W/SHELF

ITEM# 90304, MULIT USE MOBILE LECTERN MAHOGANY, THREE-IN-

ONE TOP SEPARATES FOR USE AS A PORTABLE TABLE TOP

LECTERM AND BASE CAN BE USE FOR A AV CART. FOB: Destination,

1, EA;

LI 003: CONFRENCE TABLE ITEM#40850 FFP CONFRENCE TABLE

ITEM#40850 TABLE CONFRENCE 10' ITEM# 40850 AMERICAN

MAHOGANY, MUST BE OVEL 120' W X 48' D X 29.5' H TO FIT IN

CONFRENCE ROOM. FOB: Destination, 1, EA;

LI 004: CHAIR AIR GRID W/HEAD REST ITEM# 56475 FFP CHAIR AIR

GENERAL INFORMATION

Notice Type:


Original Posted Date:

July 23, 2014

Posted Date:

July 25, 2014

Response Date:

July 31, 2014

Original Response Date:

July 31, 2014

Archiving Policy:

Automatic, on specif ied date

Original Archive Date:

January 27, 2015

Archive Date:

January 27, 2015

Original Set Aside:

N/A

Set Aside:

N/A

Classification Code:

71 -- Furniture

71--FURNITURESolicitation Number: W91RUS14T0286Agency: Department of the ArmyOffice: FedBidLocation: FedBid.com -- for Department of Army procurements only

Notice Details Packages Interested Vendors List Print Link

https://www.fbo.gov/index?s=main&mode=list&tab=list

https://www.fbo.gov/index?s=getstart&mode=list&tab=list

https://www.fbo.gov/index?s=generalinfo&mode=list&tab=list

https://www.fbo.gov/index?s=opportunity&mode=form&id=460354ce2b4f07b9c9affe761fce06a0&tab=core&tabmode=list

https://www.fbo.gov/index?s=agency&mode=list&tab=list

https://www.fbo.gov/index?s=privacy&mode=list&tab=list

https://www.fbo.gov/?s=main&tab=list&mode=list&focus=blogin

https://www.fbo.gov/?s=main&tabmode=list&_lsys=buyer&tab=register2&subtab=step1&mode=list

https://www.fbo.gov/?s=main&tab=list&mode=list&focus=vlogin

https://www.fbo.gov/?s=main&mode=list&tab=register&subtab=step1

https://www.fbo.gov/accessibility

https://www.fbo.gov/index?s=opportunity&mode=form&tab=core&id=3d3becc4b301fc50d7142b61cc849bbc&_cview=0

https://www.fbo.gov/index?s=opportunity&mode=form&tab=core&id=460354ce2b4f07b9c9affe761fce06a0&_cview=0

https://www.fbo.gov/utils/viewDifferences?class=notice_description&id=8ccc3b89f87d6897ea0ab70ff9ba9704&compared_to=0ea9faf6e0e664835bfdbe8b8ad26277

https://www.fbo.gov/?s=main&mode=list&tab=list

http://www.acquisition.gov/

http://www.egov.gov/

http://www.usa.gov/

https://www.fbo.gov/index?s=opportunity&mode=form&id=460354ce2b4f07b9c9affe761fce06a0&tab=core&tabmode=list&=

https://www.fbo.gov/index?s=opportunity&mode=form&id=460354ce2b4f07b9c9affe761fce06a0&tab=documents&tabmode=list

https://www.fbo.gov/index?s=opportunity&mode=form&id=460354ce2b4f07b9c9affe761fce06a0&tab=ivl&tabmode=list

https://www.fbo.gov/index?s=opportunity&mode=form&id=460354ce2b4f07b9c9affe761fce06a0&tab=core&tabmode=list&print_preview=1

https://www.fbo.gov/notices/460354ce2b4f07b9c9affe761fce06a0



GRID W/HEAD REST ITEM# 56475 CHAIR AIRGRID W/HEADREST

BLACK ITEM# 56475, CHAIR MUST HAVE HIGH BACK W/MESH

INSTANT LIFTSEAT ADJUSTMENT TILT SEAT MECHANISM

W/ALUMINUM FRAME, WITH LIFE TIME GUARANTEE. FOB: Destination,

17, EA;

Solicitation and Buy Attachments

***Question Submission: Interested offerors must submit any questions

concerning the solicitation at the earliest time possible to enable the

Buyer to respond. Questions must be submitted by using the 'Submit a

Question' feature at www.fedbid.com. Questions not received within a

reasonable time prior to close of the solicitation may not be

considered.***

For this solicitation, APG - Huachuca Installation intends to conduct an

online competitive reverse auction to be facilitated by the third-party

reverse auction provider, FedBid, Inc. FedBid has developed an online,

anonymous, browser based application to conduct the reverse auction.

An Offeror may submit a series of pricing bids, which descend in price

during the specified period of time for the aforementioned reverse

auction. APG - Huachuca Installation is taking this action in an effort to

improve both vendor access and awareness of requests and the

agency's ability to gather multiple, competed, real-time bids.All

responsible Offerors that respond to this solicitation MUST submit the

pricing portion of their bid using the online exchange located at

www.FedBid.com. There is no cost to register, review procurement data

or make a bid on www.FedBid.com.Offerors that are not currently

registered to use www.FedBid.com should proceed to www.FedBid.com

to complete their free registration. Offerors that require special

considerations or assistance may contact the FedBid Helpdesk at 877-

9FEDBID (877-933-3243) or via email at [email protected].

Offerors may not artificially manipulate the price of a transaction on

www.FedBid.com by any means. It is unacceptable to place bad faith

bids, to use decoys in the www.FedBid.com process or to collude with

the intent or effect of hampering the competitive www.FedBid.com

process.Should offerors require additional clarification, notify the point of

contact or FedBid at 877-9FEDBID (877-933-3243) or

[email protected] of FedBid: Buyers and Sellers agree to

conduct this transaction through FedBid in compliance with the FedBid

Terms of Use. Failure to comply with the below terms and conditions

may result in offer being determined as non-responsive.

It is also required any contractor doing business with the government

under contract be registered in the System for Award Management (SAM)

website url: https://www.sam.gov/portal/public/SAM/

QUOTES/BIDS are to be submitted on FedBid ONLY or they will not be

accepted.

Additional Info:

www.fedbid.com (b-639078_01, n-144987)

Contracting Office Address:

2133 Cushing St, Fort Huachuca, AZ 85613

Place of Performance:

Special Shipping Instructions.

-

-

https://marketplace.fedbid.com/fbweb/fbobuyDetails.do?token=%3D%3DwBKxmaVGYR925EWDALP%2F%2FiQAAAAAHeAAgAgTFCGg%2FFzzqQbJAAyVXBA0Or

http://www.fedbid.com/



For Help: Federal Service Desk Accessibility

Point of Contact(s):

Name: Client Services, Title: Client Services, Phone: 1.877.933.3243,

Fax: 703.422.7822, Email: [email protected];

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https://www.fbo.gov/utils/help_desk


GAO PRE - AWARD PROTEST W91RUS14T0286 FEDBID, b-639078_01, n-144987

DEPARTMENT of the ARMY’s

APG - Huachuca Installation LATVIAN CONNECTION LLC

Latvian Connection LLC 1083 Vine St. No. 503 Healdsburg, CA 95448

Tel: 001 707 385 9344

July 25, 2014

BY REGISTERED EMAIL

General Counsel

Government Accounting Office

441 G Street, NW

Washington DC 20548

Email: [email protected]

Attn: Procurement Law Control Group, Room 1139

RE: Pre Award Protest against FEDBID.COM and the U.S. ARMY, APG - Huachuca Installation for violating the Small

Business Act and Competition in Contracting Act for RFQ W91RUS14T0286 (FEDBID b-639078_01, n-144987) by

using FEDBID.com

Dear Procurement Law Group: Latvian Connection General Trading and Construction LLC, (“ LC LLC”) A Veteran Owned Business, 1083 Vine St. No.

503, Healdsburg, CA, tel: [001 707 385 9344].

Email: [[email protected]]¹ , (KUWAIT CAGE: SGM59 DUNS: 534749622,

CALIFORNIA DUNS 830587791 CAGE 5GLB3, submits this PRE- AWARD Protest against the DEPARTMENT OF

ARMY’s, APG - Huachuca Installation, for conducting a solicitation (Exhibit 1) on a commercial platform that has

suspended Veteran Owned Small Business Latvian Connection so that we may not bid and have been effectively excluded

from a Federal Competition when Latvian Connection LLC is not suspended or debarred from bidding on Federal

Contracts by the Army electing to utilized a Federal Contractor that discriminates against VETERAN OWNED SMALL

BUSINESSES.

The solicitation has delivery in the United States and APG - Huachuca Installation is circumventing the

COMPETITION IN CONTRACTING ACT and the Small Business Act by not setting aside this solicitation with a value

under $ 150,000 and by utilizing a commercial service that discriminates against VETERAN OWNED BUSINESSES as

FEDBID does (Exhibit 2 and 3) where not all bidders who wish to bid may do so.

The APG - Huachuca Installation are utilizing a commercial service which has discriminated against a Veteran Owned

Small Business for asking question directly to the contracting officers where FEDBID has not abided by the Federal

Acquisition Regulations of posting the contracting offices POC details and instead has inserted itself into a government

position and in the process has interfered with communications to the contracting officer directly and causing significant

delays.

¹ ¹In accordance with 4 C.F.R. § 21.1 (c ) (1), the relevant electronic mail address for this protest is

[email protected] ( Representative for the Protester Latvian Connection General Trading and

Construction LLC) KUWAIT DUNS 534749622 and CAGE SGM59; CALIFORNIA DUNS 830587791 CAGE 5GLB3

² The Contracting for this procurement is FEDBID.com [email protected] Point of Contact(s):

Name: Client Services, Title: Client Services, Phone: 1.877.933.3243, Fax: 703.422.7822, Email: [email protected];

And DEPARTMENT of the ARMY APG - Huachuca Installation, 2133 Cushing Street BLGD 61801 RM 2633, Ft. Huachuca, AZ 85613

mailto:[email protected]



2 | P a g e JULY 24, 2014




Per FAR 33.103 Protests to the agency

( 2 ) Latvian Connection LLC 1083 Vine St. No. 503 Healdsburg, CA 95448

The U.S. Government Accountability Office (“GAO”) should sustain this protest, stay the performance of the

Contract, and direct the Department of the Army to not utilize a commercial service that doesn’t allow U.S. Small Businesses

to bid upon Federal Opportunities. The GAO should direct that until FEDBID.com ceases discriminating against Veteran

Owned U.S. Small Business, Latvian Connection LLC, and after FEDBID’s business practices assimilate the Small Business

Act, the Federal Acquisition Regulations, and the Competition in Contracting Act, that FEDBID is not to be utilized by the

U.S. Department of the Army or any other Federal Agency.

The GAO has stated in Exhibit 4:

Competition in federal procurement contracting has become a topic of increased congressional

and public interest, in part because of alleged misconduct involving noncompetitive contracts and

reports that the number of noncompetitive contract actions has increased. President Obama also

emphasized competition in his March 4, 2009, memorandum on government contracting.

Additionally, prominent officials within the Department of Defense (DOD), which accounts for

some 70% of federal procurement spending per year, have expressed their commitment to

reducing DOD’s use of noncompetitive contracts.

The Competition in Contracting Act (CICA) of 1984 generally governs competition in federal

procurement contracting. Any procurement contract not entered into through the use of

procurement procedures expressly authorized by a particular statute is subject to CICA. CICA

requires that contracts be entered into after “full and open competition through the use of

competitive procedures” unless certain circumstances exist that would permit agencies to use

noncompetitive procedures. Full and open competition can be obtained through the use of sealed

bids, competitive proposals, or other procures defined as competitive under CICA (e.g.,

procurement of architectural or engineering services under the Brooks Act). Full and open

competition under CICA also encompasses “full and open competition after exclusion of

sources,” such as results when agencies engage in dual sourcing or set aside acquisitions for small

businesses.

Any contract entered into without full and open competition is noncompetitive, but

noncompetitive contracts can still be in compliance with CICA when circumstances permitting

other than full and open competition exist. CICA recognizes seven such circumstances, including

(1) single source for goods or services; (2) unusual and compelling urgency; (3) maintenance of

the industrial base; (4) requirements of international agreements; (5) statutory authorization or

acquisition of brand-name items for resale; (6) national security; and (7) contracts necessary in

the public interest. CICA also allows agencies to use “special simplified procedures” when

acquiring goods or services whose expected value is less than $150,000, or commercial goods or

services whose expected value is less than $6.5 million ($12 million in emergencies).

The Army excluding competition by utilizing a Federal Contractor and allowing that contractor FEDBID to put a defacto

debarment on Latvian Connection LLC and other U.S. Small Businesses IS NOT one of the 7 reasons that the Army could be

authorized to use a Federal Contractor that has interfered with the Procurement Integrity that allows all eligible bidders to bid.

Is it in the public interest to allow FEDBID to suspended illegally an undetermined number of U.S. Small Business from using

a platform upon which to bid on Federal Contracts. That is Bid Rigging and this bid rigging is at a Congressional Level and

involves the GAO, DoD Agencies like the U.S. Army, U.S. Navy, U.S. Marines, National Park Service, and Department of

3 | P a g e JULY 24, 2014




Interior. This bid rigging also involves Board Members of FEDBID whose past service in the U.S. Military are being used to

get the Army to exclusively utilize FEDBID (not even fair used of the Reverse Auction Sites available to the United States

Government ) and that Army Organizationsl Conflict of Interest is retired Army General George Casey. (Exhibit 12) General

Casey sits on the Board of FEDBID that discriminates against a U.S. Veteran Owned Small Business that served in Iraq with

General Casey in the same U.S. Embassy that General Casey worked in – Baghdad, Iraq (Green Zone ).

The GAO stated in Exhibit 10, regarding Reverse Auctions that:

All four agencies contracted with FedBid, a fee-based contractor, to conduct their reverse auctions during fiscal year 2012.

Agency officials stated that contracting officers are required to follow established contracting procedures and rules. The

contracting officer must also establish the basis for award. For example, the contracting officer can make the award to the

lowest bidder or make the award based on a cost/technical trade-off process where it is in the best interest of the government

to consider other than the lowest price. In fact, on the basis of our analysis of a random sample of auctions, we estimate that

24 percent of all reverse auction contracts awarded by the four agencies in fiscal year 2012 were not awarded to the lowest

bidding vendor.

24 % of awards going to an other than low bidder in a Reverse Auction is recognizing the bid-rigging, but failing to let

Congress know that bid-rigging on an international scale is the also known within FEDBID as ATP. This is not a technical

trade off – this is bid rigging.

Since the GAO are part of the problem that has failed to ensure that Veteran Owned Small Businesses are not subjected to bid-

rigging of FEDBID and that Lowest Price Technically Acceptable is the rule and not bid-rigging, REPOSTS, steering, pre-

selection, and other procurement irregularities of FEDBID, then it is no wonder that FEDBID believe they have the authority

to suspend a U.S. Small Business from bidding on Federal contracts.

INTERESTED PARTY STATUS

As discussed below LATVIAN CONNECTION LLC was denied competing for solicitation , W91RUS14T0286

FEDBID b-639078_01, n-144987 (Exhibits 1). LATVIAN CONNECTION LLC incorporates all the below facts and

Exhibits into this “Interested Party Status” section. Further, if this protest is sustained and Department of Army’s APG -

Huachuca Installation’s W91RUS14T0286, FEDBID b-639078_01, n-144987 evaluates LATVIAN CONNECTION

LLC’s proposal, then LATVIAN CONNECTION LLC, responsible offeror – will have a reasonable chance of winning

the Contract. Therefore, LATVIAN CONNECTION LLC is an actual offeror whose direct economic interest is affected

by the award of the Contract and hence, an interested party. 31 U.S.C. § 3551 (2000); FAR 33.101; 4 C.F.R. §

4 | P a g e JULY 24, 2014




21.0(a)(2006); Designer Assoc. , Inc.,B-293226, FEB 12, 2004 C.P.D. ¶ 114 at 2. This is a PRE-Award Protest filed

before the bid due in date of July 31, 2014.

TIMELINESS OF THIS PROTEST

The Pre-Award protest against the Department of Army’s APG - Huachuca Installation posted on FBO July

23, 2014 and is timely if filed the bid due in date of July 31, 2014:

§ 21.2 Time for filing:

(a)(1) Protests based upon alleged improprieties in a solicitation which are apparent prior to bid opening or the time set for

receipt of initial proposals shall be filed prior to bid opening or the time set for receipt of initial proposals. In

procurements where proposals are requested, alleged improprieties which do not exist in the initial solicitation but which

are subsequently incorporated into the solicitation must be protested not later than the next closing time for receipt of

proposals following the incorporation.

(2) Protests other than those covered by paragraph (a)(1) of this section shall be filed not later than 10 days after the basis

of protest is known or should have been known (whichever is earlier), with the exception of protests challenging a

procurement conducted on the basis of competitive proposals under which a debriefing is requested and, when requested,

is required. In such cases, with respect to any protest basis which is known or should have been known either before or as

a result of the debriefing, the initial protest shall not be filed before the debriefing date offered to the protester, but shall

be filed not later than 10 days after the date on which the debriefing is held.

The basis is this protest is that the Department of the Army has known of the anti-competitive procedures of FEDBID by

suspending Veteran Owned Businesses from utilizing the Reverse Auction site, FEDBID.com when Latvian Connection LLC

is not suspended or debarred from bidding on FEDERAL contracts. FEDBID seems to believe that they can participate in

the Federal Marketplace and discriminate against users of the Federal Market place by discriminating and barring access to

FEDERAL purchase of which FEDBID is not selling – the US Government is selling, and FEDBID is arbitrarily blocking

access to Veteran Owned Small Businesses for whistleblowing activities of reporting, using GAO Protests, FEDBID.com

violation of Federal Laws.

The new interim rules are part of a temporary pilot program that is in effect through Jan. 1, 2017. While the twin rules apply to different agencies — the DFARS provisions apply only to the U.S. Department of Defense, NASA and the Coast Guard, while the FAR provisions cover all other federal agencies except the intelligence community — their terms are virtually identical. The rules amend FAR Subpart 3.9 and DFARS Subpart 203.9 to add protections for contractor or subcontractor employees against reprisal for certain whistleblowing activities. In summary, the new whistleblower protection regulations: (1) provide protections to whistleblowers disclosing certain sorts of information; (2) set out the entities to whom whistleblowers may disclose information; (3) provide a process for whistleblowers to file complaints if they believe they were discriminated against for their disclosure of information, and set out the remedies available to whistleblowers found to have been discriminated against; and (4) require employers to notify their employees of these protections and remedies. First, under the new interim rules, contractors cannot discriminate against whistleblowers as a reprisal for disclosing information that the employee reasonably believes is evidence of any of the following:

a gross mismanagement of a federal contract;

a gross waste of federal funds;

http://www.law360.com/agencies/u-s-department-of-defense

http://www.law360.com/agencies/u-s-department-of-defense

http://www.law360.com/agencies/national-aeronautics-and-space-administration

5 | P a g e JULY 24, 2014




an abuse of authority relating to a federal contract (where “abuse of authority” is defined as an

“arbitrary and capricious exercise of authority that is inconsistent with the mission of the executive

agency ... or the successful performance of a[n agency] contract [or grant]”);

a substantial and specific danger to public health or safety; or

a violation of a law, rule, or regulation related to a federal contract (including competition for or

negotiation of a contract). FAR § 3.908-3(a); DFARS § 203.903(1). In particular, the last category — violations of a law, rule, or regulation related to a federal contract — is broad enough to cover all manner of activities. Prohibited reprisals include discharge, demotion or other discrimination against the employee. Under these clauses, a contractor may not take action against an employee even if that reprisal is undertaken at the request of an executive branch official, unless the request takes the form of a nondiscretionary directive that is within the authority of the executive branch official making the request. The new regulations do not, however, provide any rights to disclose classified information not otherwise already provided by law. Second, the new interim rules set out the entities to whom whistleblowers may disclose the above-listed types of information. Contractors may be somewhat heartened to learn that their own management employees are on the list of individuals to whom a potential whistleblower may choose to disclose; the list of other entities who can receive information is robust, however. Whistleblowers may disclose evidence to any of the following entities:

A member of Congress or a representative of a committee of Congress;

An inspector general;

The U.S. Government Accountability Office;

A federal employee responsible for contract oversight or management at the relevant agency;

An authorized official of the U.S. Department of Justice or other law enforcement agency;

A court or grand jury; or

A management official or other employee of the contractor or subcontractor who has the responsibility

to investigate, discover or address misconduct. Latvian Connection LLC filed a GAO Pre-Award Protest against FEDBID.com and the Department of the Navy on June 28, 2014 (Exhibit 5)

PRE-AWARD GAO PROTEST N3596A14RCCS017 and FEDBID 627729 - LATVIAN CONNECTION

LLC_ (FEDBID and NAVY) (FILED JUNE 28, 2014)

On July 8, 2014, FEDBID.com sent Latvian Connection LLC a notice of suspension from using their reverse auction site.

This is discrimination for reporting the violations of Federal Law by FEDBID and the United States Navy to the GAO, which

now has a GAO case number of B-410000. ( Exhibit 6)

The FEDERAL Government is having its buyers of services and supplies discriminated against from bidding by the

retaliatory actions of FEDBID.com.

Latvian Connection LLC requests that this GAO Protest be referred to the Small Business Administration for their

comments.

http://www.law360.com/agencies/government-accountability-office

http://www.law360.com/agencies/u-s-department-of-justice

6 | P a g e JULY 24, 2014




19.201 General policy. (a) It is the policy of the Government to provide maximum practicable opportunities in its acquisitions to small business,

veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns. Such concerns must also have the maximum practicable opportunity to participate as subcontractors in the contracts awarded by any executive agency, consistent with efficient contract performance. The Small Business Administration (SBA) counsels and assists small business concerns and assists contracting personnel to ensure that a fair proportion of contracts for supplies and services is placed with small business.

Latvian Connection LLC requests that this GAO Protest be referred to the Small Business Administration for their comments.

FACTUAL GROUNDS OF THE PROTEST

1. The RFQ W91RUS14T0286 FEDBID (b-639078_01, n-144987) was posted on www.fbo.gov on July 23, 2014

and was issued by the Department of ARMY’s APG - Huachuca Installation. The value of the solicitation is less than

$ 150,000 and has a performance location of Fort Huachuca, AZ 85613. The Small Business Act applies. Latvian

Connection LLC should be competing against only other U.S. Small Businesses and is unable to compete at all due to the

Army’s conducting a solicitation using the services of a commercial company that discriminates against U.S. Small

Businesses and this solicitation is not set aside for U.S. Small Business Only. The white collar criminal actors are still

entrenched in the Pentagon and in the Army Contracting Officers who try to utilize a commercial platform for their white

collar criminal activities instead of www.fbo.gov and use only lowest priced – technically acceptable award system.

The Department of the Army knows of 2 cases where U.S. Small Business concerns have been suspended from using

FEDBID.com, arbitrarily and in retaliation for filing GAO protests or questioning the bid-rigging methodology of ATP.

There are other Reverse Auction services and the Department of the Army does not have to engage in using what appears to

be a monopoly for the use of reverse auctions in light of the GAO’s report that FEDBID is hardly a competitive platform.

(Exhibit 10)

II. LATVIAN CONNECTION LLC’s Proposal

LATVIAN CONNECTION LLC, a U.S. Veteran Owned Business whose owner is a Retired US Air Force Master

Sergeant that served 28 years in the military and served in Iraq and has offices in California and Kuwait. Latvian

Connection LLC was denied an opportunity to bid by the Department of the Army’s pandering use of the monopoly –

FEDBID.com. (Exhibit 13) AND NINTY FOUR PAGES OF U.S. FEDERAL PROCUREMENTS THAT LATVIAN

CONNECTION LLC CANNOT BID UPON DUE TO THE INTERFERANCE OF FEDBID.COM BY ILLEGALLY

BARRING (DESCRIMINATING) AGAINST VOSB LATVIAN CONNECTION LLC

Request of a ruling by the Comptroller General of the United States

LATVIAN CONNECTION LLC specifically requests that the GAO recommend that the solicitation of

W91RUS14T0286 FEDBID b-639078_01, n-144987 be conducted without utilizing the Reverse Auction site

FEDBID.com when there are other platforms that do not discriminate against Veteran Owned Small Businesses. The

GAO should recommend that the Department of ARMY’s APG - Huachuca Installation post a copy of the solicitation

http://www.fbo.gov/

http://www.fbo.gov/

7 | P a g e JULY 24, 2014




for full and open competition; not conduct it using Reverse Auction and that the Small Business Act be honored, and the

solicitation is set aside for U.S. Small Businesses that EXCLUDES all foreign companies and Large Businesses.

FEDBID.com (Exhibit 2) is a platform for U.S. Contracting Officer to circumvent the Federal Laws of the United States.

1. Routinely violate the Competition in Contracting Act by not posting Justifications and Approvals for Sole Brands

2. Routinely violates the Small Business Act for purchases inside the United States for routine commodity items with a

solicitation value of less than $ 150,000

3. In violation of FAR 15.206, routinely REPOST and not award to low bidder and fails to post the Contracting Officer’s

Amendment as to why the solicitation number has remained the same.

4. Fails to abide by archiving policies for Federal solicitations.

5. Assumes the Contracting Authority of the U.S. Army without proper delegation of a SF1402 from the contracting

officer and lists itself on FBO where the contracting office and phone number belong for the United States Agency’s

contracting office.

REQUEST FOR HEARING OR CONFERENCE AND PROTECTIVE ORDER

If the issues in this case cannot be resolved on the basis of the documents requested, then LATVIAN CONNECTION

LLC requests a hearing on all of the matters set forth above. 4 C.F.R. § 21.1 (d)(2008). Latvian Connection LLC does not

request a protective order. LATVIAN CONNECTION LLC EXPRESSLY REQUEST THAT THE AGENCY NOT BE

GRANTED ANY EXPEDITE OF THIS GAO LEVEL PROTEST. Latvian Connection LLC wants the Agency Report

and Latvian Connection LLC REQUESTS this Protest referred to the Small Business Administration.

LEGAL GROUNDS OF PROTEST

41 CFR §§ 60‐

300.5(a) Affirmative Action and Nondiscrimination Obligations of Contractors and Subcontractors Regarding

Disabled Veterans, Recently Separated Veterans, Other Protected Veterans and Armed Forces Service Medal

Veterans: This contractor and subcontractor shall abide by the requirements of 41 CFR 60‐

300.5(a). This regulation prohibits discrimination against qualified protected veterans,

The CEO of Latvian Connection LLC is one of those “Other Protected Veterans and Armed Forces Service Medal

Veterans” (Exhibit 7) and is now being discriminated against by Subcontractor FEDBID.com from gaining access to bid

competitively on Federal Procurements. Yes General Casey, you are part of a company discriminating against Iraq Vets

who own businesses in the United States.

When using simplified acquisition procedures, agencies must promote competition “to the maximum extent practicable.”

10 U.S.C. § 2304(g)(3) (2012). In meeting this requirement, agencies must make reasonable efforts, consistent with

efficiency and economy, to afford all eligible and interested vendors an opportunity to compete. S.D.M. Supply, Inc., B-

271492, June 26, 1996, 96-1 CPD ¶ 288 at 4.

FEDBID is a contractor of the Federal Government ( Exhibit 8) and must have in their contract with the Federal

Government that they may not discriminate and will abide by Federal Laws and Regulations, or it would appear they are

in breach of their Federal Contract.

8 | P a g e JULY 24, 2014




There is Overwhelming Evidence that LATVIAN CONNECTION LLC was prejudiced by the Department of ARMY’s

APG - Huachuca Installation use of FEDBID.com that has, without any contracting authority, suspended a U.S.

Veteran Owned Business from bidding on Federal Contracts – a defacto unofficial debarment regarding

W91RUS14T0286 FEDBID, b-639078_01, n-144987.

I. Latvian Connection LLC has been unfairly denied the opportunity to compete. (Exhibits 2 & 4)

II. The legal grounds that support this Pre-Award Protest are:

(the overarching principle codified in the Competition in Contracting Act is that agencies provide impartial,

fair, and equitable treatment for each contractor); Dubinsky v. United States, 43 Fed. Cl. 243, 259 (1999)

(making offerors aware of the rules of the game in which they seek to participate is fundamental to fairness

and open competition). (Finlen Complex, Inc., B-288280, October 10, 2001)

When using simplified acquisition procedures, agencies must promote competition “to the maximum extent

practicable.” 10 U.S.C. § 2304(g)(3) (2012). In meeting this requirement, agencies must make reasonable

efforts, consistent with efficiency and economy, to afford all eligible and interested vendors an opportunity to

compete. S.D.M. Supply, Inc., B-271492, June 26, 1996, 96-1 CPD ¶ 288 at 4.

The GAO has stated that in conducting simplified acquisitions to ensure that the procurements are conducted

consistent with a concern for fair and equitable competition and with the terms of the solicitation. Russell

Enters. of N. Carolina, Inc., B-292320, July 17, 2003, 2003 CPD ¶ 134 at 3.

The FEDBID buy FAR clauses that the Department of the Army selected state the following:

The selected Offeror must comply with the following commercial item terms and conditions. FAR 52.212-1, Instructions to

Offerors - Commercial, applies to this acquisition. The selected Offeror must submit a completed copy of the provision at 52.212-

3, Offeror Representations and Certifications - Commercial Items. FAR 52.212-4, Contract Terms and Conditions - Commercial

Items, applies to this acquisition. The following FAR clauses in paragraph (b) of FAR clause 52.212-5, Contract Terms and

Conditions Required To Implement Statutes or Executive Orders-Commercial Items, will apply: 52.222-21, 52.222-26, 52.222-35,

52.222-36, 52.222-37, 52.225-13, 52.232-34. The full text of a FAR clause may be accessed electronically at

http://www.acqnet.gov/far.

Latvian Connection LLC meets all of these terms and conditions, yet cannot bid upon this solicitation due to the

contracting office electing to use a contractor, FEDBID, that has arbitrarily blocked Latvian Connection LLC from

bidding on the solicitation W91RUS14T0286 FEDBID, b-639078_01, n-144987.

It is deceitful, and disingenuous for the U.S. Army to make an assumption that ALL U.S. Small Businesses are able to

compete for this requirement when the Army is aware that FEDBID has suspended some Federal bidders. FEDBID.com

has a responsibility to uphold the Federal Laws of the United States and the Small Business Act and DoD Directives

instead of aiding what appears to be a violation of Federal Law – The Small Business Act and the Competition in

Contracting Act. FEDBID.com are DoD contractor (Exhibit 2) to Latvian Connection LLC and this DoD company along

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=gao_comptroller_general&docid=f:288280.txt

9 | P a g e JULY 24, 2014




with Board Member Retired General Casey and Obama OFPP appointee, Joseph Jordan, who abandoned his

Presidential post appear to be providing a platform by which discriminate against U.S. Small Businesses by not

allowing Latvian Connection LLC to bid upon the opportunity solicitation W91RUS14T0286 FEDBID, b-

639078_01, n-144987 by illegally suspending Latvian Connection LLC from bidding on a Federal solicitation.

The Competition in Contracting Act states:

The Competition in Contracting Act of 1984 generally requires that contracting agencies obtain full and open competition

through the use of competitive procedures. 41 U.S.C. sect. 253(a)(1)(A) (2006). In furtherance of this goal, agencies are

required to use reasonable methods to publicize their procurement needs. Kendall Healthcare Prods. Co., B-289381, Feb. 19,

2002, 2002 CPD para. 42 at 6. The official public medium for providing notice of contracting actions by federal agencies is

the FedBizOpps website, which has been designated by statute and regulation as the government-wide point of entry. 15

U.S.C. sect. 637(e); 41 U.S.C. sect. 416; FAR sections 2.101, 5.101(a)(1), 5.201(d). The notice provided by an agency must

include an "accurate description" of the property or services to be purchased, sufficient to provide prospective offerors with

the ability to make an informed business judgment as to whether to request a copy of the solicitation, see 41 U.S.C. sect.

416(b)(1); TMI Management Sys., Inc., B-401530, Sept. 28, 2009, 2009 CPD para. 191 at 3.

According to the GAO in a synopsis of COMPTROLLER GENERAL – KEY EXCERPTS case regarding (Ideal Fastener

Corporation, B-404206, January 11, 2011) (pdf)

The official public medium is www.fbo.gov NOT FEDBID.com This solicitation is not fair and open, it is excluding

bidders that the U.S. Government hasn’t suspended from bidding under the due processes afforded contractors under FAR

Part 9, but instead this is a solicitation that is being conducted as Other than Fair and Open without a Justification and

Approval for depending upon the discriminatory contractor FEDBID. By Federal statute and regulations, this solicitation

should be conducted using only www.fbo.gov .

III. The U.S. ARMY’s APG - Huachuca Installation is being Unreasonable

By the Department of ARMY’s APG - Huachuca Installation not conducting a solicitation using a bidding method that

doesn’t involve utilizing Reverse Auction site FEDBID.com, and electing to conduct the solicitation as Lowest Priced,

Technically Acceptable has harmed Latvian Connection LLC in that we cannot bid due to being blocked by the monopoly

that the U.S. Government appears to pander to. The Department of the Army is required, by law, to compete the

solicitation according to the Competition in Contracting Act, and nowhere in CICA is it mentioned that Reverse Auctions

are a method to comply with the CICA. The Small Business Act applies to this purchase and for a Veteran Owned Small

Business to be denied to bid, by another Federal Government contractor is an interference into the procurement process.

http://www.wifcon.com/cgen/404206.pdf


http://www.fbo.gov/

http://www.fbo.gov/

10 | P a g e JULY 24, 2014




By using ineffective Reverse Auctions (Exhibit 10), the APG - Huachuca Installation are being unreasonable in using

FEDBID.com which discriminates against U.S. Small Businesses and Veteran Medal holders.

President Obama’s Executive Office of the President, Office of Management and Budget issued a Memorandum on the

subject of a April 25, 2012 meeting of the Small Business Procurement Group (Exhibit 11) and this memo from Joseph G.

Jordan, Administrator for Federal Procurement Policy, and Karen G. Mills, Administrator of the Small Business

Administration state that there were “immediate steps to ensure small businesses are utilized to the maximum extent

possible.” Maximizing Opportunities for Small Businesses under the Simplified Acquisition Threshold “ Pursuant to

longstanding statutory requirements in the Small Business Administration Act, agencies are required to automatically set

aside work for small businesses that is equal to or less that the value of the Simplified Acquisition Threshold (SAT)

(generally $ 150,000) unless the contracting officer determines the “rule of two” cannot be met– ie. There is not a

reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in

terms of market prices, quality, and delivery. There are more than 5 U.S. Small Businesses in the Middle East Region,

SMI-USA LLC, Trade Links USA LLC, American General Trading, and Latvian Connection LLC.

Note FEDBID.com employee’s name. Joseph Jordan in President Obama’s Memo. This is what POGO refers to as the

revolving door.

Mr. Jordan and Ms Mills go on to say that a third-party analysis of the Federal Procurement Data System suggest that a

significant amount of work under the SAT is not going to small businesses, including for products and services in

industries where small businesses are typically well represented. This suggests that opportunities for small businesses are

being lost, and that agencies must take additional steps to consistently apply set-asides in the manner prescribed by law

Latvian Connection LLC is being discriminated against 2 revolving door opportunists: U.S. Army General Casey

(FEDBID board member) and now Obama defector Joseph Jordan.

IV. LATVIAN CONNECTION LLC LLC Has Been Prejudiced

Prejudice requires a reasonable likelihood that LATVIAN CONNECTION LLC LLC would have been

awarded the Contract based on a fair evaluation of LATVIAN CONNECTION LLC LLC’s bid – but has been

prevented from bidding due to the arbitrary suspension of a non-government entity that is neither a Government

Agency or a SF1402 holding Contracting Officer. Such a determination that Latvian Connection LLC would be the

low bidder is not susceptible to a precise mathematical calculation; rather, prejudice requires only that “but for the

agency’s actions, the protestors would have had a reasonable chance of receiving the award. Anthem Alliance for

Health, Inc., TRICARE Management Activity – Reconsideration, B-278189.5, July 13, 1998, 98-2 CPD 66. A

reasonable possibility of prejudice therefore is sufficient to sustain the protest. United Int’l. Eng’g., Inc., B-245448.3,

Jan 29, 1992, 92-1 C.P.D. ¶ 122. Europe Displays, Inc., B-297099. Latvian Connection LLC has been prejudiced by

APG - Huachuca Installation violation of the Competition in Contracting Act and limiting competition to exclude

Latvian Connection LLC and by circumventing the Small Business Act in that ALL eligible bidders have access to

Federal Contracts.


11 | P a g e JULY 24, 2014




REQUEST FOR DOCUMENTS

LATVIAN CONNECTION LLC LLC requests that the following materials be included in the agency

report, pursuant to 4 C.F.R. § 21.1(d)(2008):

ALL communications from APG - Huachuca Installation to FEDBID.com

Small Business Office managers Memos regarding use of FEDBID.com

Memos from Army’s ERDC - U.S. Army Engineer Research and Development Center direction to

Army Contracting Officers to utilize FEDBID.com A copy of the Justification and Approval to compete using other than Full and Open competition that

excludes FEDBID users suspended by FEDBID, but under FAR Part 9

The SF 2579 – Small Business Coordination Record

The bid abstract of W91RUS14T0286 FEDBID, b-639078_01, n-144987

REQUEST FOR RELIEF AND CONCLUSION

LATVIAN CONNECTION LLC LLC requests that the Agency take corrective action and conduct the solicitation as a

Lowest Priced, Technically Acceptable solicitation on www.fbo.gov or FEDCONNECT.com; post an amendment that

FEDBID will not be utilized for this solicitation or other Army solicitations, and conduct the solicitation according to the

Competition in Contracting Act, the Small Business Act (s), and the Federal Acquisition Regulations without utilizing

FEDBID.

We also request that LATVIAN CONNECTION LLC LLC be reimbursed the costs of filing and pursuing its protest,

including reasonable protest preparation fees. Bid Protest Regulations 4 C.F.R. § 21.8(d)(1) (2010).

Under the Competition in Contracting Act of 1984, the GAO may recommend that protest costs be reimbursed where

they find that an agency’s action violated a procurement statute or regulation. 31 U.S.C. § 3554(c)(1) (2010). The

GAO’s Bid Protest Regulations provide that, where the contracting agency decides to take corrective action in response to

a protest, the GAO may recommend that the protester be reimbursed the costs of filing and pursuing its protest, including

reasonable attorneys’ fees. 4 C.F.R. § 21.8(e) (2010). The GAO has stated that it “does not mean that costs should be

reimbursed in every case in which an agency decides to take corrective action; rather, a protester should be reimbursed its

costs where an agency unduly delayed its decision to take corrective action in the face of a clearly meritorious protest.

Griner’s-A-One Pipeline Servs., Inc.--Costs, B-255078.3, July 22, 1994, 94-2 CPD ¶ 41 at 5.

Respectfully submitted,

__________________________

Keven L. Barnes

CEO

Latvian Connection LLC

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Keven L. Barnes

From: Quality Assurance <[email protected]>Sent: Tuesday, July 08, 2014 5:20 PMTo: [email protected]: Quality Assurance; Brad Hungerman; LegalSubject: Account Status - LATVIAN CONNECTION GENERAL TRADING AND CONSTRUCTION

LLC [DUNS: 830587791]

Good morning, The purpose of this communication is to inform you that, effective immediately, the LATVIAN CONNECTION GENERAL TRADING AND CONSTRUCTION LLC [DUNS: 830587791] account with FedBid, Inc. has been suspended in accordance within our right to terminate service, as referenced in FedBid’s Terms of Use:

System and Business Integrity: Latvian Connection has taken actions to repeatedly and purposely interfere with FedBid's business relationships.

Right to Terminate: Latvian Connection's use of the FedBid marketplace demonstrates that Latvian Connection has not used (and does not intend to use) the FedBid marketplace as required in the FedBid Terms of Use.

As the facilitator of transactions between Buyers and Sellers on www.FedBid.com, it is critical that all activity on the FedBid marketplace is conducted uniformly and professionally according to the Terms of Use. These recent actions have been unprofessional, and we cannot tolerate actions that may substantially and negatively impact our customers and our business. Please contact our Legal department with any questions; I have provided our Deputy General Counsel’s information for your reference below. Jeffrey M. Shrader Vice President, Deputy General Counsel FedBid, Inc. Direct: 703.839.7025 [email protected] Thank you, Kim Clark Quality Assurance Supervisor FedBid, Inc. Direct: 703-839-7010 [email protected]��

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employee or agent responsible to deliver it to the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please immediately notify the sender by email and destroy the original message. Thank you in advance for your cooperation.

CRS Report for CongressPrepared for Members and Committees of Congress

Competition in Federal Contracting: An Overview of the Legal Requirements

Kate M. Manuel Legislative Attorney

June 30, 2011

Congressional Research Service

7-5700 www.crs.gov

R40516



Summary Competition in federal procurement contracting has become a topic of increased congressional and public interest, in part because of alleged misconduct involving noncompetitive contracts and reports that the number of noncompetitive contract actions has increased. President Obama also emphasized competition in his March 4, 2009, memorandum on government contracting. Additionally, prominent officials within the Department of Defense (DOD), which accounts for some 70% of federal procurement spending per year, have expressed their commitment to reducing DOD’s use of noncompetitive contracts.

The Competition in Contracting Act (CICA) of 1984 generally governs competition in federal procurement contracting. Any procurement contract not entered into through the use of procurement procedures expressly authorized by a particular statute is subject to CICA. CICA requires that contracts be entered into after “full and open competition through the use of competitive procedures” unless certain circumstances exist that would permit agencies to use noncompetitive procedures. Full and open competition can be obtained through the use of sealed bids, competitive proposals, or other procures defined as competitive under CICA (e.g., procurement of architectural or engineering services under the Brooks Act). Full and open competition under CICA also encompasses “full and open competition after exclusion of sources,” such as results when agencies engage in dual sourcing or set aside acquisitions for small businesses.

Any contract entered into without full and open competition is noncompetitive, but noncompetitive contracts can still be in compliance with CICA when circumstances permitting other than full and open competition exist. CICA recognizes seven such circumstances, including (1) single source for goods or services; (2) unusual and compelling urgency; (3) maintenance of the industrial base; (4) requirements of international agreements; (5) statutory authorization or acquisition of brand-name items for resale; (6) national security; and (7) contracts necessary in the public interest. CICA also allows agencies to use “special simplified procedures” when acquiring goods or services whose expected value is less than $150,000, or commercial goods or services whose expected value is less than $6.5 million ($12 million in emergencies).

Issuance of orders under task order and delivery order (TO/DO) contracts is not subject to CICA, although award of TO/DO contracts is. However, the Federal Acquisition Streamlining Act (FASA) of 1994 established a preference for multiple-award TO/DO contracts; required that agencies provide contractors “a fair opportunity” to compete for orders in excess of $3,000 under multiple-award contracts; and authorized the Government Accountability Office (GAO) to hear protests challenging the issuance of task or delivery orders that increase the scope, period, or maximum value of the underlying contract. The National Defense Authorization Act (NDAA) for FY2008 further limited the use of single-award TO/DO contracts. It also specified what constitutes a “fair opportunity to be considered” for orders in excess of $5.5 million under multiple-award contracts and granted GAO jurisdiction to hear protests of orders valued in excess of $10 million. While the provision authorizing GAO to hear such protests regarding the orders of civilian agencies sunset in May 2011, GAO recently found that it has jurisdiction over these protests because the NDAA for FY2008 amended FASA to provide that all limitations on GAO’s jurisdiction over task and delivery order protests expired in May 2011, not just its authority over protests of task and delivery orders valued in excess of $10 million. The 111th Congress enacted legislation extending the sunset date for GAO’s jurisdiction over protests of orders valued in excess of $10 million issued by defense agencies until September 30, 2016 (P.L. 111-383, §825).



Contents Introduction ................................................................................................................................1

Background ................................................................................................................................2

Contracts Not Subject to CICA ...................................................................................................6

Contracts Subject to CICA ..........................................................................................................7 Full and Open Competition Defined ......................................................................................7 Competitive Procedures Resulting in Full and Open Competition ..........................................8

“Full and Open Competition After Exclusion of Sources”................................................9 Circumstances Permitting Other Than Full and Open Competition ...................................... 11

Justifications & Approvals ............................................................................................ 13 “Special Simplified Procedures for Small Purchases” .......................................................... 15 Other Competition Requirements ........................................................................................ 18

Competition Requirements for Task and Delivery Order Contracts ............................................ 20

Legislative Initiatives ................................................................................................................ 23

Figures Figure 1. Contracts Subject and Not Subject to CICA..................................................................7

Figure 2. Simplified Acquisition Procedures: Competition Requirements at Various Price Thresholds ............................................................................................................................. 17

Figure 3. TO/DO Contracts: Competition Requirements at Various Price Thresholds ................. 23

Tables Table 1. Approving Officials for Noncompetitive Contracts in General...................................... 13

Table 2. Approving Officials for Noncompetitive Contracts Under the Simplified Acquisition Procedures .......................................................................................................... 17

Table 3. Types of Competition Under CICA .............................................................................. 18

Table A-1. Potential Applications and Limitations ..................................................................... 26

Appendixes Appendix. Circumstances Permitting Other Than Full and Open Competition Under

CICA..................................................................................................................................... 26

Contacts Author Contact Information ...................................................................................................... 29


Congressional Research Service 1

Introduction “Procurement” describes the process whereby the government obtains goods and services from private parties that it does not produce or provide for itself. Competition in government procurement means that the government determines from whom to buy goods and services—and thus with whom to contract—by “solicit[ing] or entertain[ing] offers from two or more competitors, compar[ing] them, and accept[ing] one based on its relative value.”1 Competition in federal procurement contracting has recently become a topic of increased congressional and public interest, in part because of high-profile incidents of alleged misconduct by contractors or agency officials involving noncompetitive contracts and reports that the number of noncompetitive contract actions by the federal government has increased.2 Hearings in the 110th and 111th Congresses addressed agencies’ alleged failures to compete contracts properly,3 and members enacted or proposed legislation addressing reported deficiencies in the laws governing competition in federal contracting, or agencies’ compliance with these laws.4 President Obama also emphasized competition in his March 4, 2009, memorandum on government contracting.5 Additionally, prominent officials within the Department of Defense (DOD), which accounts for

1 Ralph C. Nash, Jr., Steve L. Schooner, Karen R. O’Brien-DeBakey, and Vernon J. Edwards, The Government Contracts Reference Book: A Comprehensive Guide to the Language of Procurement 109-110 (2d ed. 2007). 2 See, e.g., Robert O’Harrow, Jr., FDA Takes End Run to Award Contract to PR Firm, Wash. Post, Oct. 2, 2008, available at http://www.washingtonpost.com/wp-dyn/content/article/2008/10/01/AR2008100103061.html (reporting that the U.S. Food and Drug Administration made a noncompetitive award to “ensure the work would go to a Washington public relations firm with ties to the FDA official arranging the deal”); Alice Lipowicz, Agencies Spent Billions of Stimulus Money on Noncompetitive Contracts, Fed. Computer Week, Oct. 15, 2009, available at http://fcw.com/Articles/2009/10/15/Agencies-spent-billions-from-stimulus-on-noncompetitive-nonfixedprice-contracts.aspx (reporting widespread use of noncompetitive contracts under the American Recovery and Reinvestment Act). 3 See, e.g., Failed Homeland Security Contracts: Hearings Before the Subcomm. on Mgmt., Investigations & Oversight of the House Comm. on Homeland Security, 110th Cong. (Sept. 17, 2008) (testimony of James L. Taylor, Deputy Inspector General, DHS) (noting that DHS did not comply with federal regulations when it awarded a sole-source contract to Chenega Technology Services Corporation); Contracting Revision Bills: Hearing before the Subcomm. on Government Mgmt., Organization & Procurement of the H. Comm. on Oversight & Government Reform, 110th Cong. (Feb. 27, 2008) (testimony of Paul A. Denett, Administrator, Office of Federal Procurement Policy) (highlighting recent executive branch efforts to increase competition in contracting). 4 See infra notes 120 to 131 and accompanying text. 5 The White House, Office of the Press Secretary, Government Contracting: Memorandum for the Heads of Executive Departments and Agencies, Mar. 4, 2009, available at http://www.whitehouse.gov/the_press_office/Memorandum-for-the-Heads-of-Executive-Departments-and-Agencies-Subject-Government-Contracting. This memorandum also called for the Director of the Office of Management and Budget to develop guidance to “govern the appropriate use and oversight of sole-source and other types of noncompetitive contracts and to maximize the use of full and open competition and other competitive procurement processes.” Id. This guidance was issued on October 27, 2009, and calls for agencies to focus on requirements development and outreach to potential vendors; use performance-based acquisitions and commercial solutions; evaluate alternative competition strategies for larger and more complex requirements; use strategic sourcing; ensure consistent maximization of competition at the task and delivery order level; give maximum practicable consideration to small businesses; limit the length of any noncompetitive contracts; ensure price reasonableness in noncompetitive contracts; regularly assess contractor performance under noncompetitive contracts; engage with the marketplace to determine how barriers to competition can be removed; and analyze the agencies’ largest “spend categories.” Executive Office of the President, Office of Management and Budget, Increasing Competition and Structuring Contracts for Best Results, Oct. 27, 2009, available at http://www.whitehouse.gov/omb/assets/procurement_gov_contracting/increasing_competition_10272009.pdf. The October memorandum also required agencies “reduce by at least 10 percent the combined share of dollars obligated through new contracts in FY 2010 that are … awarded non-competitively and/or receive only one bid in response to a solicitation or request for quote,” among other things. Id.



some 70% of federal procurement spending per year,6 have expressed their commitment to reducing DOD’s use of noncompetitive contracts.7

This report describes the competition requirements currently governing the procurement activities of federal agencies. It addresses (1) what contracts are subject to competition requirements; (2) what constitutes full and open competition for government contracts; (3) what is meant by “full and open competition after exclusion of sources”; (4) the circumstances permitting agencies to award contracts on the basis of other than full and open competition; (5) the “special simplified procedures for small purchases”; (6) the competition requirements for task order and delivery order (TO/DO) contracts; and (7) legislative reforms relating to competition. It also briefly describes the benefits and drawbacks of competition, situates recent reform efforts within their historical context, and discusses how the policy debates surrounding competition in federal contracting can shape legislative responses. It does not directly address so-called “public-private competitions” or “competitive sourcing targets” under the Federal Activities Inventory Reform (FAIR) Act or Office of Management and Budget (OMB) Circular A-76.8 Public-private competitions are conducted to determine whether government employees or private contractors will perform functions formerly performed by the government that have been identified as commercial and suitable for contracting out.9

Background The federal government has promoted competition between offerors seeking to meet its needs since at least 1781, when the Superintendent of Finance advertised in a local newspaper for proposals from potential suppliers of food for federal employees in Philadelphia.10 Then, as now, the government encouraged competition because of its reported benefits to the government and the general public. Proponents of competition note that when multiple offerors compete for the government’s business, the government can acquire higher quality goods and services at lower prices than it would acquire if it awarded contracts without competition. Proponents also note that competition helps to curb fraud because it allows for periodic changes in the vendors from which the government acquires goods and services, thereby limiting opportunities for government employees to enter into collusive agreements with their regular suppliers. Competition is similarly said to promote accountability by ensuring that contracts are entered into on their merits and not upon any other basis (e.g., familial or other relationships between contracting officers and

6 Federal Contract Awards by Major Contracting Agency 2009, available at http://www.usaspending.gov/fpds/tables.php?tabtype=t1&rowtype=f&subtype=a&sorttype=2008. 7 See, e.g., Gates Cites Acquisition Reform as One of Defense Department’s Greatest Challenges, 91 Fed. Cont. R. 71 (Feb. 3, 2009) (Gates’ mentioning “seeking increased competition” as one strategy for reforming DOD procurement); Office of the Undersecretary of Defense for Acquisition, Technology and Logistics, Review Criteria for the Acquisition of Services: Memorandum, Feb. 18, 2009, available at http://www.acq.osd.mil/dpap/policy/policyvault/USA002735-08-DPAP.pdf (memorandum from Shay D. Assad, Director of Defense Procurement, stating that the requirements of service contracts should be articulated in such a way as to provide for “maximum competition,” in general, and for “meaningful competition” for orders under multiple award contracts). 8 See FAIR Act, P.L. 105-270, 112 Stat. 2382 (1998) (codified at 31 U.S.C. § 501 note); Executive Office of the President, OMB, Performance of Commercial Activities: Circular A-76 Revised, May 29, 2003, available at http://a-76.nih.gov/a76_rev2003.pdf. 9 For more on public-private competitions generally, see CRS Report RL32079, Federal Contracting of Commercial Activities: Competitive Sourcing Targets, by L. Elaine Halchin. 10 James F. Nagle, A History of Government Contracting 49 (2d ed. 1999).



contractors). Further, because the government is said to acquire the highest quality goods and services at the lowest prices, proponents of competition note that competition helps government officials reassure citizens that their tax dollars are not spent wastefully. Finally, proponents of competition claim that citizens are less likely to perceive contracts as being awarded because of favoritism when there is competition.

Competition is not considered an unmitigated good by all, however, as is noted by those who advocate for certain limits on competition. Such commentators have pointed out that agency operations can be delayed by the time it takes to solicit and evaluate offers from eligible suppliers. These delays are reportedly especially harmful when agencies are contracting for goods or services for disaster responses or military operations. Moreover, because there are costs involved in agencies’ soliciting and evaluating offers, these commentators note that there comes a point when the government’s costs in competing contracts are greater than the savings it realizes from the lower price, higher quality goods it obtains through competition. It was, in part, for this reason that the drafters of the Competition in Contracting Act (CICA) of 198411 opted to require full and open competition rather than maximum competition. They reportedly considered language calling for “maximum competition,”12 but rejected it, in part, because “there is a point of diminishing return” with competition.13 Proponents of limits on competition further note that competition can increase the risk that government contractors will be unable to perform by allowing new contractors—who do not have experience meeting agencies’ needs or complying with the accounting and paperwork requirements imposed on federal contractors—to win government contracts. Agencies reportedly would prefer to deal with their incumbent contractors, assuming these contractors are competent, because they represent “known quantities” for the agencies.14

As the accompanying chronology illustrates, the federal government’s requirements for competition in contracting have periodically shifted as the government has variously sought to realize the benefits of competition or further other goals, such as the protection of national security in times of war or efficiency in agency operations, in its procurement activities. Armed conflicts, in particular, typically lead to relaxation of competition requirements, but often result in alleged abuses—such as “war profiteering” by contractors and waste of money on overpriced goods and services—that later lead to increased competition requirements.15

11 CICA was enacted as part of the Deficit Reduction Act of 1984, P.L. 98-369, §§ 2701-2753, 98 Stat. 1175 (1984). It amended the Armed Services Procurement Act of 1947; Federal Property and Administrative Services Act of 1949; Office of Federal Procurement Policy Act of 1974; and Truth in Negotiation Act (TINA) of 1962. It also created a statutory basis for the bid-protest function of the GAO. CICA’s competition requirements took effect on April 1, 1985. 12 Competition in Contracting Act of 1983: Hearings Before the Senate Comm. on Armed Services, 98th Cong., 1st Sess. 260-61 (1983). The guidelines for implementing some of President Obama’s recently proposed procurement reforms similarly call for “maximum practicable competition,” rather than “maximum competition.” See Executive Office of the President, Office of Management and Budget, Updated Implementing Guidance for the American Recovery and Reinvestment Act of 2009, at 52 (Apr. 3, 2009), available at http://www.whitehouse.gov/omb/assets/memoranda_fy2009/m09-15.pdf. 13 Competition in Contracting Act of 1983, supra note 12, at 304 (testimony of John Cibinic, Jr., Government Contracts Program, National Law Center, The George Washington University). 14 William S. Cohen, The Competition in Contracting Act, 14 Pub. Cont. L.J. 20-21 (1983/1984) (“Generally, agency officials have an easier time if they stay with the same contractor throughout the procurement process.”). 15 See id. at 6 (describing allegations of “war profiteering” in the aftermath of WWI); Competition in Contracting Act of 1984: Hearings on H.R. 5184 Before the Subcomm. on Legis. & Nat’l Security of the House Comm. on Gov’t Operations, 98th Cong., at 2 (1984) (statement by Representative Brooks) (describing how DOD spent $435 for “an ordinary claw hammer”).



Chronology 1809 Congress passes the first law requiring competition in federal procurement

contracting. This law established what came to be known as “formal advertising” as the preferred method for federal procurements by specifying that “all purchases and contracts for supplies or services … shall be made by open purchases, or by previously advertising for proposals.” (2 Stat. 536 (1809)).

1861 Congress reaffirms its commitment to formal advertising by passing a statute stating that “all purchases and contracts for supplies and services, ... except for personal services, ... shall be made by advertising a sufficient time previously for proposals respecting the same” unless immediate delivery is required due to “public exigencies.” (12 Stat. 220 (1861)).

1914-1918 The War Industries Board authorizes negotiated procurements, or procurements involving bargaining with the offerors after receipt of proposals. Such procurements are classified as noncompetitive.

1930 The War Policies Commission recommends that formal advertising be replaced by negotiated procurement during times of war. Congress does not enact this proposed change, but does recognize additional exceptions allowing use of negotiated procurement instead of formal advertising.

1939-1945 In December 1941, Congress passes the First War Powers Act, which authorizes the President to grant agencies that are “involved in the war” authority to enter into contracts “without regard to the provision of law relating to the making, performance, amendment, or modifications of contracts.” (55 Stat. 838 (1941)). Later in the war, the War Production Board prohibits agencies from using formal advertising without specific authorization to do so.

1945 A task force of the Procurement Policy Board, consisting of officers from the federal procuring agencies, recommends relaxing competition requirements to support the growth and sustainability of the industrial base.

1947 Congress passes the Armed Services Procurement Act (ASPA), which generally requires use of formal advertising but allows use of negotiated procurements when any of seventeen exceptions apply. These exceptions address things such as medicines or medical property; property purchased for authorized resale; perishable or nonperishable subsistence supplies; and property or services for which it is impracticable to secure competition. ASPA only applies to the procurement contracts of defense agencies.

1949 Congress passes the Federal Property and Administrative Services Act (FPASA), subjecting civilian agencies to requirements like those in ASPA. FPASA recognizes fifteen exceptions to formal advertising.

1982 Senators William V. Roth, Jr., Carl Levin, and William S. Cohen first introduce the Competition in Contracting Act (CICA) (S. 2127). Increased competition in contracting is also among the “Carlucci Initiatives,” 32 steps for reforming defense acquisitions announced by then Deputy Secretary of Defense Frank Carlucci.

1984 Congress passes CICA, requiring agencies to obtain “full and open competition through the use of competitive procedures” in their procurement activities unless otherwise authorized by law.

1990-1991 Military agencies reportedly experience difficulties in procuring commercial items for use during the Gulf War.

1994 Congress passes the Federal Acquisition Streamlining Act (FASA), which establishes a “preference” for the acquisition of commercial items in meeting agencies’ procurement needs. FASA also articulates competition requirements for task order and delivery order (TO/DO) contracts.

1996 Congress passes the Federal Acquisition Reform Act (FARA), which requires that agencies “obtain full and open competition ... in a manner that is consistent with the need to efficiently fulfill the Government’s requirements.” FARA also relaxes the



rules imposed on agencies’ purchases of commercial items.

2003 Congress passes the Services Acquisition Reform Act (SARA). SARA further relaxes the rules imposed upon procurement of commercial services.

2008 Section 843 of the National Defense Authorization Act for FY2008 limits the use of single-award task order/delivery order (TO/DO) contracts in excess of $100 million; grants GAO temporary jurisdiction over protests involving orders of $10 million or more; and specifies what constitutes a “fair opportunity to be considered” for orders in excess of $5 million.16

The current interest in competition in contracting is perhaps to be expected given developments in the 25 years since the enactment of CICA. CICA itself requires that agencies “obtain full and open competition through the use of competitive procedures” in all procurements not involving the use of procedures expressly authorized by a particular statute.17 CICA remains the foundation for the current competition requirements, but has been amended or supplemented by later laws that place efficiency in agency operations or other public benefits on par with competition, or expand agencies’ ability to use “special simplified methods” for contracting for commercial items. The Federal Acquisition Streamlining Act (FASA) of 1994, for example, establishes a “preference” for the procurement of commercial items, which are generally not subject to full and open competition under CICA.18 FASA was followed by the Federal Acquisition Reform Act (FARA) of 1996, which placed increasing emphasis on efficiency in agency operations by requiring that the Federal Acquisition Regulation (FAR) be amended to “ensure that the requirement to obtain full and open competition is implemented in a manner that is consistent with the need to efficiently fulfill the Government’s requirements.”19 FARA and the Services Acquisition Reform Act (SARA) of 200320 also relaxed the rules governing agencies’ acquisition of commercial items. More recently, the Emergency Economic Stabilization Act (EESA) of 2008 authorized the Secretary of the Treasury to use other than full and open competition upon determining “that urgent and compelling circumstances make compliance with [the competition] provisions contrary to the public interest.”21 This provision was designed to ensure that competition requirements, among other things, did not slow the Treasury Department’s contracting for services that would help stabilize U.S. financial markets and the banking system.22

16 The values contained in this chronology are those given in the statute as it was enacted. They do not reflect any subsequent adjustments made for inflation. 17 10 U.S.C. § 2304(a)(1)(A) & 41 U.S.C. § 253(a)(1)(A). Citations to CICA’s codification generally reference two titles of the United States Code: Title 10 governing procurements by defense agencies, NASA, and the Coast Guard, and Title 41 governing procurements by civilian agencies. The numbering and language of these sections are often—but not always—identical. 18 P.L. 103-355, § 8104, 108 Stat. 3391 (codified at 10 U.S.C. § 2377(a)-(b)); P.L. 103-355, § 8203, 108 Stat. 3391 (codified at 41 U.S.C. § 264b(a)-(b)) (“The head of each executive agency shall ensure that procurement officials in that executive agency, to the maximum extent practicable, acquire commercial items or nondevelopmental items other than commercial items to meet the needs of the executive agency.”). 19 P.L. 104-106, § 4101, 110 Stat. 642 (Feb. 10, 1996) (codified at 41 U.S.C. § 251 note). 20 P.L. 108-136, §§ 1401-1433, 117 Stat. 1664-1676 (Nov. 23, 2003) (codified, in part, at 41 U.S.C. § 264 note and 41 U.S.C. § 403). 21 P.L. 110-343, Title I, § 107(a), 122 Stat. 3773 (Oct. 3, 2008). The Secretary must transmit his or her determination, and its accompanying justification, to several congressional committees within 7 days. 22 Some contracts entered into without full and open competition under the EESA have been of types traditionally “considered high risk for the government.” Gov’t Accountability Office, Troubled Asset Relief Program: Additional Actions Needed to Better Ensure Integrity, Accountability, and Transparency 38 (Dec. 2008), available at http://www.gao.gov/products/GAO-09-161.



Contracts Not Subject to CICA Not all contracts—or even all procurement contracts—that agencies lawfully enter into are the result of full and open competition under CICA or an “exception” to it.23 Non-procurement contracts, such as those resulting from agencies’ use of other transaction authority (OTA) or similar authorities, are not subject to CICA because they are not procurement contracts, and CICA only applies to “procurement procedures.”24 OTA refers to agencies’ authority to enter into an “other transaction,” or “a form of contract ... that is not a procurement contract, grant, or cooperative agreement.”25 Only a few agencies, most notably the Departments of Defense, Transportation, Homeland Security, Health and Human Services, and Energy, have been granted OTA on a permanent or temporary basis so that they can contract for research and development (R&D) or prototypes of promising new technologies without full and open competition.26 Contracting for R&D or prototypes can be difficult because the uncertainties inherent in the development of new technologies make it hard to establish contract prices. Additionally, the companies best able to perform such contracts are often not regular government vendors and may be unwilling or unable to comply with the government’s procurement regulations. OTA helps to avoid these difficulties.

Also not subject to the requirement for full and open competition under CICA are those procurement contracts entered into through the “use of procurement procedures ... expressly authorized by statute.”27 There are numerous statutory provisions that allow agencies to use specific procurement procedures in certain circumstances, or otherwise allow them to limit competition for procurement contracts. One provision of the Consolidated Appropriations Act for FY2005, for example, allowed the U.S. Agency for International Development to place task orders with small or small disadvantaged businesses in lieu of providing a “fair opportunity” for all eligible firms to compete.28 Other provisions of this law allowed agencies to limit competition to certain groups or entities, notwithstanding CICA, or to enter into contracts without competition.29

23 In introducing the circumstances permitting use of noncompetitive procedures, CICA does not speak of “exceptions” to its competition requirements. See 10 U.S.C. § 2304(c) & 41 U.S.C. § 253(c). However, it uses the term “exception” in reference to these circumstances in its requirement for justifications and approvals of contracts awarded using other than full and open competition, and commentators commonly refer to the “CICA exceptions” when describing these circumstances. See 10 U.S.C. § 2304(f)(3)(B) & 41 U.S.C. § 253(f)(3)(B). 24 10 U.S.C. § 2304(a)(1)(A) & 41 U.S.C. § 253(a)(1)(A). 25 Government Contracts Reference Book, supra note 1, at 414. 26 For more on OTA generally, see CRS Report RL34760, Other Transaction (OT) Authority, by L. Elaine Halchin. 27 10 U.S.C. § 2304(a)(1)(A); 41 U.S.C. § 253(a)(1)(A). CICA also does not apply to contract modifications, including the exercise of price options evaluated as part of the initial competition, that are within the scope and under the terms of existing contracts, or orders under requirements contracts or definite-quantity contracts. 48 C.F.R. § 6.001(a)-(f). 28 P.L. 108-447, Division D, § 534(e), 118 Stat. 2809, 3006 (Dec. 8, 2004). 29 Id. at Division E, Title I, 118 Stat. 3040 (allowing the Bureau of Land Management to limit competition for contracts for hazardous fuel reduction activities to specified groups or entities, notwithstanding CICA); id. at Division E, Title II, 118 Stat. 3089 (allowing the National Gallery of Art to contract for the restoration and repair without competition).



Figure 1. Contracts Subject and Not Subject to CICA

Source: Congressional Research Service.

Contracts Subject to CICA Any procurement contract not entered into through the use of procedures expressly authorized by a particular statute, such as those described above, is subject to CICA.30 CICA requires that these contracts be entered into after “full and open competition through the use of competitive procedures” unless certain circumstances exist that would permit agencies to use noncompetitive procedures.31

Full and Open Competition Defined Under CICA, “full and open competition” results when “all responsible sources are permitted to submit sealed bids or competitive proposals.”32 A responsible source is a prospective contractor who (1) has adequate financial resources to perform the contract, or the ability to acquire such resources; (2) is able to comply with the required or proposed delivery or performance schedule; (3) has a satisfactory performance record; (4) has a satisfactory record of integrity and business ethics; (5) has the necessary organization, experience, technical skills, and accounting and operational controls, or the ability to obtain them; (6) has the necessary production, construction, and technical equipment and facilities, or the ability to obtain them; and (7) is otherwise qualified and eligible to receive an award under applicable laws and regulations.33

30 10 U.S.C. § 2304(a)(1)(A) & 41 U.S.C. § 253(a)(1)(A). 31 10 U.S.C. § 2304(a)(1)(A) & 41 U.S.C. § 253(a)(1)(A) (requirement for full and open competition); 10 U.S.C. § 2304(c) & 41 U.S.C. § 243(c) (circumstances allowing use of other than competitive procedures). 32 41 U.S.C. § 403(6). 33 41 U.S.C. § 403(7). For more information on the “responsibility” requirements applicable to prospective federal contractors, see CRS Report R40633, Responsibility Determinations Under the Federal Acquisition Regulation: Legal Standards and Procedures, by Kate M. Manuel.



Competitive Procedures Resulting in Full and Open Competition Agencies meet CICA’s requirement for full and open competition by using one of the “competitive procedures” recognized under the act.34 CICA recognizes the following procedures as competitive:

1. Sealed bids. Sealed bids are offers submitted in response to invitations for bids (IFBs); opened publicly at a specified time and place; and evaluated without discussions with the bidders, with the contract being awarded to the lowest-priced responsible bidder.35 CICA requires that agencies solicit sealed bids if (1) time permits their solicitation, submission, and evaluation; (2) the award will be made on the basis of price and other price-related factors; (3) it is not necessary to conduct discussions with bidders about their bids; and (4) there is a reasonable expectation of receiving more than one sealed bid.36

2. Competitive Proposals. Agencies are to use competitive proposals whenever “sealed bids are not appropriate” in light of the previous four factors.37 Competitive proposals are offers received in response to requests for proposals (RFPs). RFPs generally provide for discussion or negotiation between the government and at least those offerors within the “competitive range,” with the contract being awarded to the responsible offeror whose proposal represents the “best value” for the government.38

3. Combinations of competitive procedures. These include procedures like two-step sealed bidding. With two-step sealed bidding, the first step consists of the submission, evaluation and, potentially, discussion of technical proposals from each bidder with no pricing involved. In the second step, sealed bids are submitted only by those who submitted technically acceptable proposals during the first step.

4. Procurement of architectural or engineering services conducted in accordance with the requirements of the Brooks Act (40 U.S.C. §§541-559). The Brooks Act allows the selection of architects and engineers based upon their qualifications without consideration of the proposed price for the work. Awards must be made to the highest-ranked offeror unless a reasonable price cannot be agreed upon.

5. Competitive selection of basic research proposals resulting from a general solicitation and peer or scientific review of proposals, or from a solicitation conducted pursuant to 15 U.S.C. §638 (research and development contracts for small businesses).

34 CICA defines “competitive procedures” as those under which an agency enters into a contract pursuant to full and open competition. 41 U.S.C. § 403(5). 35 48 C.F.R. § 14.101(a)-(e). 36 10 U.S.C. § 2304(a)(2)(A)(i)-(iv) & 41 U.S.C. § 253(a)(2)(A)(i)-(iv). 37 10 U.S.C. § 2304(a)(2)(B) & 41 U.S.C. § 253(a)(2)(B). 38 48 C.F.R. §§ 15.000-15.102. “Best value” is determined by considering price and other factors included in the solicitation. The “competitive range” consists of those proposals having the greatest likelihood of award based on the factors and significant subfactors of the solicitation. FARA allows agencies to limit the competitive range to those offerors rated most highly based upon the solicitation’s criteria when “the number of offers that would otherwise be included in the competitive range ... exceeds the number at which an efficient competition can be conducted.” P.L. 104-106, § 4103, 110 Stat. 643-44 (Feb. 10, 1996) (codified at 10 U.S.C. § 2305(b) & 41 U.S.C. § 253b(d)).



6. Procedures established by the General Services Administration (GSA) for its multiple awards schedule program. Such procedures are recognized as competitive so long as participation in the GSA program is open to all responsible sources, and orders and contracts under GSA’s procedures result in the lowest overall cost alternative to meet the government’s needs.

7. Procurements conducted in pursuant to 15 U.S.C. §644. Section 644 addresses set-asides for small businesses, among other things. Such set-asides are competitive so long as all responsible businesses entitled to submit offers under Section 644 are permitted to compete.39

The sixth of these provisions is particularly significant because it allows agencies to use the so-called “Federal Supply Schedules” (FSS) or “GSA schedules.” These schedules enable agencies to take advantage of a “simplified process” for obtaining commercial supplies and services by issuing task or delivery orders directly to contractors listed on the schedules without issuing IFBs or RFPs.40

“Full and Open Competition After Exclusion of Sources”

Some competitions in which only certain contractors can compete nonetheless meet CICA’s requirement for full and open competition because CICA provides for “full and open competition after exclusion of sources.”41 “Full and open competition after exclusion of sources” occurs in two contexts: agencies’ “dual sourcing” initiatives and set-asides for small businesses.42

The defense agencies, in particular, have a lengthy history of dual sourcing, or distributing their contracts for particular goods or services among multiple manufacturers or suppliers in order to ensure that their operations are not vulnerable to the fortunes of individual companies.43 CICA recognizes this history, and the agency concerns underlying it, by stating that agencies

... may provide for the procurement of property or services covered by this section using competitive procedures but excluding a particular source in order to establish or maintain any alternative source or sources of supply for that property or service if the agency head determines that to do so—

(A) would increase or maintain competition and would likely result in reduced overall costs for such procurement, or for any anticipated procurement, of such property and services;

39 41 U.S.C. § 259(b)(1)-(5). 40 48 C.F.R. § 8.402(a). 41 10 U.S.C. § 2304(b) & 41 U.S.C. § 253(b). 42 10 U.S.C. § 2304(b)(1)-(2) & 41 U.S.C. § 253(b)(1)-(2). In practice, there is one important distinction between “full and open competition after exclusion of sources” for purposes of dual sourcing and for small business set-asides. Agencies engaged in dual sourcing need justifications and approvals for their awards, which are discussed in more detail below, while those setting aside procurements for small businesses generally do not. Compare 48 C.F.R. § 6.202(b)(1) (dual sourcing) with 48 C.F.R. § 6.203(b), § 6.204(b), § 6.205(b), § 6.206(b), and § 6.207(b) (small business set-asides). Only when agencies make sole-source awards in excess of $20 million under the authority of Section 8(a) of the Small Business Act are justifications and approvals required. See P.L. 111-84, § 811, 123 Stat. 2405-06 (Oct. 28, 2009). 43 See, e.g., Competition in Contracting Act, supra note 14, at 25-26.



(B) would be in the interest of national defense in having a facility (or a producer, manufacturer, or other supplier) available for furnishing the property or service in the case of a national emergency or industrial mobilization;

(C) would be in the interest of national defense in establishing or maintaining an essential engineering, research, or development capability to be provided by an educational or other nonprofit institution or a federally funded research and development center;

(D) would ensure the continuous availability of a reliable source of supply of such property or service;

(E) would satisfy projected needs for such property or service determined on the basis of a history of high demand for the property or service; or

(F) in the case of medical supplies, safety supplies, or emergency supplies, would satisfy a critical need for such supplies.44

Recently, Congress has sometimes mandated dual sourcing, especially by the Department of Defense (DOD), in order to ensure competition in future procurements.45

CICA similarly recognizes the history of setting aside acquisitions for competitions limited to small businesses in general, or to specific subcategories of small businesses, by allowing “procurement of property or services ... using competitive procedures, but excluding other than small business concerns.”46 The Small Business Act provides for such set-asides for small businesses generally; women-owned, service-disabled veteran-owned and Historically Underutilized Business Zone (HUBZone) small businesses; and small businesses owned and controlled by socially and economically disadvantaged individuals that are participating in the Business Development Program under Section 8(a) of the act.47 Set-asides can also be made for local firms during major disasters or emergencies under the authority of the Stafford Act (42 U.S.C. §5150).48

44 10 U.S.C. § 2304(b)(1)(A)-(F) & 41 U.S.C. § 253(b)(1)(A)-(F). CICA added the provisions currently in subsections (A)-(C) of these statutes, while FARA added those in (D)-(F). 45 See, e.g., P.L. 110-181, § 213, 122 Stat. 36 (Oct. 14, 2008) (requiring DOD to “ensure the obligation and expenditure in each such fiscal year of sufficient annual amounts for the continued development and procurement of 2 options for the propulsion system for the Joint Strike Fighter in order to ensure the development and competitive production for the propulsion system for the Joint Strike Fighter.”); Gates Says Tanker Competition May Resume in Late Spring; Murtha Endorses “Split Buy,” 91 Fed. Contr. R. 75 (Feb. 3, 2009). 46 10 U.S.C. § 2304(b)(2) & 41 U.S.C. § 253(b)(2). 47 See 15 U.S.C. §637(a) (set-asides for small disadvantaged businesses participating in the 8(a) Business Development Program); 15 U.S.C. § 637(m) (set-asides for women-owned small businesses); 15 U.S.C. § 644 (set-asides for small businesses generally); 15 U.S.C. § 657a (set-asides for HUBZone small businesses); 15 U.S.C. § 657f (set-asides for service-disabled veteran-owned small businesses). 48 The Stafford Act provides that “[i]n the expenditure of Federal funds for debris clearance, distribution of supplies, reconstruction, and other major disaster or emergency assistance activities ... carried out by contract or agreement with private [entities], preference shall be given, to the extent feasible and practicable, to those organizations, firms, and individuals residing or doing business primarily in the area affected by such major disaster or emergency.”



Circumstances Permitting Other Than Full and Open Competition By definition, under CICA, any procurement contract entered into without full and open competition is noncompetitive.49 This is not to say, however, that every procurement contract entered into without using competitive procedures is in violation of CICA. This is because CICA recognizes seven circumstances wherein agencies can use other than competitive procedures without violating the act’s competition requirements.50 Such circumstances involve the following:

1. Single source for goods or services: The property or services needed by the agency are available from only one responsible source and no other type of property or service satisfies the agency’s needs.

2. Unusual and compelling circumstances: The agency’s need for property or services is of such an unusual and compelling urgency that the government would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals.51

3. Maintenance of the industrial base: It is necessary to award the contract to a particular source or sources in order (1) to maintain a facility, producer, manufacturer, or other supplier so that the maintained entity will be available to furnish property or services in the case of a national emergency or to achieve industrial mobilization, or (2) to establish or maintain an essential engineering, research, or development capability to be provided by an educational or other nonprofit institution or a federally funded research and development center.

4. Requirements of international agreements: The terms of an international agreement or treaty between the United States and a foreign government or international organization, or the written directions of a foreign government reimbursing a federal agency for the cost of procuring property or services, effectively require the use of procedures other than competitive procedures.

5. Statutory authorization or acquisition of brand-name items for resale: A statute expressly authorizes or requires that the procurement be made through another executive agency or from a specified source, or the agency’s need is for brand-name commercial items for authorized resale.

6. National security: Disclosure of the agency’s procurement needs would compromise national security unless the agency is permitted to limit the number of sources from which it solicits bids or proposals.

7. Necessary in the public interest: The head of an executive agency determines that it is necessary in the public interest to use other than competitive procedures

49 10 U.S.C. § 2304(c) & 41 U.S.C. § 253(c). 50 10 U.S.C. § 2304(c) & 41 U.S.C. § 253(c). 51 An amendment made to CICA by Section 862 of the Duncan Hunter National Defense Authorization Act for FY2009 limits the duration of contracts awarded in reliance on this exception. The term of such contracts may not exceed the time necessary (1) to meet the unusual and compelling requirements of the work to be performed under the contract and (2) for the executive agency to enter into another contract for the required goods and services through the use of competitive procedures. Such contracts may not last longer than one year unless the head of the agency entering into the contract determines that exceptional circumstances apply. P.L. 110-417, § 862, 122 Stat. 4546 (Oct. 14, 2008).



in the procurement and notifies Congress in writing of this determination no less than 30 days before the award of the contract.52

These “exceptions” cover common situations where competition is not possible, or where the government values other objectives (e.g., maintaining the industrial base) more highly than full and open competition. The first exception, for example, allows what are commonly known as “sole-source awards.” By law, sole-source awards can be used only when there is a single responsible source and no other supplies or services will satisfy agency requirements. Although sole-source awards have been the subject of much reported concern recently, especially among those worried about the alleged increase in their use since FY2000,53 they can help agencies to efficiently meet their needs for goods and services when circumstances suggest there is little or no possibility of competition. The first exception also encompasses agencies’ acceptance of unsolicited research proposals, as well as follow-on contracts for continued development or production of major systems.54 The second exception covers many so-called contingency contracting situations, when the government needs to enter into contracts quickly in response to natural disasters or combat operations. The third exception addresses situations akin to dual sourcing, when the government attempts to manage the industrial base by ensuring that companies receive enough orders to stay in business. The fifth exception includes purchases that agencies are required to make through Federal Prison Industries or qualified nonprofit agencies for the blind or “severely disabled.” Table A-1 provides additional information on the circumstances permitting other than full and open competition, including potential application of and specific limits on these authorities.

Despite covering many common situations, CICA’s exceptions do not grant agencies unfettered discretion to contract for goods and services without using competitive procedures, however. This is because other provisions of CICA impose several conditions on agencies’ ability to rely on the exceptions permitting other than full and open competition. What is arguably the most important of these conditions—the requirement that agency contracting officials justify and obtain approval for their use of other than competitive procedures—is discussed in more detail in the following section. Other conditions (1) specify that poor agency planning cannot give rise to unusual and compelling urgency;55 (2) bar agencies from obtaining through other agencies goods or services that were not obtained in compliance with CICA;56 (3) prohibit agency heads from delegating their authority to determine that use of other than competitive procedures is necessary in the public interest;57 and (4) require agencies to “request offers from as many potential sources as is practicable under the circumstances” whenever relying on the exceptions for unusual and

52 10 U.S.C. § 2304(c)(1)-(7) & 41 U.S.C. § 253(c)(1)-(7). 53 See, e.g., U.S. House of Representatives, Comm. on Gov’t Reform—Minority Staff, Special Investigations Division, Dollars, Not Sense: Government Contracting Under the Bush Administration 9 (2006), available at http://oversight.house.gov/Documents/20060711103910-86046.pdf. 54 10 U.S.C. § 2304(d)(1)(A)-(B) & 41 U.S.C. § 253(d)(1)(A)-(B). A follow-on contract is a new contract awarded on a sole-source basis to a contractor that previously had a design or manufacturing contract for the same item, or previously performed the services being procured. It differs from an option under an existing contract, which gives the government a unilateral right to purchase additional supplies or services under a contract, or otherwise extend a contract. 55 10 U.S.C. § 2304(f)(5)(A) & 41 U.S.C. § 253(f)(5)(A). See, e.g., RBC Bearings Inc., Comp. Gen. Dec. B-401661 (Oct. 27, 2009) (sustaining a protest of sole-source contract award because the procuring agency’s own poor planning resulted in the need to limit competition). 56 10 U.S.C. § 2304(f)(5)(B) & 41 U.S.C. § 253(f)(5)(B). 57 10 U.S.C. § 2304(d)(2) & 41 U.S.C. § 253(d)(2).



compelling urgency or national security.58 The first condition is especially important because it precludes agencies from waiting until near the end of the fiscal year to procure items and then claiming unusual and compelling urgency because their appropriations are about to expire.59

Justifications & Approvals

CICA’s requirement that contracting officers provide justifications of, and obtain approvals for, all noncompetitive procurements conducted in reliance on a CICA exception further checks agencies’ discretion in using noncompetitive procedures.60 Agencies can rely on the CICA exceptions only when contracting officers justify the use of other than competitive procedures in writing and certify the accuracy and completeness of their justifications.61 These justifications must then be approved by agency officials of a higher rank than the contracting officer, with the identity of the approving official determined by the expected value of the contract,62 as Table 1 illustrates.

Table 1. Approving Officials for Noncompetitive Contracts in General

Contract Value Approving Official

Under $650,000 Contracting officer’s certification suffices unless higher approval is required under agency procedures

Over $650,000 and below $12.5 million Competition advocate for the procuring activity or another official as provided under 48 C.F.R. §6.304(a)(3) or (4) (authority cannot be delegated)

Over $12.5 million and below $62.5 million (all agencies other than DOD, NASA, and the Coast Guard)

Over $12.5 million and below $85.5 million (DOD, NASA, and the Coast Guard)

Head of the procuring activity or a delegate who, if a member of the armed services, is a general or flag officer or, if a civilian, is serving in a GS-16 or higher position or a comparable position under another schedule

Over $62.5 million (all agencies other than DOD, NASA, and the Coast Guard)

Over $85.5 million (DOD, NASA, and the Coast Guard)

Senior procurement executive of the agency designated pursuant to Section 16(3) of the Office of Federal Procurement Policy Act (cannot be delegated, other than in the case of the Undersecretary of Defense for Acquisition, Technology & Logistics acting as the senior procurement executive of DOD)

Source: Congressional Research Service, based on 48 C.F.R. §6.304

Written justifications and approvals must normally precede the contract award.63 They may follow the award only when the agency relies on the exception for unusual and compelling

58 10 U.S.C. § 2304(e) & 41 U.S.C. § 253(e). Under the FAR, similar requirements apply to all the CICA exceptions, although the statutory basis for these requirements is unclear. See 48 C.F.R. § 6.301(d). 59 See, e.g., Competition in Contracting Act, supra note 14, at 16-17 (describing how agencies reportedly abused their authority, under the pre-CICA competition requirements, to make noncompetitive procurements when “competition is impracticable” in similar situations). 60 10 U.S.C. § 2304(f) & 41 U.S.C. § 253(f). 61 10 U.S.C. § 2304(f)(1)(A) & 41 U.S.C. § 253(f)(1)(A). 62 10 U.S.C. § 2304(f)(1)(B) & 41 U.S.C. § 253(f)(1)(B). 63 10 U.S.C. § 2304(f)(2) & 41 U.S.C. § 253(f)(2).



urgency, and, even then, the agency must have determined the existence of usual and compelling urgency prior to making the award.64 Justifications can be omitted only when an agency (1) relies upon an agency head’s determination that it is necessary, in the public interest, to use other than competitive procedures; (2) conducts a procurement under the authority of the Javits-Wagner-O’Day Act, or makes competitive or certain noncompetitive awards under the authority of Section 8(a) of the Small Business Act;65 or (3) purchases brand-name items for authorized resale.66 The omission of justifications when the agency relies upon the agency head’s determination that it is necessary, in the public interest, to use other than competitive procedures can be explained, in part, by the requirement that agency heads must themselves document the existence of such circumstances in writing and notify Congress. Purchase of brand-name items for authorized resale involves purchases for use in commissaries or similar facilities, where the purchased articles are “desired or preferred by customers of the selling activities.”67 It does not include agencies’ purchase of brand-name commercial items for their own use.68

Justifications must include (1) a description of agency needs; (2) an identification of the statutory exception upon which the agency relied and a demonstration of the reasons for using the exception that is based upon the proposed contractor’s qualifications or the nature of the procurement; (3) a determination that the anticipated cost will be fair and reasonable; (4) a description of any market survey conducted, or a statement of the reasons for not conducting a market survey; (5) a listing of any sources that expressed interest in the procurement in writing; and (6) a statement of any actions that the agency may take to remove or overcome barriers to competition before subsequent procurements.69

CICA originally required agencies to make their justifications for noncompetitive awards, as well as “any related information,” available to the general public under the Freedom of Information Act (FOIA),70 but it has since been amended to require that justifications and approvals be posted on FedBizOpps (http://www.fedbizopps.gov) within 14 days of contract award.71 Agencies are also required, under CICA, to publish notices regarding certain noncompetitive contracts that they propose to award on FedBizOpps prior to their award.72 These notices identify the intended recipient of the noncompetitive contract award and state the agencies’ reasons for making a noncompetitive award.73 Because notice of these proposed awards precedes the awards, other contractors could submit proposals to the agency or protest the proposed award.

64 48 C.F.R. § 6.303-1(d). 65 Justifications, approvals, and notices are, however, required when agencies make sole-source awards valued in excess of $20 million under the authority of Section 8(a) of the Small Business Act. See P.L. 111-84, § 811, 123 Stat. 2405-06 (Oct. 28, 2009). 66 10 U.S.C. § 2304(f)(2)(A)-(E) & 41 U.S.C. § 253(f)(2)(A)-(D). 67 48 C.F.R. § 6.302-5(c)(3). 68 Such purchases are governed by other authorities. See 48 C.F.R. § 11.105. 69 10 U.S.C. § 2304(f)(3)(A)-(F) & 41 U.S.C. § 253(f)(3)(A)-(F). 70 P.L. 98-369, § 2711, 98 Stat. 1178 (civilian agencies); id., at § 2723, 98 Stat. 1190 (defense agencies). 71 P.L. 110-181, § 844, 122 Stat. 236-39 (Oct. 14, 2008). When the noncompetitive award is made on the basis of unusual and compelling urgency, agencies have up to 30 days after the award to post it on FedBizOpps. 72 10 U.S.C. § 2304(f)(1)(C) & 41 U.S.C. § 253(f)(1)(C). See generally 41 U.S.C. § 416(b)(5) (notice requirements). 73 Id.



“Special Simplified Procedures for Small Purchases” In addition to authorizing the use of noncompetitive procedures in certain circumstances, CICA authorizes the use of “special simplified procedures” when agencies make “small purchases.”74 CICA’s drafters included this provision because they recognized that the costs of conducting competitions can exceed the savings resulting from competition when agencies procure items with low prices.75 CICA itself defined a “small purchase” as one whose expected value was less than $25,000,76 but was later amended to include purchases whose expected value was below the simplified acquisition threshold (currently, $150,000).77 Moreover, since 1996, under an amendment to CICA, agencies have also had authority to use simplified acquisition procedures in purchasing commercial items whose expected value exceeds the simplified acquisition threshold but is below $6.5 million (or $12 million in the case of goods or services purchased in support of contingency operations, or for defense against or recovery from nuclear, biological, chemical, or radiological attack).78 Agencies can rely on this latter authority only when their contracting officers reasonably expect, based upon market research and the nature of the goods or services sought, that offers will include only commercial items.79 This authority to use simplified procedures in purchases of commercial items valued at between $150,000 and $6.5 million is temporary, under what the Federal Acquisition Regulation (FAR) calls a “test program,” and will expire on January 1, 2012, unless renewed.80 CICA prohibits agencies from dividing proposed purchases in excess of the “small purchase” threshold into several purchases in order to take advantage of the simplified procedures, and it requires agencies to promote competition “to the maximum extent practicable” when using simplified procedures.81

CICA otherwise leaves the articulation of the simplified acquisition procedures to the FAR, which prescribes somewhat different regulations for acquiring different prices and types of goods and services (i.e., commercial or noncommercial). See Figure 2. Under the FAR, purchases whose

74 10 U.S.C. § 2304(g)(1)(A) & 41 U.S.C. § 253(g)(1)(A). 75 See, e.g., Competition in Contracting Act of 1984, supra note 15, at 226. For example, spending $50 to achieve full and open competition saves money when the competition reduces by 10% the price of goods or services costing $100,000, but not when it reduces by 10% the price of goods or services costing $10. 76 P.L. 98-369 at § 2711 and § 2723. 77 10 U.S.C. § 2304(g)(1)(A) & 41 U.S.C. § 253(g)(1)(A). The simplified acquisition threshold is presently set at $150,000 unless there is an emergency. See 48 C.F.R. § 2.101 (increasing the threshold to $300,000, for contracts to be awarded or performed within the United States, and $1 million for contracts to be awarded or performed outside the United States, in certain emergencies). 78 48 C.F.R. § 13.500(a) & (e). 79 10 U.S.C. § 2304(g)(1)(B) & 41 U.S.C. § 253(g)(1)(B). 80 48 C.F.R. § 13.500(d). FARA created this authority, which has been repeatedly renewed. See P.L. 104-106, at § 4202 (establishing the authority); National Defense Authorization Act for FY2000, P.L. 106-65, § 806 (extension through January 1, 2002); National Defense Authorization Act for FY2002, P.L. 107-107, § 823 (extension through January 1, 2003); Bob Stump National Defense Authorization Act for FY2003, P.L. 107-314, § 812 (extension through January 1, 2004); National Defense Authorization Act for FY2004, P.L. 108-136, § 1442 (extension through January 1, 2006); and Ronald W. Reagan National Defense Authorization Act for FY2005, P.L. 108-375, § 817 (extension through January 1, 2008); National Defense Authorization Act for FY2008, P.L. 110-181, § 822 (extension through January 1, 2010); National Defense Authorization Act for FY2010, P.L. 111-84, § 816 (extension through January 1, 2012). The Bush Administration’s reliance on this authority proved controversial, but the Obama Administration has relied on it. See Dollars, Not Sense, supra note 53, at 18; Executive Office of the President, Office of Management and Budget, Initial Implementing Guidance for the American Recovery and Reinvestment Act of 2009, at 42 (Feb. 18, 2009), available at http://www.recovery.gov/files/Initial%20Recovery%20Act%20Implementing%20Guidance.pdf. 81 10 U.S.C. § 2304(g)(3) & 41 U.S.C. § 253(g)(4).



expected value is below the simplified acquisition threshold ($150,000) are further subdivided into (1) those below the micropurchase threshold (generally $3,000) and (2) those above it.82 When making “micropurchases,” or purchases at or below $3,000, agencies are to promote competition, to at least a limited degree, by distributing their purchases “equitably” among qualified suppliers “[t]o the extent practicable.”83 They may make micropurchases without soliciting competitive quotations only if the contracting officer, or other duly appointed official, considers the price to be reasonable.84 When purchases are above the micropurchase threshold but below the simplified acquisition threshold, agencies “shall use simplified acquisition procedures to the maximum extent practicable.”85 These purchases are set aside for small businesses,86 making them “full and open competitions after the exclusion of sources” under CICA. In such purchases, and in purchases of commercial items whose expected value exceeds the simplified acquisition threshold but is below $6.5 million (or $12 million in emergencies), agencies “must promote competition to the maximum extent practicable to obtain supplies and services from the source whose offer is the most advantageous to the Government considering the administrative cost of the purchase.”87 This generally means that agencies “must consider solicitation of at least three sources,” two of which were not included in the previous solicitation.88 Contracting officers are prohibited from soliciting quotations based on personal preferences or restricting solicitations to suppliers of well-known and widely distributed makes or brands.89

82 The micropurchase threshold can be lower or higher than $3,000, depending on the goods or services acquired and the circumstances of the acquisition. Micropurchases for construction services subject to the Davis-Bacon Act or other services subject to the Service Contract Act have lower limits: $2,000 and $2,500, respectively. Those for goods or services that the agency head has determined will be used to support a contingency operation or facilitate defense against or recovery from nuclear, biological, chemical, or radiological attack have higher limits: $15,000 in the case of contracts to be awarded or performed, or purchases to be made, inside the United States and $30,000 in the case of contracts to be awarded or performed, or purchases to be made, outside the United States. 48 C.F.R. § 13.201(g)(1)(i)-(ii). 83 48 C.F.R. § 13.202(a)(1). 84 48 C.F.R. § 13.202(a)(2). 85 48 C.F.R. § 13.003(a). This provision does not apply if agencies can meet their requirements using (1) required sources of supply under Part 8 of the FAR (addressing Federal Prison Industries; the Committee for Purchase from People Who Are Blind or Severely Disabled, and FSS contracts); (2) existing indefinite delivery/indefinite quantity contracts; or (3) other existing contracts. 48 C.F.R. § 13.003(a)(1)-(3). 86 48 C.F.R. § 13.003(b)(1). 87 48 C.F.R. § 13.104. 88 48 C.F.R. § 13.104(b). When not providing notice of proposed contract actions and solicitation information through the government-wide point of entry, FedBizOpps, agencies can “ordinarily” obtain the “maximum practicable competition ... by soliciting quotations or offers from sources within the local trade area.” 89 48 C.F.R. § 13.104(a)(1)-(2).



Figure 2. Simplified Acquisition Procedures: Competition Requirements at Various Price Thresholds

Source: Congressional Research Service

Sole-source solicitations for purchases below the simplified acquisition threshold are permissible only if contracting officers determine that the circumstances of the contract action are such that only one source can be reasonably deemed available (e.g., urgency, exclusive licensing agreements, brand-name goods, industrial mobilization).90 Sole-source solicitations for purchases of commercial items whose expected costs exceed the simplified acquisition threshold are permissible only if (1) they are justified in writing; (2) they are approved at the levels specified in Table 2; and (3) notice of the proposed award is provided at the government-wide point of entry, FedBizOpps.

Table 2. Approving Officials for Noncompetitive Contracts Under the Simplified Acquisition Procedures

Contract Value Approving Official

Over $150,000 and below $650,000 Contracting officer’s certification serves as approval unless agency regulations require higher-level approval

Over $650,000 and below $12.5 million Competition advocate for the procuring activity, or an official described in 48 C.F.R. §6.304(a)(3)-(4) (cannot be delegated)

Over $12.5 million and below $62.5 million (all agencies other than DOD, NASA, and the Coast Guard)

Over $12.5 million and below $85.5 million (DOD, NASA, and the Coast Guard)

Head of the procuring activity, or an official described in 48 C.F.R. §6.304(a)(3)-(4) (cannot be delegated)

Over $62.5 million (all agencies other than DOD, NASA, and the Coast Guard)

Over $85.5 million (DOD, NASA, and the Coast Guard)

Official described in 48 C.F.R. §6.304(a)(4) (cannot be delegated other than as provided in 48 C.F.R. §6.304(a)(4))


90 48 C.F.R. § 13.106-1(b)(1).



Table 3. Types of Competition Under CICA

Competition Type Includes

Full and Open Competition Sealed bids

Competitive proposals

Other competitive procedures (e.g., GSA’s Federal Supply Schedule)

Full and open competition after the exclusion of sources

Dual sourcing Set-asides for small businessesa

Permissibly Noncompetitive Sole source (including sole-source awards to small businesses)a

Unusual and compelling urgency

Maintenance of the industrial base

International agreements

Statutory requirements or brand-name items for resale

National security

Necessary in the public interest

Special Simplified Procedures Micropurchases (noncommercial or commercial items)

Purchases above the micropurchase threshold but below the simplified acquisition threshold ($150,000) (noncommercial or commercial items) → set aside for small businesses

Purchases of commercial items whose prices are between $150,000 and $6.5 million (or $12 million in emergencies)


a. CICA classifies contracts with small businesses in two different ways, depending upon whether the contract is a sole-source award. Under CICA, sole-source awards to small businesses are permissible in light of the circumstances permitting other than full and open competition, while other awards to small businesses result from “full and open competition after exclusion of sources.”

Other Competition Requirements In keeping with its drafters’ belief that effective competition in government procurement involves more than just the mechanisms that agencies use to solicit offers, CICA also contains other provisions that promote competition by, among other things, barring agencies from using restrictive specifications and requiring them to give advance notice of upcoming solicitations.91 These provisions are not the primary focus of this report, but are briefly summarized below in order to provide a complete sense of CICA’s competition requirements.

1. Planning and solicitation requirements: Under CICA, agencies must specify their needs and solicit bids or offers “in a manner designed to achieve full and open competition”; use advanced procurement planning and market research; and “develop specifications in such a manner as is necessary to obtain full and open competition.”92 Specifications may be stated in terms of function, performance,

91 See, e.g., Competition in Contracting Act, supra note 14, at 2 (“It is important to understand ... that competition is not a procurement procedure, but an objective which a procedure is designed to attain.”). 92 10 U.S.C. § 2305(a)(1)(A)(i)-(iii) & 41 U.S.C. § 253a(a)(1)(A)-(C).



or design requirements, but can include restrictive provisions or conditions only to the extent necessary to satisfy agency needs or as authorized by law.93 These requirements derive from the fact that competitive mechanisms for submitting bids or offers are of limited effectiveness if agencies can craft their procurement specifications in such a way as to effectively exclude contractors from the pool of potential offerors.94

2. Evaluation and award requirements: Agencies must evaluate sealed bids and competitive proposals based solely on the factors specified in the solicitation.95 This requirement supports the competitive mechanisms for submitting bids and offers by ensuring that agencies properly consider bids and offers once they are received, rather than award contracts to favored companies on the basis of factors not disclosed to other competitors.

3. Competition advocates: CICA requires the head of each executive agency to designate, both for the agency as a whole and for each procuring activity within the agency, one officer or employee to serve as the “advocate for competition.”96 Agency competition advocates are responsible, among other things, for challenging barriers to and promoting full and open competition in agency procurement activities.97 CICA initially required agency competition advocates to make annual reports to each chamber of Congress identifying actions the agency intended to take to increase competition for contracts and reduce the number and value of noncompetitive contracts.98 However, FASA removed this reporting requirement.99

4. Procurement notices: Under CICA, agencies are generally required to publish “procurement notices” announcing upcoming IFBs and RFPs for contracts exceeding $25,000 and for likely subcontracts on awarded contracts exceeding $25,000.100 CICA also specifies that agencies may not issue solicitations earlier than 15 days after the notice is published, or establish a deadline for submission of bids or offers earlier than 30 days after the solicitation is issued.101 These

93 10 U.S.C. § 2305(a)(1)(B)(i)-(ii) & 41 U.S.C. § 253a(a)(2)(B) & (3)(A)-(C). 94 See, e.g., Competition in Contracting Act, supra note 14, at 19 (describing specifications as the “cornerstone of competitive procurement” because they “serve initially as the fundamental expression of the agency’s need and, in the contract award, as the baseline for the evaluation of offers.”). 95 10 U.S.C. § 2305(b); 41 U.S.C. § 253b. 96 41 U.S.C. § 418. 97 Id. 98 Id. 99 P.L. 103-355 § 1031 (repealing subsection (c) of 10 U.S.C. § 2318 and of 41 U.S.C. § 419, which required annual reports on competition from defense and civilian agencies, respectively). Paul A. Denett, the Administrator of the Office of Federal Procurement Policy (OFPP) in the Bush Administration, required similar reports, albeit for agencies’ chief acquisition officers and senior procurement executives, not for Congress. Executive Office of the President, OMB, OFPP, Enhancing Competition in Federal Acquisition: Memorandum, May 31, 2007, available at http://www.dhhs.gov/oamp/policies/competitionmemo053107.pdf (“Your competition advocate should provide a written report to you with appropriate analysis, including trend analysis, and recommendations. The report should be completed by December 20, 2007, and annually thereafter.”). The Obama Administration does not appear to have continued this practice, although it has implemented other policies intended to reduce the number of noncompetitive awards. See supra note 5. 100 41 U.S.C. § 416. 101 Id.



requirements promote competition by ensuring that would-be offerors have ample notice of proposed agency procurement actions and adequate time to prepare their offers. Notices were originally published in Commerce Business Daily, but are now posted online at FedBizOpps.102

Competition Requirements for Task and Delivery Order Contracts FASA supplemented CICA by, among other things, articulating competition requirements for task order and delivery order (TO/DO) contracts. TO/DO contracts are contracts for services or goods, respectively, that do not “procure or specify a firm quantity of supplies (other than a minimum or maximum quantity),” but rather “provide[] for the issuance of orders for the delivery of supplies during the period of the contract.”103 Because the time of delivery and the quantity of goods or services to be delivered are not specified (outside of stated maximums or minimums) in TO/DO contracts, such contracts are sometimes referred to as indefinite delivery/indefinite quantity (ID/IQ) contracts.104 TO/DO contracts are also known as single-award or multiple-award contracts, a designation based upon the number of firms—one or more than one, respectively—able to compete for task or delivery orders under the contract.105 Some commentators further refer to single-award TO/DO contracts as “monopoly contracts,”106 but such usage obscures the fact that single-award TO/DO contracts are themselves awarded competitively, even if task or delivery orders under them are not, and are of limited duration.107

Under FASA, agencies are effectively subject to CICA when awarding TO/DO contracts and can use other than competitive procedures only when one of the seven exceptions to full and open competition applies and there are the requisite justifications and approvals.108 FASA also establishes “a preference” for multiple-award contracts by requiring agencies to use them, as opposed to single-award contracts, “to the maximum extent practicable.”109 Moreover, FASA requires agencies using multiple-award contracts to provide contractors “a fair opportunity to be considered” when issuing task or delivery orders in excess of $3,000 unless

(1) the agency’s need for the services or property is of such unusual urgency that providing such opportunity to all such contractors would result in unacceptable delays in fulfilling that need;

102 Id. 103 48 C.F.R. § 16.501-1. 104 See 48 C.F.R. § 16.501-2(a). 105 Multiple-award task order contracts are sometimes also referred to as MATOCs. 106 See, e.g., Dollars, Not Sense, supra note 53, at 13. 107 Federal contracts are normally for one year, but can be extended to five years through agencies’ use of options. 48 C.F.R. § 17.204(e) (“Unless otherwise approved in accordance with agency procedures, the total of the basic and option periods shall not exceed 5 years in the case of services, and the total of the basic and option quantities shall not exceed the requirement for 5 years in the case of supplies.”). 108 10 U.S.C. § 2304a(c) & 41 U.S.C. § 253h(c). 109 10 U.S.C. § 2304a(d)(3) & 41 U.S.C. § 253h(d)(3).



(2) only one such contractor is capable of providing the services or property required at the level of quality required because the services or property ordered are unique or highly specialized;

(3) the task or delivery order should be issued on a sole-source basis in the interest of economy and efficiency because it is a logical follow-on to a task or delivery order already issued on a competitive basis; or

(4) it is necessary to place the order with a particular contractor in order to satisfy a minimum guarantee.110

FASA did not, however, subject the issuance of task or delivery orders under TO/DO contracts to CICA, and, even today, such orders remain outside the CICA framework.111 FASA further requires each agency issuing TO/DO contracts to designate a “task and delivery order ombudsman” to review contractors’ complaints regarding TO/DO contracts and ensure that all contractors holding a multiple-award TO/DO contract have a “fair opportunity to be considered” for orders.112 Finally, FASA grants the Government Accountability Office (GAO) jurisdiction over protests alleging that the orders increase the scope, period, or maximum value of the contract.113

The National Defense Authorization Act for FY2008 (NDAA ‘08) further strengthened the competition requirements for TO/DO contracts established by FASA. See Figure 3. The NDAA ‘08 limits agencies’ ability to use single-award TO/DO contracts by requiring that agency heads make the following determinations, in writing, before awarding a single-award TO/DO contract whose expected value would exceed $103 million, including options:

(i) the task or delivery orders expected under the contract are so integrally related that only a single source can reasonably perform the work;

(ii) the contract provides only for firm, fixed-price task or delivery orders for (I) products for which unit prices are established in the contract or (II) services for which prices are established in the contract for the specific tasks to be performed;

(iii) only one source is qualified and capable of performing the work at a reasonable price to the government; or

(iv) because of exceptional circumstances, it is necessary in the public interest to award the contract to a single source.114

110 10 U.S.C. § 2304c(b)(1)-(4) & 41 U.S.C. § 253j(b)(1). 111 48 C.F.R. § 6.001(e)-(f). 112 10 U.S.C. § 2304c(e) & 41 U.S.C. § 253j(e). 113 10 U.S.C. § 2304c(d) & 41 U.S.C. § 253j(d). 114 P.L. 110-181, § 843, 122 Stat. 236-39 (Oct. 14, 2008). Agency heads must notify Congress within 30 days after making a determination to award a single-award TO/DO contract in excess of $103 million. P.L. 110-181 addressed the TO/DO contracts of both defense and civilian agencies. An earlier law, the National Defense Authorization Act for Fiscal Year 2002, had addressed only DOD TO/DO contracts. This law required that the Defense Federal Acquisition Regulation Supplement (DFARS) be updated to (1) require that issuance of orders for services in excess of $100,000 under multiple award contracts be “competitive” unless a CICA exception applies and the agency issues a written justification and (2) specify what “competitive” means. See P.L. 107-107, § 803, 115 Stat. 1179 (Dec. 28, 2001).



The NDAA ‘08 also specifies what constitutes a “fair opportunity to be considered” in competitions for orders in excess of $5.5 million under multiple-award TO/DO contracts. Under the NDAA, for contractors to have a fair opportunity, agencies must provided them with (1) a notice of the task or delivery order that includes a clear statement of the agency’s requirements; (2) a reasonable period of time to provide a proposal in response to the notice; (3) disclosure of the significant factors and subfactors (including cost or price) that the agency expects to consider in evaluating proposals and their relative importance; (4) a written statement documenting the basis for the award and the relative importance of quality and price or cost factors, if the award is to be made on a best-value basis; and (5) an opportunity for post-award debriefing.115

Finally, the NDAA ‘08 authorized GAO to hear protests alleging improprieties in agencies’ award of task and delivery orders valued in excess of $10 million.116 When granting such authority, Congress included a “sunset” provision, stating that the “subsection” granting this authority would be “in effect for three years, beginning on the date that it is 120 days after [its] date of enactment” (i.e., May 27, 2011).117 The 111th Congress enacted legislation which extended this date as to the orders of defense agencies. 118 Similar legislation was introduced in the 112th Congress (e.g., H.R. 899, S. 498), but not enacted before May 27, 2011.

In a protest of an order placed under a civilian agency contract heard in June 2011, the Department of Defense (DOD) asserted that, because Congress had not enacted legislation extending the sunset date as to the orders of civilian agencies, GAO’s jurisdiction to hear protests concerning task or delivery orders valued in excess of $10 million issued under civilian agency contracts expired on May 27, 2011.119 GAO disagreed, finding that the sunset provision applied to the entire subsection, not just the part of it authorizing GAO to hear protests of task and delivery orders valued in excess of $10 million.120 Under GAO’s reading, what expired in May 2011 was the provision of FASA “limiting” its jurisdiction over task order protests to those that increased the scope, period, or maximum value of the contract, as amended by the NDAA for FY2008, which “expanded” GAO’s jurisdiction to include protests of orders valued in excess of $10 million.121 According to GAO, the expiration of this provision means that it may hear protests concerning orders of any value under civilian agency contracts, regardless of whether they increase the scope, period or maximum value of the contract.122 It remains to be seen whether the

115 Id. 116 Id. 117 Id. at § 843(a), 122 Stat. 237. 118 Ike Skelton National Defense Authorization Act for Fiscal Year 2011, P.L. 111-383, § 825, 124 Stat. 4270 (Jan. 7, 2011) (codified at 10 U.S.C. § 2304c(e) (“Paragraph (1)(B) and paragraph (2) of this subsection shall not be in effect after September 30, 2016.’’). 119 Technatomy Corp., B-405130 (June 14, 2011). GAO agreed with DOD’s argument that the law governing protests of orders issued by civilian agencies should apply here because the order in question was issued under a multiple-award contract awarded by the General Services Administration. However, it rejected DOD’s argument that the decision should be based upon the law in effect at the time when the protest was heard, as opposed to the time when the protest was filed. For more on interagency contracting, which allows one agency to place orders under the contracts of another, see generally CRS Report R40814, Interagency Contracting: An Overview of Federal Procurement and Appropriations Law, by Kate M. Manuel and Brian T. Yeh. 120 Technatomy Corp., B-405130 (June 14, 2011). 121 Id. 122 Id.



executive branch adopts GAO’s interpretation of FASA, as amended by the NDAA for ’08, 123 or how a court might view any challenge to GAO’s interpretation of these statutes.124

Figure 3. TO/DO Contracts: Competition Requirements at Various Price Thresholds


Legislative Initiatives The 111th Congress enacted several bills addressing competition in contracting. Such bills generally took one of two very different approaches, either promoting competition and limiting agencies’ ability to make noncompetitive awards, or restricting competition to promote policy goals, such as contracting locally, that are more highly valued than full and open competition, at least in certain circumstances. The statutes that prompted competition did so in various ways, including by (1) subjecting certain “earmarks” or “congressionally directed spending item[s]” to the competition requirements normally applicable to federal contracts;125 (2) precluding defense

123 Due to the “separation of powers” doctrine, executive branch agencies are not bound by recommendations contained in GAO protests, such as this one. See generally CRS Report R40228, GAO Bid Protests: An Overview of Time Frames and Procedures, by Kate M. Manuel and Moshe Schwartz. 124 It is also unclear how a court might come to hear such a challenge, given that the U.S. Court of Federal Claims lacks jurisdiction over protests involving task and delivery orders valued in excess of $10 million. See DataMill, Inc. v. United States, 91 Fed. Cl. 740 (Mar. 5, 2010). However, because the “fair opportunity” provisions are terms of the contract, they could potentially be disputed before federal courts. See, e.g., Steven W. Feldman and Raymond Fioravanti, Contract Dispute Or Bid Protest? The Delex Systems Dilemma, 39 Pub. Cont. L. J. 483 (2010). 125 See, e.g., Department of Defense Appropriations Act, 2010, P.L. 111-118, § 8121, 123 Stat. 3457 (Dec. 19, 2009) (“Each congressionally directed spending item specified in this Act or the explanatory statement regarding this Act that is also identified in S.Rept. 111-74 and intended for award to a for-profit entity shall be subject to acquisition regulations for full and open competition on the same basis as each spending item intended for a for-profit entity that is contained in the budget request of the President.”); Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2010, P.L. 111-80, § 747, 123 Stat. 2131 (Oct. 21, 2009) (“Specific projects contained in the report of the Committee on Appropriations of the House of Representatives accompanying this Act (H.Rept. 111-181) that are considered congressional earmarks for purposes of clause 9 of rule XXI of the Rules of the House of Representatives, when intended to be awarded to a for-profit entity, shall be awarded under a full and open competition.”). The Department of Defense, at least, has construed the relevant sections of its appropriations bill (P.L. 111-118) as requiring that earmarks sponsored solely by House members be fully and openly competed, while allowing earmarks sponsored by Senate members to be awarded via a small business set-aside or in reliance on one of the CICA (continued...)



agencies from awarding certain noncompetitive contracts based on unsolicited research proposals;126 (3) requiring the Department of Defense to take specific steps to “foster competition” in certain large or high-profile procurements (e.g., major defense acquisition programs, littoral combat ships, future surface combatants);127 (4) prohibiting specific agencies from making payments on, or significantly extending or expanding, certain noncompetitive contracts;128 (5) requiring governmental agencies that are otherwise exempted from federal procurement laws to comply with CICA;129 (6) requiring that agencies’ Inspectors General review selected contracts awarded through other than full and open competition;130 (7) requiring studies or additional reporting on the use of authorities allowing other than full and open competition, including the effect of such use on competition;131 and (8) requiring justifications, approvals, and

(...continued)

exceptions. See Office of the Secretary of Defense, Full and Open Competition Requirement for Congressionally Directed Spending Items and Earmarks Intended for “For-Profit” Entities, June 6, 2010, available at http://www.acq.osd.mil/dpap/policy/policyvault/USA002446-10-DPAP.pdf. 126 P.L. 111-118, § 8039. Defense agencies may generally award such contracts only when agency officials determine that (1) as a result of thorough technical evaluation, only one source is fully qualified to perform the work; (2) the purpose of the contract is to explore an unsolicited proposal which offers significant scientific or technological promise, represents the product of original thinking, and was submitted in confidence by one source; or (3) the purpose of the contract is to take advantage of unique and significant industrial accomplishment by a specific concern, or to ensure that a new product or idea of a specific concern is given financial support. 127 See, e.g., Weapon Systems Acquisition Reform Act, P.L. 111-23, § 202(a)(1), 123 Stat. 1720-21 (May 22, 2009) (calling for the Secretary of Defense to “ensure that the acquisition strategy for each major defense acquisition program includes … measures to ensure competition, or the option of competition, at both the prime contract level and the subcontract level … throughout the life-cycle of [the] program as a means to improve contractor performance.”); Defense Production Act Reauthorization of 2009, P.L. 111-67, § 2, 123 Stat. 2008 (Sept. 30, 2009) (stating that “plans and programs undertaken to carry out the purposes of this Act should be undertaken with due consideration for promoting … competition”); National Defense Authorization Act for FY2010, P.L. 111-84, § 121, 123 Stat. 2211 (Oct. 28, 2009) (calling for the Defense Department to ensure that the government’s rights in technical data for the littoral combat ship are sufficient to permit the government to conduct a competition for a second shipyard as soon as practicable); id. at § 125, 123 Stat. 2216 (calling for the “technology roadmap” for future surface combatants and fleet modernization to foster competition); id. at § 353, 123 Stat. 2264 (demonstration programs with open architecture to promote competition, among other things); id. at § 805, 123 Stat. 2403 (directing the Secretary of Defense to provide guidance on life-cycle management and other issues related to major weapons systems that maximizes competition); id. at § 1021, 123 Stat. 2445 (expressing the sense of Congress that the Navy can take other measures to acquire new ships and maintain the fleet, including maximizing competition or the option of competition). 128 Omnibus Appropriations Act, 2009, P.L. 111-8, Title III, § 301(a), 123 Stat. 625 (Mar. 11, 2009) (“None of the funds in this or any other appropriations Act for fiscal year 2009 or any previous fiscal year may be used to make payments for a noncompetitive management and operating contract, or a contract for environmental remediation or waste management in excess of $100,000,000 in annual funding at a current or former management and operating contract site or facility, or to award a significant extension or expansion to an existing management and operating contract, or other contract covered by this section, unless such contract is awarded using competitive procedures or the Secretary of Energy grants, on a case-by-case basis, a waiver to allow for such a deviation.”). 129 Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-203, § 319, 124 Stat. 1528 (July 21, 2010) (“Notwithstanding the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 251 et seq.) or any other provision of law (except the full and open competition requirements of the Competition in Contracting Act), the Office of the Comptroller of the Currency may—(1) enter into and perform contracts, execute instruments, and acquire real property (or property interest) as the Comptroller deems necessary to carry out the duties and responsibilities of the Office of the Comptroller of the Currency; and (2) hold, maintain, sell, lease, or otherwise dispose of the property (or property interest) acquired under paragraph (1).”). 130 Department of Homeland Security Appropriations Act, P.L. 111-83, § 521, 123 Stat. 2171 (Oct. 28, 2009). 131 Ike Skelton National Defense Authorization Act for Fiscal Year 2011, P.L. 111-383, § 844 (requiring GAO to conduct a study of DOD’s reliance on the CICA exception for national security); P.L. 111-84, § 819, 123 Stat. 2409-10; P.L. 111-5, § 1552, 123 Stat. 302 (Feb. 17, 2009) (“A summary of any contract awarded with such funds that is not fixed-price and not awarded using competitive procedures shall be posted in a special section of the website established (continued...)



notices for sole-source awards in excess of $20 million made under the authority of Section 8(a) of the Small Business Act, which had previously been exempt from such requirements.132 Other statutes, in contrast, authorized agencies to restrict competition to promote awards to “products, services, or sources from Afghanistan,”133 countries “along a major route of supply to Afghanistan,”134 or “local” nonprofit or cooperative entities.135

Legislation reflecting concerns about competition may be reintroduced in the 112th Congress.136 Members of the 112th Congress may also review agency compliance with existing competition requirements and exceptions thereto.

(...continued)

in section 1526.”). 132 P.L. 111-84, § 811, 123 Stat. 2405-06. 133 Supplemental Appropriations Act, P.L. 111-32, § 1102(c)(2), 123 Stat. 1896-97 (June 24, 2009) (authorizing agencies to use funds appropriated under Section 1102 of the act, or under prior acts appropriating funds for the Department of State, foreign operations and related programs to conduct procurements in which competition is limited to products, services, or sources from Afghanistan; noncompetitive procedures are used to award a contract to sources from Afghanistan; or a “preference” is provided for products, services, or sources from Afghanistan). The act defines products, services, and sources from Afghanistan, but does not specify what “preferences” are permissible. 134 National Defense Authorization Act for FY2010, P.L. 111-84, § 801, 123 Stat. 2399-400 (authorizing the Secretary of Defense to set aside procurements for products or services from one or more countries “along a major route of supply” to Afghanistan or otherwise grant “preference” to them). 135 Department of the Interior, Environment, and Related Agencies Appropriations Act, 2010, P.L. 111-88, Department Wide Programs, Wildfire Management, 123 Stat. 2923 (Oct. 30, 2009) (authorizing the Department of Interior to award contracts for hazardous fuel reduction activities notwithstanding CICA, provided that the department obtains the “maximum practicable competition” among local private nonprofit or cooperative entities; Youth Conservation Corps crews; small or micro-businesses; or other entities that will hire and train locally 50% or more of the workforce). 136 Examples of legislation that was introduced, but not enacted, in the 111th Congress, include Coast Guard Acquisition Reform Act, H.R. 1665, § 101 (requiring that any lead systems integrators use full and open competition in awarding contracts); Department of Homeland Security Appropriations Act, 2011, S. 3607, § 522 (requiring the DHS inspector general to review contracts awarded via other than full and open competition); Department of Veterans Affairs Acquisition Improvement Act of 2009, H.R. 4221, § 7 (establishing a complaint process for agencies’ use of “restricted competitions”); Enhanced Oversight of State and Local Economic Recovery Act, S. 1064, § 3 (requiring the Administrator of the General Services Administration to ensure maximum competition for task and delivery orders when state and local governments use the Federal Supply Schedules); GROWTH Act of 2010, H.R. 5191, § 9 (requiring the Millennium Challenge Corporation to ensure that contracts and employment opportunities resulting from assistance provided to governments of developing countries be awarded via a “fair and equitable open competition process”); HAITI Act, H.R. 4952, § 94 (requiring the inspector general to report on expenditures for Haiti reconstruction, including contracts that are awarded using other than full and open competition); Level Playing Field Contracting Act of 2010, S. 3101, § 10 (requiring GAO to report on contractors’ experiences with competition in government contracting); National Health Information Technology and Privacy Amendment, S. 444, §§ 2 & 5 (requiring that a federally chartered corporation to be formed under the act maintain “effective competition, including the use of competitive bidding where appropriate” in procuring goods or services); Natural Disaster Fairness in Contracting Act, S. 1420 (barring agencies from relying on the exceptions for circumstances involving maintenance of the industrial base; the requirements of international agreements; and actions necessary in the public interest when awarding contracts valued at $5 million or more to procure property or services in connection with natural disaster reconstruction efforts, as well as requiring the President or his or her designee to approve in writing noncompetitive contracts for natural disaster reconstruction efforts); Transparency in Government Act of 2010, H.R. 4983 (requiring USASpending.gov to include information on the extent of competition and the authorization for noncompetitive awards); Transportation, Housing and Urban Development and Related Agencies Appropriations Act, 2011, H.R. 5850 (recipients of certain grants to conduct procurements in a way providing for full and open competition).


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Appendix. Circumstances Permitting Other Than Full and Open Competition Under CICA

Table A-1. Potential Applications and Limitations

Circumstance Potential Applications Limitations

Sole source for goods or services

Authority here to be used, if appropriate, in preference to that allowing procurement contracts necessary in the public interest

Reasonable basis to conclude that the agency’s minimum needs can only be satisfied by (1) unique supplies or services available from only one source or supplier with unique capabilities, or (2) for DOD, NASA, and the Coast Guard, unique supplies or services available from only one or a limited number of sources or from only one or a limited number of suppliers with unique capabilities

Existence of rights in data, patent rights, copyrights, or trade secrets; control of raw materials; or similar circumstances make supplies and services available from only one source

When acquiring utility services, if circumstances dictate that only one supplier can furnish the service, or when the contract is for construction of a part of a utility system and the utility company is the only source available to work on the system

When the agency head determines, in accordance with an agency’s standardization program, that only specified makes and models of equipment or parts satisfy the agency’s needs for additional units or replacement items, and only one source is available

Contracts must be supported by written justifications and approvals

Synopses of proposed contract actions must be published, and any resultant bids, proposals, etc. must be considered

An acquisition that uses a brand name description or other purchase description to specify a particular brand name, product, or feature of a product peculiar to one manufacturer does not provide for full and open competition regardless of the number of sources solicited

Unusual and compelling urgency

Unusual and compelling urgency precludes full and open competition, and delay in award of a contract would result in serious financial or other injury to the government

Contracts must be supported by written justifications and approvals; justifications may be made and approved after contract award when preparation and approval prior to award would unreasonably delay the acquisition

Agencies must still request offers from as many potential sources as practicable under the circumstances

Maintenance of the industrial base

Keep vital facilities or suppliers in business or make them available in the event of a national emergency

Train selected suppliers in the furnishing of critical supplies or services; prevent the loss of a supplier’s ability and employees’ skills; or maintain active engineering,



CRS-27


research, or development work

Maintain properly balanced sources of supply for meeting the requirements of acquisition programs in the interest of industrial mobilization

Limit competition for current acquisition of selected supplies or services approved for production planning under the DOD Industrial Preparedness Program to planned producers with whom industrial preparedness agreements for those items exist, or limit award to offerors who agree to enter into industrial preparedness agreements

Create or maintain the required domestic capability for production of critical supplies by limiting competition to items manufactured in the United States or its outlying areas or Canada

Continue in production contractors that are manufacturing critical items, when there would otherwise be a break in production

Divide current production requirements among two or more contractors to provide for an adequate industrial mobilization base

Establish or maintain an essential capability for theoretical analyses, exploratory studies, or experiments in any field of science or technology

Establish or maintain an essential capability for engineering or developmental work calling for the practical application of investigative findings and theories of a scientific or technical nature

Acquiring the services of either an expert to use in litigation or neutral persons (e.g., mediators, arbitrators) to facilitate alternative dispute resolution processes

Requirements of international agreements

When a contemplated acquisition is to be reimbursed by a foreign country that requires that the product be obtained from a particular firm as specified in official written directions

When a contemplated acquisition is for services to be performed, or supplies to be used, in the sovereign territory of another country and the terms of a treaty or agreement specify or limit the sources to be solicited

Except for DOD, NASA, and the Coast Guard, contracts must be supported by written justifications and approvals

Statutory authorization or acquisition of brand-name items for authorized resale

Federal Prison Industries (UNICOR) (18 U.S.C. §4124)

Qualified Nonprofit Agencies for the Blind or other Severely Disabled (41 U.S.C. §46-48c)

Government Printing and Binding (44 U.S.C. §§501-504, 1121)

Sole source awards under the 8(a) Program (15 U.S.C. §637)

Not to be used when a provision of law requires an agency to award a new contract to a specified non-federal government entity unless the law specifically identifies the entity involved; refers to 10 U.S.C. §2304(j) (for the armed services) or section 303(h) of the FPASA (for civilian agencies); and states that award shall be made in contravention of the procedures in CICA


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Sole source awards under the HUBZone Act of 1997 (15 U.S.C. §657a)

Sole source awards under the Veterans Benefits Act of 2003 (15 U.S.C. §657f)

Contracts must be supported by written justifications and approvals unless the statute expressly requires that procurement be made from specified sources

May be used only for purchases of brand-name commercial items for resale through commissaries or similar facilities

National security Disclosure of the Government’s needs would compromise the national security Not to be used merely because the acquisition is classified, or because access to classified matter will be necessary to submit a proposal or perform the contract


Synopses of proposed contract actions must be published

Agencies must request offers from as many potential sources as is practicable under the circumstances

Necessary in the public interest

Used when none of the other authorities apply Need written determination of the agency head; authority may not be delegated

Congress must be notified in writing of such determination not less than 30 days before award of the contract

This determination and finding shall not be made on a class basis




Author Contact Information Kate M. Manuel Legislative Attorney [email protected], 7-4477

GAO PRE AWARD PROTEST Department of NAVY’s & N3596A14RCCS017 and FEDBID 627729 LATVIAN CONNECTION LLC

Latvian Connection LLC 1083 Vine St. No 503 Healdsburg, CA 95448 Tel: 001 707 385 9344 June 28, 2014

BY REGISTERED EMAIL

General Counsel Government Accounting Office 441 G Street, NW Washington DC 20548 Email: [email protected] Attn: Procurement Law Control Group, Room 1139 RE: Pre Award Protest against FEDBID.COM and the U.S. Navy for violating the Small Business Act and

Competition in Contracting Act for COMPUTER EQUIPMENT PURCHASES under N3596A14RCCS017 and FEDBID 627729

Dear Procurement Law Group: Latvian Connection General Trading and Construction LLC, (“ LC LLC”) A Veteran Owned Business, Shareefa Complex, 5th Floor, Kuwait City, Kuwait, tel: [001 965 5012 2074]. Email: [[email protected]]¹ , ( DUNS 534749622 and CAGE SGM59, submits this PRE- AWARD Protest against the DEPARTMENT OF THE NAVY’s, for not setting aside EXCLUSIVELY for U.S. Small businesses, the solicitation for FBO N3596A14RCCS017 COMPUTER TERMINALS and PERIPERAL EQUIPMENT, a Reverse Auction on FEDBID Buy No. 627729 with a value of less than $ 150,000 without setting aside for U.S. Small Businesses and without posting a Justification and Approval for awarding a contract SOLE BRAND and circumventing the Competition in Contracting Act and violating the Small Business Act.

FEDBID.com (Exhibit 2) is a platform for U.S. Contracting Officer to circumvent the Federal Laws of the United States.

1. Routinely violate the Competition in Contracting Act by not posting Justifications and Approvals for Sole Brands 2. Routinely violates the Small Business Act for purchases inside the United States for routine commodity items

with a solicitation value of less than $ 150,000 3. In violation of FAR 15.206, routinely REPOST and not award to low bidder and fails to post the Contracting

Officer’s Amendment as to why the solicitation number has remained the same. 4. Fails to abide by archiving policies for Federal solicitations. 5. Assumes the Contracting Authority of the U.S. Navy without proper delegation of a SF1402 from the contracting

officer and lists itself on FBO where the contracting office and phone number belong for the United States Agency’s contracting office.

The Department of the Navy with the assistance of FEDBID have violated the Small Business Act and Competition in

Contracting Act and never issued a justification and approval for a SOLE BRAND. The Navy has circumvented the

CICA or the Small Business Act. (EXHIBITS 2, 10, 16, 17, 19, 20) ¹ ¹In accordance with 4 C.F.R. § 21.1 (c ) (1), the relevant electronic mail address for this protest is [email protected] ( Representative for the Protester Latvian Connection General Trading and Construction LLC) DUNS 534749622 and CAGE SGM59 ² The Contracting Office Representative for this procurement is Karen Jenkins, from the DEPARTMENT OF THE NAVY which has only listed its office address as DAHLGREN VA 22448 The email address for Contracting Office Representative is [email protected] , Phone 540 653 0311. This protest is also filed against FEDBID.com who have listed themselves as the contracting officer’s representative. Per FAR 33.103 Protests to the agency

mailto:[email protected]�


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( 2 ) Latvian Connection LLC 1083 Vine St. No 503 Healdsburg, CA 95448 Tel: 001 707 385 9344

The U.S. Government Accountability Office (“GAO”) should sustain this protest, stay the performance of the

Contract, and direct the US NAVY to post this solicitation on FEDBIZOPPS for Fair and Open competition according to

the Competition in Contracting Act and SETS ASIDE to exclude Foreign companies and Large businesses in accordance

with the Small Business Act.

INTERESTED PARTY STATUS

As discussed below LATVIAN CONNECTION LLC is denied competing for solicitation FEDBID.COM 627729

FBO N3596A14RCCS017 (Exhibits 1) because the solicitation should have been reserved exclusively for U.S. Small

Businesses as required by Federal Law. The solicitation should have been for Brand Name or Equal. Other than U.S.

Small Businesses were invited by not setting aside the solicitation and the Competition in Contracting Act was

circumvented by NOT posting a reason for a SOLE BRAND as required by Federal Law. LATVIAN CONNECTION

LLC incorporates all the below facts and Exhibits into this “Interested Party Status” section. Further, if this protest is

sustained and Department of NAVY’s NAVSEA NSWC – Dahlgren for FEDBID.COM 627729; FBO

N3596A14RCCS017, and evaluates LATVIAN CONNECTION LLC’s proposal, then LATVIAN CONNECTION LLC,

responsible offeror – will have a reasonable chance of winning the Contract if competing ONLY against other U.S. Small

Businesses. Therefore, LATVIAN CONNECTION LLC is an actual offeror whose direct economic interest is affected by

the award of the Contract and hence, an interested party. 31 U.S.C. § 3551 (2000); FAR 33.101; 4 C.F.R. § 21.0(a)(2006);

Designer Assoc. , Inc.,B-293226, FEB 12, 2004 C.P.D. ¶ 114 at 2. This is a Pre-Award Protest

filed within 10 days of the

basis of knowledge of the FEDBID posting on undisclosed date, but before the bid due in date of 23 JUN 2014 for which

there has been no known award made.

TIMELINESS OF THIS PROTEST

The Post-Award

dated June 26, 2014 and is timely if filed before 10 days of the basis which was the posting on 26 JUNE 2014:

protest against the Department of NAVY’s solicitation N3596A14RCCS017

§ 21.2 Time for filing: (a)(1) Protests based upon alleged improprieties in a solicitation which are apparent prior to bid opening or the time set for receipt of initial proposals shall be filed prior to bid opening or the time set for receipt of initial proposals. In procurements where proposals are requested, alleged improprieties which do not exist in the initial solicitation but which are subsequently incorporated into the solicitation must be protested not later than the next closing time for receipt of proposals following the incorporation. (2) Protests other than those covered by paragraph (a)(1) of this section shall be filed not later than 10 days after the basis of protest is known or should have been known (whichever is earlier), with the exception of protests challenging a procurement conducted on the basis of competitive proposals under which a debriefing is requested and, when requested, is required. In such cases, with respect to any protest basis which is known or should have been known either before or as a result of the debriefing, the initial protest shall not be filed before the debriefing date offered to the protester, but shall be filed not later than 10 days after the date on which the debriefing is held. The bid is due in July 3, 2014 and this Pre-Award Protest is filed before that date.

3 | P a g e JUNE 28, 2014


The basis is this protest is the solicitation is not SET ASIDE for U.S. Small Businesses and there is no justification and

approval for awarding a contract sole brand which is against the Competition in Contracting Act. The fact that there are

dozens of acceptable brands available that meet the specifications could provide a substantial savings to the United States

Government. U.S. Small Businesses have been harmed by this contracting office violating the Small Business Act and

Latvian Connection LLC, as a Veteran Owned Small Business requests that the GAO refer this Pre-Award Protest to the

Small Business Administration for their comments.

FACTUAL GROUNDS OF THE PROTEST

1. The RFQ The Department of the Navy, NAVSUP Fleet Logistics Center Norfolk, are conducting sole brand solicitation and with

the aid of FEDBID.com, DUNS 020792268, CAGE 4AJS6, ARE circumventing both the Competition in Contracting Act

by eliminating competition without the required Justification and Approval and by circumventing the Small Business Act

for a solicitation with a value under $ 150,000. The solicitation should have been SET-ASIDE for U.S. Small Businesses.

Latvian Connection LLC is a Veteran Owned Small Business Latvian Connection that should not be competing against

Corporations or Foreign Owned business that the Navy have invited with their actions to NOT EXCLUDE all except U.S.

Small Businesses.

II.

LATVIAN CONNECTION LLC’s Proposal

LATVIAN CONNECTION LLC, a U.S. Veteran Owned Business whose owner is a Retired US Air Force Master

Sergeant that served 28 years in the military and served in Iraq and has offices in California and Kuwait. Latvian

Connection LLC is denied an opportunity to bid and compete against only other U.S. Small Businesses

and has been

harmed by the Navy’s contracting office and by FEDBID.com.

Request of a ruling by the Comptroller General of the United States

LATVIAN CONNECTION LLC specifically requests that the GAO recommend that the award of N3596A14RCCS017 /

FEDBID 627729 be stayed and that the GAO recommend that the Air Force to post a copy of the solicitation for full and

open competition and that the Small Business Act be honored and the solicitation is set aside for U.S. Small Businesses

that EXCLUDES all bidders except qualified U.S. Small Businesses.

Under the Small Business Jobs Act of 2010 (the “Jobs Act”), there is a presumption of loss equal to the value of the

contract or other instrument when a concern willfully seeks and receives an award by misrepresentation. Pub. L. No. 111-

240. This provision applies to prime contracts, subcontracts, cooperative agreements, cooperative research and

development agreements, and grants (collectively, “Federal Procurements”). In the final rule issued on June 28, 2013

implementing a part of the Jobs Act, the Small Business Administration (“SBA”) noted that the presumption of loss will

be applied in all criminal, civil, administrative, contractual, common law, or other actions in which the government seeks

to redress willful misrepresentation. 78 F.R. 38811 (6/28/13). There seems to be an Organizational Conflict of Interest

4 | P a g e JUNE 28, 2014


when the very same Government are WILLFULLY circumventing the Small Business Act and the Competition in

Contracting Act.

In this case, the loss to U.S. Small Businesses is due to willful actions of the Navy contracting office to allow companies

that should be excluded from competing (Large and Foreign) with the willful assistance of FEDBID.com.

REQUEST FOR HEARING OR CONFERENCE AND PROTECTIVE ORDER

If the issues in this case cannot be resolved on the basis of the documents requested, then LATVIAN CONNECTION

LLC requests a hearing on all of the matters set forth above. 4 C.F.R. § 21.1 (d)(2008). Latvian Connection LLC does not

request a protective order.

LEGAL GROUNDS OF PROTEST

There is Overwhelming Evidence that LATVIAN CONNECTION LLC was prejudiced by the Department of Navy’s

NAVSUP Fleet Logistics Center Norfolk regarding its sole brand solicitation of RFQ N3596A14RCCS017 and

FEDBID 627729.

I. Latvian Connection LLC is being forced to compete against Foreign Owned and Large Business by the bid

rigging actions of the Navy’s contracting office and the dishonest activities of FEDBID.com.

II. The legal grounds that support this Pre-Award Protest are:

Contracting agencies are to avoid even the appearance of impropriety in government procurements. FAR §

3.101-1; Guardian Techs. Int’l., B-270213 et al., Feb. 20, 1996, 96-1 CPD ¶ 104 at 5.

There is the appearance of impropriety by the Department of Navy’s about not competing

N3596A14RCCS017 and the appearance of favoritism in steering and concealing this contract and violating

the Competition in Contracting Act by not allow Brand Name or Equal and bypassing the Small Business Act.

(the overarching principle codified in the Competition in Contracting Act is that agencies provide impartial,

fair, and equitable treatment for each contractor); Dubinsky v. United States, 43 Fed. Cl. 243, 259 (1999)

(making offerors aware of the rules of the game in which they seek to participate is fundamental to fairness

and open competition). (Finlen Complex, Inc., B-288280, October 10, 2001)

When using simplified acquisition procedures, agencies must promote competition “to the maximum extent

practicable.” 10 U.S.C. § 2304(g)(3) (2012). In meeting this requirement, agencies must make reasonable

efforts, consistent with efficiency and economy, to afford all eligible and interested vendors an opportunity to

compete

. S.D.M. Supply, Inc., B-271492, June 26, 1996, 96-1 CPD ¶ 288 at 4.

The GAO has stated that in conducting simplified acquisitions to ensure that the procurements are conducted

consistent with a concern for fair and equitable competition and with the terms of the solicitation. Russell

Enters. of N. Carolina, Inc., B-292320, July 17, 2003, 2003 CPD ¶ 134 at 3.

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=gao_comptroller_general&docid=f:288280.txt�

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When evaluation criteria are written in the manner utilized here by the agency, and where proposals are to be

evaluated for technical merit on a qualitative basis, an offeror can reasonably expect that a proposal that

exceeds the minimum requirement will receive a more favorable evaluation

The specifications for this solicitation are vague and don’t make clear the driver’s qualifications that are

required.

than one that merely meets the

requirement. See Trijicon, Inc., B-244546, Oct. 25, 1991, 91-2 CPD ¶ 375 at 5.

The GAO have state that FEDBID has dismal results with its analysis that FEDBID receives no bids on 1/3 of

the postings and another 1/3 have less than 2 bids. This is a great platform for bid rigging – no competition

and it certainly is not market research.

The U.S. Navy are violating DoD Directives about setting aside for U.S. Small Businesses. (Exhibit 10)

Section 15U) of the Small Business Act and the Federal Acquisition Regulation (FAR) at FAR 13 .003(b)(l), require contracting officers to set aside contracts above the $3,000 micro-purchase threshold and below the $150,000 SAT for small business, unless the contracting officer determines there is not a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in terms of market prices, quality and delivery. This is known as the "rule of two." FAR 19.502- 2(a) requires the contracting officer to document the file if a set-aside is not used in connection with the award of a contract in this dollar range. It is deceitful, and disingenuous for the Navy

to make an assumption that there are not at least 2 U.S. Small Businesses

that can compete for this requirement. FEDBID.com has a responsibility to uphold the Federal Laws of the United States

and the Small Business Act and DoD Directives instead of aiding what appears to be a violation of Federal Law – The

Small Business Act and the Competition in Contracting Act. FEDBID.com are nothing more than another DoD contractor

(Exhibit 2) to Latvian Connection LLC and this DoD company along with Board Member Retired General Casey and

Obama OFPP appointee, Joseph Jordan, who abandoned his Presidential post appear to be providing a platform

by which to cheat U.S. Small Businesses from opportunities under the pretense that there are not at least 2 U.S. Small

Business that can compete for this solicitation N3596A14RCCS017 and FEDBID 627729.

The 112th Congress’ SMALL BUSINESS CONTRACTING ACT of 2012 states there are no exclusions or restrictions to the

Act. FAR 19.601 (e) specifically states:

(e) Contracting officers, including those located overseas, are required to comply with this subpart for U.S. small

business concerns.

This Pre-Award protest will show the legal opinions already given by Small Business Administration lawyer, Mrs. Laura Mann Eyester B-407391(Exhibit 16 & 17) where the SBA Senior Attorney Mrs. Mann Eyester and SBA Associate General Counsel John W. Klein have stated: 48 C.F.R. § 2.101 The Small Business Act states that small business set-asides are mandatory for the acquisition of supplies and services valued from $ 2,500 to $ 100,000. 15 U.S.C. § 644 (j)(1). However 41 U.S.C. § 431a(a) (1) states that the “Federal Acquisition Regulatory[FAR] Council shall adjust each acquisition-related dollar threshold provided by law, as described in subsection (c) of this section to the baseline constant dollar value of that threshold.” The FAR Council published a final rule on August 30, 2012, which

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implemented these inflationary adjustments. 75 Fed. Reg. 53129. As a result of 41 U.S.C. § 431a and the final rule, the FAR now states:

(a) Before setting aside an acquisition under this paragraph, refer to 19.203(b). Each acquisition of supplies or services that has an anticipated dollar value exceeding $ 3,000 ($15,000 for acquisitions as described in 13.201(g)(1), but not over $ 150,000 ( $ 300,000 for acquisitions described in paragraph (1) of the Simplified Acquisition Threshold definition at 2.101), is automatically reserved exclusively for small business concerns and shall be set aside for small business unless the contracting officer determines there is not a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in terms of market prices, quality, and delivery. If the contracting officer does not proceed with a small business set-aside and purchases on an unrestricted basis, the contracting officer shall include in the contract file the reason for this unrestricted purchase. If the contracting officer receives only one acceptable offer from a responsible small business concern in response to a set-aside, the contracting officer should exclusively for the small business concerns unless the contracting officer is unable to obtain offers from two or more small business concerns that are competitive with market prices and are competitive with regard to quality and delivery of the goods and services being purchased. (Exhibit 20 pg 2-3)

President Obama’s Executive Office of the President, Office of Management and Budget issued a Memorandum on the subject of a April 25, 2012 meeting of the Small Business Procurement Group (Exhibit 10) and this memo from Joseph G. Jordan, Administrator for Federal Procurement Policy, and Karen G. Mills, Administrator of the Small Business Administration state that there were “immediate steps to ensure small businesses are utilized to the maximum extent possible.” Maximizing Opportunities for Small Businesses under the Simplified Acquisition Threshold “ Pursuant to longstanding statutory requirements in the Small Business Administration Act, agencies are required to automatically set aside work for small businesses that is equal to or less that the value of the Simplified Acquisition Threshold (SAT) (generally $ 150,000) unless the contracting officer determines the “rule of two” cannot be met

terms of market prices, quality, and delivery. There are more than 5 U.S. Small Businesses in the Middle East Region, SMI-USA LLC, Trade Links USA LLC, American General Trading, and Latvian Connection LLC.

– ie. There is not a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in

Note FEDBID.com employee’s name. Joseph Jordan in President Obama’s Memo. This is what POGO refers to as the

revolving door.

Mr. Jordan and Ms Mills go on to say that a third-party analysis of the Federal Procurement Data System suggest that a significant amount of work under the SAT is not going to small businesses, including for products and services in industries where small businesses are typically well represented. This suggests that opportunities for small businesses are being lost, and that agencies must take additional steps to consistently apply set-asides

in the manner prescribed by law and regulation.

The Department of the Navy and the Pentagon are actively prejudicing U.S. Small Businesses with the direct collusion of

FEDBID.com and by the lack of enforcement of the Department of Justice and the Small Business Administration.

Now it appears that Mr. Jordan is assisting FEDBID in circumventing the very Federal Laws that he and SBA Director

Karen Mills pointed out – that Small Business Set Asides are “not going to small businesses.” This does more than

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suggest opportunities are being lost in this case, the Small Business Act is being violated with the assistance and direction

of the United States Navy, the Pentagon, and with the direct assistance, aiding and abetting of FEDBID.com.

Public Law 95-507, The Small Business Act (Exhibit 3, pg 2) On October 24, 1978, President Carter signed Public Law 95-507 amending the Small Business Act and the Small Business Investment Act of 1958, making federal procurement contracting more readily accessible to all small businesses. PL 95-507 stipulates that it is the policy of the Government to provide maximum practicable opportunities in its acquisitions to small businesses, small disadvantaged businesses and women-owned businesses. This stipulation also extends to having the the head of each agency be responsible for effectively implementing the small business programs within his agency, including setting and achieving yearly procurement opportunity program (POP) goals for small and small disadvantaged business contracting.

FAR 6.203-206 & 19.5/219.5 (Exhibit 3) From the Defense Procurement Acquisition and Policy Defense Pricing DOMESTIC PREFERENCE RESTRICTIONS

AFFECTING PURCHASES BY, OR ON BEHALF OF, DoD table,

As the Senior Attorney from the Small Business Administration, Laura Manneyster stated in her review comments to the GAO for B-407391 (Exhibit 16), Protest of Latvian Connection LLC, Request for Reconsideration, Dec 12, 2012, § 15(j) of the Small Business Act, § 19.502-2 of the Federal Acquisition Regulations. (FAR), and GAO rulings on small business set-asides, all of which state that small business set-asides below the Simplified Acquisition Threshold (SAT) are automatic; in other words, a contracting officer must set-aside the acquisition for small business unless he/she can demonstrate that the agency will not receive at least two competitive offers from small businesses. First, the Small Business Act provides for an automatic set-aside, or reservation, for small businesses for acquisitions valued below SAT as follows: (j)Small business reservation (1) Each contract for the purchase of goods and services that has an anticipated value of greater than $ 2,500 but not greater than $ 100,000 shall be reserved exclusively for small business concerns unless the contracting officer is unable to obtain offers from two or more small business concerns that are competitive with the market prices and are competitive with regard to the quality and delivery of the goods or services being purchased. 15 U.S.C. § 644 ( emphasis added). In other words, every acquisition under the SAT is reserved for small businesses

unless

the contracting officer will be unable to obtain offers from two or more small businesses. Moreover, the statute

states that it is up to the contracting officer – not a specific small business advocating for a small business set-aside,

not SBA, and not any other entity – to perform adequate market research to be able to make a determination that there

are not at least two small businesses capable of performing the requirement. (Exhibit 16 )

19.502-1 Requirements for setting aside acquisitions. (Exhibit 3) (a) The contracting officer shall set aside an individual acquisition or class of acquisitions for competition among small businesses when— (1) It is determined to be in the interest of maintaining or mobilizing the Nation’s full productive capacity, war or national defense programs; or

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(2) Assuring that a fair proportion of Government contracts in each industry category is placed with small business concerns; and the circumstances described in 19.502-2 or 19.502-3

(a) exist.

19.502-2 Total small business set-asides. (Exhibit 3) (a) Each acquisition of supplies or services that has an anticipated dollar value exceeding $3,000 ($15,000 for acquisitions as described in 13.201(g)(1)), but not over $100,000 ($250,000 for acquisitions described in paragraph (1) of the Simplified Acquisition Threshold definition at 2.101

), is automatically reserved exclusively for small business concerns and shall be set aside for small business unless the contracting officer determines there is not a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in terms of market prices, quality, and delivery. If the contracting officer does not proceed with the small business set-aside and purchases on an

unrestricted basis, the contracting officer shall include in the contract file the reason for this unrestricted purchase. If the contracting officer receives only one acceptable offer from a responsible small business concern in response to a set-aside, the contracting officer should make an award to that firm.

resolicited on an unrestricted basis. The small business reservation does not preclude the award of a contract with a value not greater than $100,000 under

If the contracting officer receives no acceptable offers from responsible small business concerns, the set-aside shall be withdrawn and the requirement, if still valid, shall be

Subpart 19.8, Contracting with the Small Business Administration, under 19.1007(c), Solicitations equal to or less than the ESB reserve amount, or under 19.1305

, HUBZone set-aside procedures.

19.502-5 Insufficient causes for not setting aside an acquisition. (Exhibit 3) None of the following is, in itself, sufficient cause for not setting aside an acquisition: (a) A large percentage of previous contracts for the required item(s) has been placed with small business concerns. (b) The item is on an established planning list under the Industrial Readiness Planning Program. However, a total small business set-aside shall not be made when the list contains a large business Planned Emergency Producer of the item(s) who has conveyed a desire to supply some or all of the required items. (c) The item is on a Qualified Products List. However, a total small business set-aside shall not be made if the list contains the products of large businesses unless none of the large businesses desire to participate in the acquisition. (d) A period of less than 30 days is available for receipt of offers. (e) The acquisition is classified. (f) Small business concerns are already receiving a fair proportion of the agency’s contracts for supplies and services. (g) A class small business set-aside of the item or service has been made by another contracting activity. (h) A “brand name or equal” product description will be used in the solicitation.

19.502-4 Methods of conducting set-asides. (Exhibit 3) (a) Total small business set-asides may be conducted by using simplified acquisition procedures (see Part 13), sealed bids (see Part 14), or competitive proposals (see Part 15). Partial small business set-asides may be conducted using sealed bids (see Part 14), or competitive proposals (see Part 15

).

Mr. Smith did not exclude foreign businesses from this solicitation for the construction project ( Exhibit 1) as required by Federal statutes. (Exhibit 3) 15 U.S.C. §644(j): “Each contract for the purchase of goods and services that has an anticipated value greater than $2,500 but not greater than $100,000 (recently raised to $3,000 and $150,000) shall be reserved exclusively for small business concerns.”

The interim rule issued by DoD, GSA and NASA provides for the use of small business set-asides on GSA Schedule contracts but only at the discretion of the federal agency. This is unacceptable in particular because when federal regulators originally passed a rule at section 8.4 of the FAR exempting GSA Schedule contracts from FAR 19, they exceeded the scope of their authority and went against the original congressional intent of the Small Business Act. The interim rule is nothing more than an egregious attempt on the part of federal regulators to grant federal agencies the authority to decide whether or not to recognize the constitutional rights of small business concerns. Moreover, in 2007 the Small Business Administration offered a legal opinion to the GAO, which stated that, “according to statute and regulations, small business set asides are mandatory for acquisitions valued from $3,000 to $100,000

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(upgraded to $150,000 in 2011) and take priority over GSA Schedule contracts. This interpretation is consistent with the declared and unambiguous intent of Congress as it relates to Federal procurement and small Businesses.” In other words, agencies do not have any latitude on the matter. This legal opinion has once again been made by the SBA in November 2012. ( Exhibits 16 & 17 )

(Exhibit 3) FAR Part 19 also recognizes VOSBs, see FAR § 19.201(a) (“It is the policy of the Government to provide maximum practicable opportunities in its acquisitions to small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns.”) (emphasis added), although no separate VOSB program like the set-aside program for SDVOSBs is found in FAR Part 19. Latvian Connection LLC is a VOSB Veteran Owned Small Business as applicable to FAR Part 19 and the Small Business Act.

Memo from Office of Under Secretary of Defense, July 12, 2012 (Exhibit 10) From Richard Ginman, Director of Defense Acquisition and Procurement Policy Andre’ J. Grudger, Director of Small Business Programs Subject: Increasing Opportunities for Small Business through Small Business Set-Asides under the Simplified Acquisition Threshold.

(Exhibits 16 & 17 ) In the legal opinion and analysis of B-407391, SBA’s Senior Attorney stated that the GAO gave deference to the SBA’s interpretation of its statute, citing Chevron, U.S.A., Inc. v Natural Resources Defense Council Inc., 467 U.S. 837(1984) and the GAO state that wen a statute under consideration creates a program to be administered by the SBA” it is the views of the SBA, rather than [another agency], to which our Office will afford deference.” General Service Administration – Reconsideration

, B-406040.2, Oct 4, 2012. In this case, we are interpreting 15 U.S.C. §§ 644(a) & 644(j), which are set forth in § 15 of the Small Business Act. The Small Business Act specifically provides that: “ Small Business Administration’ ( herein referred to as the Administration)…” 15 U.S.C. § 633. Congress granted SBA the authority to administer the Act. As a result, GAO must afford SBA deference over the FAR in creating policy and interpreting the Small Business Act, especially when the two conflict. SBA’s regulations on this issue state the following:

(f) Contracting Among Small Business Programs (1) Acquisitions Valued At or Below the Simplified Acquisition Threshold. The contracting officer shall set aside acquisition with an anticipated dollar value exceeding the Micro-Purchase Threshold but not exceeding the Simplified Acquisition Threshold (defined in the FAR at 48 CFR 2.101) for small business concerns when there is reasonable expectation that offers will be obtained from at least two small business concerns that are competitive

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terms of quality, and delivery and award will be made at fair market prices. The SBA Senior attorney went on to state that 13 C.F.R. § 125.2 (f); 13 C.F.R. §§ 124.503(j), 125.19(b), 126.607(b), 127.503(d), SBA’s regulations require a contracting officer to set-aside all acquisitions valued above or below the simplified acquisition threshold for small businesses, including those awarded and/or performed overseas, if market research indicates that the “rule of two” may be met. As a result, we believe that the FAR is inconsistent with SBA’s regulations and the SBA’s regulations should control. See C & G Excavating, Inc., v U.S,

32 Fed.C1. 231, 239 (1994) (Where there is a conflict between SBA’s regulations on the COC program and the FAR “the SBA’s procedures

generally should control, especially considering that the SBA is the agency charged with issuing COC’s, not DoD, GAO, or NASA.”) Hawpe Const., Inc., v U.S.

46 Fed.C1. 571, 582 (2000) (Conflicts between FAR and SBA regulations should be resolved by looking to the SBA’s latest intent on the issue and by relying on the SBA to determine which provision best implements the policies of the agency itself.”)

Finally, we note that GAO has addressed this issue already, with respect to the SBA’s COC Program. In Discount Machinery & Equipment. Inc., the Panama Canal Commission believed that FAR § 19.000(b) precluded the SBA’s review of any Federal procurement if the procuring agency is located outside the United States. The GAO stated that: Based on our review of the Small Business Act and the applicable regulations, we find that the location of the Contracting agency has no bearing on the applicability of SBA’s COC program. Nothing in the Small Business Act imposes any geographic limitation regarding a contracting agency’s location which would exempt procurements from the Act’s coverage. Rather the factor which determines whether a small business concern qualifies for SBA’s COC proceedings is the nationality of the business. The SBA Senior attorney went on to cite one more case to show that the Small Business Act does apply overseas. Discount Machinery & Equipment, Inc.,

70 Comp. Gen. 108, B-240525, 90-2 CPD ¶ 420 (1990) (Emphasis added ) Interestingly, the GAO further states that it believes the Small Business Administration Act applies to agencies located outside the United States.

This legal analysis was given by SBA Senior Attorney Laura Mann Eyester and SBA’s Associate General Counsel for Procurement Law, John Klien,. (Exhibits 16 & 17) Prejudice requires a reasonable likelihood that Latvian Connection LLC would have been awarded the Contract if we had been allowed the opportunity had been conducted as a Small Business Set-Aside that fell into the U.S. Dollar value range of $ 3,000 to $ 1,000,000. Such a determination is not susceptible to a precise mathematical calculation; rather, prejudice requires only that “but for the agency’s actions, the protestors would have had a reasonable chance of receiving the award. Anthem Alliance for Health, Inc., TRICARE Management Activity – Reconsideration, B-278189.5, July 13, 1998, 98-2 CPD 66. A reasonable possibility of prejudice therefore is sufficient to sustain the protest. United Int’l. Eng’g., Inc., B-245448.3, Jan 29, 1992, 92-1 C.P.D. ¶ 122. Europe Displays, Inc., B-297099. The fact that NAVSUP Fleet Logistics Center Norfolk conducted a solicitation that is not a total small business set-aside has prejudiced Latvian Connection LLC.

The Competition in Contracting Act states:

Under CICA, 41 U.S.C. sect. 253(a)(1)(A), contracting officers have a duty to promote and provide for competition and to provide the most advantageous contract for the government. In their role of promoting and providing for competition, contracting officials must act affirmatively to obtain and safeguard competition; they cannot take a passive approach and remain in a noncompetitive position where they could reasonably take steps to enhance competition. VSE Corp., Johnson Controls World Servs., Inc., B-290452.3 et al., May 23, 2005, 2005 CPD para. 103 at 8; HEROS, Inc., B-292043, June 9, 2003, 2003 CPD para. 111 at 7; National Aerospace Group, Inc., B-282843, Aug. 30, 1999, 99-2 CPD para. 43 at 8. See also S. Rep. No. 98-50, at 18 (1984), reprinted in 1984 U.S.C.C.A.N. 2174, 2191 (stating that CICA

Regarding sole brand without a Justification and Approval – the Navy are steering the contract and limiting competition

which is not in the best interest of the United States tax payer.

http://www.wifcon.com/cgen/297099.pdf�

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requires agencies to “make an affirmative effort to obtain effective competition”). CICA further provides that under no circumstance may noncompetitive procedures be used due to a lack of advance planning by contracting officials. 41 U.S.C. sect. 253(f)(5)(A); Signals & Sys., Inc., B-288107, Sept. 21, 2001, 2001 CPD para. 168 at 9. Although the requirement for advance planning is not a requirement that such planning be successful or error-free, see Abbott Prods., Inc., B-231131, Aug. 8, 1988, 88-2 CPD para. 119, at 8, the advance planning must be reasonable. Signals & Sys., Inc., supra, at 13. Here, we conclude that the agency has failed to comply with the CICA mandate for reasonable advance planning.

III.

The UNITED STATES NAVY is being Unreasonable

By NAVSUP Fleet Logistics Center Norfolk Contracting Officer not

SETTING ASIDE FOR US SMALL BUSINESSES

and NOT allowing Brand Name or Equal for RFQ N3596A14RCCS017 and FEDBID 627729 as required by the

Competition in Contracting Act and fabricating fictitious statements that in the entire United States, there are NOT 2 U.S.

Small Businesses, the United States Navy has harmed Latvian Connection LLC and its opportunities to bid against ONLY

U.S. Small Businesses. By not exclusively reserving this solicitation for U.S. Small Businesses, the contracting

procurement process has been compromised.

The GAO has stated: “However, an agency must undertake reasonable efforts to ascertain whether it is likely that it will

receive offers from at least two small businesses capable of performing the work. Id. Our Office will review a protest of

an agency determination not to set aside a procurement to determine whether the contracting officer has undertaken

reasonable efforts to ascertain the availability of capable small businesses. Id.

The United States Navy did not conduct a Sources Sought to determine if U.S. Small Businesses were interested and the

U.S. Navy did not conduct a Pre-Solicitation. The U.S. Navy has bypassed the Small Business Act and the Competition

in Contracting Act with its arbitrary and capricious decision to not SET ASIDE for U.S. Small Businesses on such a

common commodity as computers and peripheral devices.

It is unreasonable to conduct a solicitation for just 7 days and assume that there are not at least 2 Small Businesses that

would compete. The GAO report suggests that U.S. Small Businesses don’t trust FEDBID.com, not that there are not

U.S. Small Businesses that will not compete for commodity items. The FAR only recognizes www.FBO.gov as the

platform to conduct U.S. Government contracting. – NOT FEDBID. The United States Navy and the Pentagon are

cheating U.S. Small Businesses by utilizing FEDBID.com and its unfair businesses practices of not awarding consistently

to the low bidder – but instead have endless reposts against FAR 15.206 and without Amendments. This is not market

research to depend upon the dismal responses of FEDBID and assume there is not 2 U.S. Small Businesses out of the

entire United States supply businesses from the U.S. Census Bureau statistics of U.S. Small Businesses. The number of

qualified U.S. Small Businesses that would compete on solicitation N3596A14RCCS017 and FEDBID 627729

is greater than 2. This decision by the U.S. Navy to not set aside deserves an investigation from the Small Business

Administration and the Department of Justice.

http://www.fbo.gov/�

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IV.

LATVIAN CONNECTION LLC LLC Has Been Prejudiced

Prejudice requires a reasonable likelihood that LATVIAN CONNECTION LLC LLC would have been

awarded the Contract based on a fair evaluation of LATVIAN CONNECTION LLC LLC’s bid AGAINT ONLY U.S.

Small Businesses. Such a determination is not susceptible to a precise mathematical calculation; rather, prejudice

requires only that “but for the agency’s actions, the protestors would have had a reasonable chance of receiving the

award. Anthem Alliance for Health, Inc., TRICARE Management Activity – Reconsideration, B-278189.5, July 13,

1998, 98-2 CPD 66. A reasonable possibility of prejudice therefore is sufficient to sustain the protest. United Int’l.

Eng’g., Inc., B-245448.3, Jan 29, 1992, 92-1 C.P.D. ¶ 122. Europe Displays, Inc., B-297099. Latvian Connection

LLC has been prejudiced by

US NAVY’s violation of the Competition in Contracting Act and Small Business Act to

invite Foreign and Large Business to compete in a competition that should be reserved exclusively for U.S. Small

Businesses.

REQUEST FOR DOCUMENTS

LATVIAN CONNECTION LLC LLC requests that the following materials be included in the agency

report, pursuant to 4 C.F.R. § 21.1(d)(2008):

• All Market Research to suggest that there were no Small Businesses that could perform • A copy of the Justification and Approval to sole source contract award F6FGAC4125A001 • The SF 2579 – Small Business Coordination Record • All Market Research regarding Set-Aside Businesses including SAM.gov and the Small Business

Administration’s Dynamic listing (Exhibit 6) • Bid Abstract and Evaluations • All emails, memo for record, regarding this solicitation with Foreign companies & Large Businesses • All documents that refer or relate to the efforts to obtain competition from U.S. Registered Small

Businesses. • All documents that refer or relate to the efforts to increase competition • All documents that refer or relate to the Contracting Officer’s Market Research

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REQUEST FOR RELIEF AND CONCLUSION

LATVIAN CONNECTION LLC LLC requests that the U.S. Navy take corrective action and cancel the award of

N3596A14RCCS017 and FEDBID 627729 and solicit as a Total Small Business Set Aside ; and post the solicitation

on www.fbo.gov and set aside the solicitation for U.S. Small Businesses. We also request that the U.S. Navy cease using

FEDBID.com and perform market research with the Small Business Administration and their Dynamic Database of Small

Businesses; conduct Sources Sought and Pre-Solicitations and utilize the ONLY Federal Acquisition Government Point of

Entry – www.fbo.gov . For the U.S. Navy to rely on FEDBID.com’s record of 2/3 of all solicitations having less than 2

bids (Exhibit 4) is not MARKET RESEARCH, it is a hustle against the U.S. Small Businesses

We must emphatically request that this important protest be sent to the Small Business Administration for their review

and comments.

of the United States and

ex-Obama appointee Joseph Jordan who has abandoned an important assignment in order to assist FEDBID steal U.S.

Small Business contracts from U.S. Small Businesses, Service Disabled Veteran Owned Small Businesses, Veteran

Owned Small Business, minority owned Small Businesses and Women Owned Small Businesses.

We also request that LATVIAN CONNECTION LLC LLC be reimbursed the costs of filing and pursuing its protest,

including reasonable protest preparation fees. Bid Protest Regulations 4 C.F.R. § 21.8(d)(1) (2010).

New When a procuring agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs where, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. 4 C.F.R. § 21.8(e) (2013); AAR Aircraft Servs.--Costs, B-291670.6, May 12, 2003, 2003 CPD ¶ 100 at 6. When an agency takes corrective action before the due date set for receipt of the agency report, our Office views such action as prompt and will not recommend the reimbursement of costs. The Sandi-Sterling Consortium--Costs, B-296246.2, Sept. 20, 2005, 2005 CPD ¶ 173 at 2-3.

Under the Competition in Contracting Act of 1984, the GAO may recommend that protest costs be reimbursed where they find that an agency’s action violated a procurement statute or regulation. 31 U.S.C. § 3554(c)(1) (2010). The GAO’s Bid Protest Regulations provide that, where the contracting agency decides to take corrective action in response to a protest, the GAO may recommend that the protester be reimbursed the costs of filing and pursuing its protest, including reasonable attorneys’ fees. 4 C.F.R. § 21.8(e) (2010). The GAO has stated that it “does not mean that costs should be reimbursed in every case in which an agency decides to take corrective action; rather, a protester should be reimbursed its costs where an agency unduly delayed its decision to take corrective action in the face of a clearly meritorious protest. Griner’s-A-One Pipeline Servs., Inc.--Costs

, B-255078.3, July 22, 1994, 94-2 CPD ¶ 41 at 5.

Respectfully submitted,

__________________________ Keven L. Barnes

CEO Latvian Connection LLC

http://www.fbo.gov/�

United States Government Accountability Office Washington, DC 20548

July 1, 2014 Keven Barnes Latvian Connection, LLC File: B-410000

Protester: Latvian Connection, LLC

Agency: Naval Supply Systems Command

Solicitation No.: N3596A-14-r-CCS017

Report Due: 07/30/2014 Decision Due: 10/08/2014

GAO Attorney: Noah B. Bleicher Phone: 202-512-5078

Official Fax: 202-512-9749 Case Status: 202-512-5436

ACKNOWLEDGMENT OF PROTEST We have received your protest concerning the referenced procurement. The contracting agency is required to file a report in response to the protest by the Report Due date indicated above. Under our Bid Protest Regulations, 4 C.F.R. § 21.3(i), you are required to submit written comments in response to the report. Written comments must be received in our Office within 10 calendar days of your receipt of the report--otherwise, we will dismiss your protest. For purposes of determining when your response to the agency report must be submitted, we will assume that you received the report by the Report Due date unless you notify us otherwise at that time. Also, the agency has been advised that if you have filed a request for specific documents, the agency should provide to all parties and GAO, at least 5 days prior to the Report Due date, a list of those documents, or portions of documents, that the agency has released to the protester or intends to produce in the report, and of the documents that the agency intends to withhold and the reasons for the proposed withholding. You are requested to object to the scope of the agency’s proposed disclosure or nondisclosure with GAO and the other parties within 2 days of receipt of the list.

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GAO bid protest decisions not subject to protective orders are distributed via the GAO Worldwide Web Internet site (www.gao.gov), and in most cases are available within 1 business day of the decision date. We will provide you or your representative e-mail notice of the availability of the decision on this protest upon issuance if you furnish us the e-mail address. Please refer to our file number in all future correspondence regarding the protest. --For the Managing Associate General Counsel

United States Government Accountability Office Washington, DC 20548

July 1, 2014 Michelle Davis Naval Supply Systems Command File: B-410000

Protester: Latvian Connection, LLC

Agency: Naval Supply Systems Command

Solicitation No.: N3596A-14-r-CCS017

Report Due: 07/30/2014 Decision Due: 10/08/2014

GAO Attorney: Noah B. Bleicher Phone: 202-512-5078

Official Fax: 202-512-9749 Case Status: 202-512-5436

CONFIRMATION OF REPORT REQUIREMENT

This confirms our telephonic notice of the protest and report due date indicated above. Please advise us immediately of the individual(s) that will be representing the agency in the protest, including name, address (and Internet e-mail address, if any), and the telephone and fax numbers. You should notify all intervenors that this protest has been filed and to communicate directly with us in connection with the protest. Copies of the report must be furnished to the protester and all intervenors not later than the date indicated above. Please advise the protester of its obligation to submit comments or request a decision on the existing record within 10 days of its receipt of the agency report. Please also advise all parties of their right to submit comments on the report to GAO within 10 days of its receipt. You should refer to our file number and the GAO attorney assigned in all future correspondence regarding the protest. Any request for dismissal should be filed as soon as practicable after receipt of this notice if the agency seeks resolution of the request by our Office prior to the stated report due date. For your convenience, following is a list of the type of information to be included in your agency report: --the contracting officer's statement of the relevant facts;

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REVERSE AUCTIONS Guidance Is Needed to Maximize Competition and Achieve Cost Savings Statement of Michele Mackin, Director Acquisition and Sourcing Management

Testimony before the Subcommittee on Oversight and Investigations, Committee on Veterans’ Affairs and the Subcommittee on Contracting and Workforce, Committee on Small Business, House of Representatives

For Release on Delivery Expected at 10:00 a.m. EST Wednesday, December 11, 2013

GAO-14-200T

United States Government Accountability Office

Page 1 GAO-14-200T

Chairmen Coffman and Hanna, Ranking Members Kirkpatrick and Meng, and Members of the Subcommittees:

I am pleased to be here this morning to discuss the federal government’s use of reverse auctions. In recent years, federal agencies have been using this mechanism—in which sellers compete against each other in an online venue to sell their products or services—as a tool to reduce the price they pay for certain types of items. In theory, a reverse auction leverages competition, enabling agencies to obtain lower prices and reduce acquisition costs. We found that government agencies were increasingly using reverse auctions as a means to drive down prices but without adequate guidance to ensure that the potential benefits were maximized.

My remarks today are primarily based on our recently issued report on agencies’ use of reverse auctions. Accordingly, this testimony addresses (1) what agencies are buying through reverse auctions and trends in their use; (2) how agencies are conducting reverse auctions; and (3) the extent to which the potential benefits of reverse auctions are being maximized.1 My testimony today will summarize our findings from that report.

To conduct our work, we used fiscal year 2012 contract award information from Federal Business Opportunities (FedBizOpps.gov) to identify the Departments of the Army (Army), Homeland Security (DHS), the Interior (DOI), and Veterans Affairs VA) as the primary users of reverse auctions, representing approximately 70 percent of the activity. Because the agencies did not maintain the level of detailed information needed for our review, we obtained reverse auction data from FedBid, Inc., the company that conducted almost all of the government’s reverse auctions in fiscal year 2012, according to FedBizOpps.

In addition, we reviewed, where applicable, government-wide and agency policies and guidance regarding reverse auctions at these agencies; interviewed government acquisition officials and officials from the Office of Management and Budget’s Office of Federal Procurement Policy (OFPP); spoke with organizations representing government contractors; and reviewed a sample of contract files where a reverse auction was

1GAO, Reverse Auctions: Guidance Is Needed to Maximize Competition and Achieve Cost Savings, GAO-14-108 (Washington D.C.: Dec. 9, 2013).

http://www.gao.gov/products/GAO-14-108�

Page 2 GAO-14-200T

used. This work was performed in accordance with generally accepted government auditing standards. Our report provides further details on our scope and methodology.

Across the four agencies representing the bulk of reverse auction activity in fiscal year 2012, use of reverse auctions increased almost 175 percent between fiscal years 2008 and 2012. Figure 1 summarizes the growth in use of reverse auctions in dollars and number of auctions.

Figure 1: Number and Value of Reverse Auctions across the Selected Agencies from Fiscal Years 2008 to 2012

Of the $828 million in fiscal year 2012 contracting actions that resulted from reverse auctions at these agencies, $746 million—or 90 percent—was for products. Services, in contrast, constituted about 10 percent. Reverse auctions were used to purchase a variety of commercial products, primarily for information technology (IT) and medical equipment and supplies. While to date most reverse auctions have been used for commercial products, some agency officials told us that the use of

Reverse Auctions Have Increased and Have Been Used Primarily to Buy Commercial Products and Services

Page 3 GAO-14-200T

reverse auctions to acquire services is increasing and that they are also being used for more complex contracts.

Our analysis of the data also identified some common characteristics among contract awards resulting from reverse auctions. We found the following:

• About 95 percent of the reverse auctions resulted in awards of $150,000 or less.

• About 86 percent of the reverse auction awards—representing 80 percent of the dollars—went to small businesses. Figure 2 shows a breakdown of small business dollars among the four agencies.

Figure 2: Value of Small Business Awards Resulting from the Use of Reverse Auctions across the Selected Agencies, Fiscal Year 2012

• Further, almost 50 percent of the reverse auctions were conducted to place orders under existing contracts. In some cases, the use of these contract vehicles includes a fee that the ordering agency must pay.

• And we also found that almost 60 percent of reverse auction awards were in the last quarter of the fiscal year. Agency officials told us this

Page 4 GAO-14-200T

can occur due to the timing of when funds are released and that reverse auctions can facilitate the timely award of contracts late in the fiscal year.

All four agencies contracted with FedBid, a fee-based contractor, to conduct their reverse auctions during fiscal year 2012. Agency officials stated that contracting officers are required to follow established contracting procedures and rules. The contracting officer must also establish the basis for award. For example, the contracting officer can make the award to the lowest bidder or make the award based on a cost/technical trade-off process where it is in the best interest of the government to consider other than the lowest price. In fact, on the basis of our analysis of a random sample of auctions, we estimate that 24 percent of all reverse auction contracts awarded by the four agencies in fiscal year 2012 were not awarded to the lowest bidding vendor.2

Contracting officers can determine reverse auction features, such as the length of an auction, the amount of information available to bidders about each other’s bids, and whether to set a target price, which may be based on a government cost estimate or market research. If a target price is in effect, or “active,” a vendor must bid below that price and have submitted the lowest bid in order to be identified as the leading vendor. The leading vendor has the lowest price (below the target price) at any given time during an auction. However, a contracting officer can still award a contract even if no submitted bids meet the target price, that is, when no vendors were identified as the leading vendor. These strategies or features can affect the competitive environment of the auction and affect the magnitude of cost savings.

Vendors must register with FedBid and agree to the requirements established by the contracting officer before submitting a bid in an auction. Vendors can use FedBid’s system to submit questions about requirements during the auction, and the system notifies the contracting officer via e-mail. It is up to the contracting officer to decide whether to answer them. Several vendors stated that FedBid’s interface creates an additional layer between the vendor and the end user that can inhibit their efforts to clarify details in the solicitation—such as the type of material an agency requires—that are important in setting a bid price.

2This estimate has a 95 percent confidence interval that extends from 17 to 33 percent.

Agencies Use the Same Fee-Based Contractor and Are to Follow Established Contracting Procedures to Conduct Their Reverse Auctions

Page 5 GAO-14-200T

As part of our review, we gained an understanding of how reverse auction fees are paid. When a vendor submits a bid, FedBid automatically adds its fee and ranks the adjusted bid (i.e., the vendor’s bid plus the fee) against adjusted bids submitted by other vendors. When the reverse auction ends and the contracting officer receives the results, the bids, which already include FedBid’s fee, are ranked from lowest to highest. Then, when the agency receives the goods or services, it pays the entire bid amount to the selected vendor, including the fee. FedBid then sends an invoice to the selected vendor, who remits the fee to FedBid directly.

Agency officials and some vendors were confused about FedBid’s fees. What we found is that FedBid caps its fee at 3 percent of the winning vendor’s bid (though the fee is not to exceed $10,000), but the fee may be less depending on the specifics of FedBid’s contract with the agency. In addition, FedBid may reduce its fee or charge no fee in specific circumstances. In fact, we found that FedBid received no fees in 20 percent of fiscal year 2012 reverse auctions.

In July 2013, the General Services Administration (GSA) launched its own reverse auction tool to allow agencies to use reverse auctions with the GSA Schedule without using a separate contractor to conduct the auctions. GSA does not intend to charge a reverse auction fee for awards made to GSA Schedule holders, but agencies would still pay the 0.75 percent GSA Schedule fee. We did not conduct a detailed review of GSA’s reverse auction tool.

Competition and savings—two of the key benefits of reverse auctions cited by the agencies we reviewed—are not always being maximized. Both have been limited because not all reverse auctions involve what we refer to as interactive bidding, where vendors engage in multiple rounds of bids against each other to drive prices lower. We found that over a third of the fiscal year 2012 reverse auctions had no interactive bidding—and agencies paid $3.9 million in fees for these auctions. Figure 3 shows the percentage of FedBid’s fiscal year 2012 auctions for the agencies in our review that had interactive bidding among multiple vendors, versus those that did not, and the fees the agencies paid to FedBid.

Competition and Savings Are Not Always Maximized, in Part Due to Lack of Comprehensive Guidance

Page 6 GAO-14-200T

Figure 3: Fees Paid by Selected Agencies Based on Number of Vendors and Bids, Fiscal Year 2012

In addition, agencies cite savings as one of the benefits of reverse auctions. Although the agencies in our review stated that they do not publicly report the savings, they use the information—provided by FedBid—to assess the potential costs and benefits of reverse auctions. Using FedBid’s approach of calculating savings based on the delta between the agency’s target price and the winning bid, savings from fiscal year 2012 reverse auctions for the selected agencies totaled about $98 million.

However, it is unclear whether these savings are accurate. We found that

• the $98 million in estimated savings may be too high since it includes $24 million in savings from auctions without interactive bidding, which in theory would help drive prices lower, and

• 1,111 auctions that had interactive bidding resulted in an award price higher than the agency’s target price, which may indicate that the contracting officer set the target price too low.

Page 7 GAO-14-200T

We also found that agencies

• rely on FedBid to identify their reverse auction activity, • generally do not track how much they pay in reverse auction fees,3

and

• sometimes pay two sets of fees when using an existing contract vehicle in conjunction with a reverse auction. For example, 47 percent of acquisitions using reverse auctions were ordered under pre-existing contracts. Agencies paid $6.5 million in fees to FedBid in these cases in addition to paying a separate fee to use some of the existing contracts..

However, we found that VA in particular has taken steps to gain greater insight into its use of reverse auctions. In 2012, the agency’s senior procurement executive temporarily halted use of reverse auctions while an assessment was made of their effect on VA acquisitions. The reverse auctions were subsequently resumed, requiring collection of savings and fee calculations, which we found evidence of in the contract files we reviewed.

The Federal Acquisition Regulation (FAR) does not specifically address reverse auctions. Agencies have developed their own guidance, though most do not provide information on what to do in certain situations—for example, when only one vendor submits a bid. In our discussions with agency officials and vendors, we found they were uncertain about how reverse auction fees are paid and that confusion exists about how reverse auctions are managed. We believe that the lack of government-wide guidance addressing the use of reverse auctions and the confusion within the vendor community about the process may limit the potential benefits of reverse auctions.

3While agencies generally do not track the reverse auction fees they pay, pursuant to FedBid’s GSA Schedule contract, federal agency buyers utilizing FedBid’s reverse auction services reserve the right to pay the transactional fee directly to FedBid. We found that the VA in some instances asked FedBid for information regarding the fees paid on specific reverse auctions.

Page 8 GAO-14-200T

Given the clear trends showing that reverse auctions are on the rise and the lack of government-wide guidance on their use, we made several recommendations in our report. We recommended that the FAR be amended to address reverse auctions from a regulatory standpoint, and also recommended that the Office of Management and Budget (OMB) issue guidance addressing competition and fees and to share agency best practices.

OMB generally agreed with our recommendations.

Chairmen Coffman and Hanna, Ranking Members Kirkpatrick and Meng, and Members of the Subcommittees, this concludes my prepared statement. I would be pleased to respond to any questions that you may have at this time.

If you or your staff have any questions about this statement, please contact Michele Mackin at (202) 512-4841 or [email protected]. In addition, contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. Individuals who made key contributions to this testimony are Katherine Trimble, Assistant Director; Russ Reiter; Carl Barden; Virginia (Jenny) Chanley; Dayna Foster; Kristine Hassinger; Georgeann Higgins; Julia Kennon; Kenneth Patton; Roxanna Sun; Bob Swierczek; and Jocelyn Yin.

GAO Recommends that Office of Federal Procurement Policy Take Actions to Address the Use of Reverse Auctions

Contacts and Acknowledgments

(121185)


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TABLE of CONTENTS

Exhibit 10 MG Masiello Memo SB 20121213_SAT-Policy-Memo Page 2

Exhibit 10A AQCMemo_FAR19_11Jul13t ( MG Masiello ) Page 6

Exhibit 25 USD(ATL) Signed Memo to Workforce Page 7BBP 2 0 (13 Nov 12) wATTCHS (KENDALL)

Exhibit 26 USA003951-12_OSBP_D DPAP IncreasingOpport Page 15 for Sm Bus Memo ( GINMAN GRUDGER)

Exhibit 27 Executive Office of the President June 6, 2012 MEMO Page 17(JORDAN - MILLS)

MG Masiello Memo SB 20121213_SAT-Policy-Memo

2

LATVIAN CONNECTION LLC 1 EXHIBIT 10 MEMOS

ACQUJSmON, TECHNOLOGY AND LOGISTICS

OFFICE OF THE UNDER SECRETARY OF DEFENSE 3000 DEFENSE PENTAGON

WASHINGTON, DC 20301-3000

'J~ · 1 :vlL

MEMORANDUM FOR COMMANDER, UNITED STATES SPECIAL OPERATIONS COMMAND (ATTN: ACQUISITION EXECUTIVE)

COMMANDER, UNITED STATES TRANSPORTATION COMMAND (ATTN: ACQUISITION EXECUTIVE)

DEPUTY ASSISTANT SECRETARY OF THE ARMY (PROCUREMENT), DASA(P)

DEPUTY ASSISTANT SECRETARY OF THE NAVY (ACQUISITION & LOGISTICS MANAGEMENT), DASN(A&LM)

DEPUTY ASSISTANT SECRETARY OF THE AIR FORCE (CONTRACTING), SAF/AQC

DIRECTORS, DEFENSE AGENCIES DIRECTORS, DOD FIELD ACTIVITIES

SUBJECT: Increasing Opportunities for Small Businesses through Small Business Setasides under the Simplified Acquisition Threshold

Small businesses play a vital role in their contribution to the defense industrial base and the Department of Defense (DoD) is committed to increasing contracting opportunities for these entities. The purpose of this memorandum is to remind you of longstanding statutory requirements to set aside contracts for small businesses where the contract value is equal to or less than the simplified acquisition threshold (SAT) unless the "rule of two" is not met, and request that you redouble efforts to ensure these requirements are followed consistently. Set-aside requirements help to maximize small business contracting opportunities in the Federal marketplace. Greater management attention to the use of set-asides below the SAT can help the department meet our small business goals.

Section 15U) of the Small Business Act and the Federal Acquisition Regulation (FAR) at FAR 13 .003(b)(l), require contracting officers to set aside contracts above the $3,000 micro-purchase threshold and below the $150,000 SAT for small business, unless the contracting officer determines there is not a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in terms of market prices, quality and delivery. This is known as the "rule of two." FAR 19.502-2(a) requires the contracting officer to document the file if a set-aside is not used in connection with the award of a contract in this dollar range.

As a department, DoD has awarded 71% of contracts with dollar values equal to or less than the SAT to small business from 1 October 12 through 21 June 12, which accounted for 68% of total dollars eligible for small business. Also, only 47% of actions and 52% of the dollars awarded to small business resulted from small business set-asides.


3


I

This indicates that the "rule of two" is not used to the maximum extent practicable under SAT as required by statute.

To help DoD increase its contracting with small businesses, please take the following steps in conjunction with every new contract award that has an anticipated dollar value exceeding $3,000 but not exceeding the SAT:

• Automatically reserve the work for small business concerns and set aside the contract for small business, unless there is not a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in terms of market prices, quality, and delivery.

• If the work is not set aside for small business, document in the contract file the reason for acquiring the service or product on an unrestricted basis. Such documentation shall be completed using the DD 2579, which must be coordinated with the contracting activity small business specialist in accordance with Defense Federal Acquisition Regulation Supplement Subpart 219 .201(d)(10).

Please ensure appropriate internal controls are used to monitor compliance with the steps described above. For example, contracting activities may decide to sample contract files to review market research and other documents explaining why your respective component or agency purchased the product or service on an unrestricted basis.

Your commitment and efforts to ensure that DoD meets and hopefully exceeds its small business contracting goals are greatly appreciated.

The staff points of contact are Ms. Cassandra R. Freeman, 703-693-7062 or [email protected], for procurement policy; and Ms. Wendy Despres, 571-372-6310 or [email protected], for small business policy.

cc: Directors, DoD Office of Small Business

Programs

2

~/P--Andre J. Gudger, Director Office of Small Business Programs


4


Small Source – Right Value – Big Performance

SB Awards Under SAT (cont’d) Other Than SB Under the SAT

Source: FPDS-NG Small Business Achievement Report a/o 22 Oct 2012

Total potential benefit to SBs ~0.25% -- but IT’S THE LAW

$225.88 42.43%

$59.49 36.92%

$36.37 25.44%

$30.71 25.35%

$29.79 38.46%

$11.17 26.94%

$16.63 30.67%

$11.24 28.90%

$9.31 30.82%

$3.16 20.83%

$2.97 37.72%

$5.79 29.48%

$3.98 63.81%

$0.19 32.11%

$200.18 37.86%

$43.19 32.41%

$30.95 23.14%

$26.66 24.18%

$21.08 33.19%

$12.87 28.28

$10.48 24.97%

$9.39 28.91%

$6.50 25.39

$5.37 34.29%

$4.41 54.62%

$3.98 20.83%

$2.02 48.72%

$0.22 46.64%

$0

$50

$100

$150

$200

$250

OTS

B $

(Mill

ions

)

FY11 FY12

$ = Obligations under SAT going to OTSB % = Total obligations under SAT going OTSB


5


Exhibit 10A AQCMemo_FAR19_11Jul13t ( MG Masiello )

6


Exhibit 25 USD(ATL) Signed Memo to Workforce BBP 2 0 (13 Nov 12) wATTCHS (KENDALL)

7



8


BETTER BUYING POWER 2.0 INITIATIVES DESCRIPTIONS Achieve Affordable Programs • Mandate affordability as a requirement: The initiative to provide affordability caps for

unit production cost and sustainment costs was put in place two years ago and will continue. Affordability caps force prioritization of requirements, enabling cost trades and ensuring that programs which are currently too expensive in future budgets to be affordable from continuing.

• Institute a system of investment planning to derive affordability caps: This has been

implemented on a case-by-case basis as programs have entered the acquisition process. This initiative will make long-term capital investment analysis covering product lifecycles of 30 or 40 years a standard part of the acquisition process under DoDD 5000.02. Service and component resource managers and leadership will conduct portfolio analysis to limit future investment limitations on a capital investment portfolio of products, e.g., ground combat vehicles or surface combatants.

• Enforce affordability caps: After two years of imposing affordability caps, we are now at

the point where this initiative will have to be enforced if it is going to be successful at preventing spending on products that will be too expensive to be procured in meaningful quantities. This task falls to senior leadership, including the DAE, SAEs, and CAEs, who must work with the Service and Component leadership to halt programs that will not be within the established cap unless tradeoffs to reduce cost are implemented. Unless this is done, the Department will continue to spend billions on development and initial production of programs that are ultimately canceled or curtailed.

Control Costs Throughout the Product Lifecycle • Implement “should cost” based management: Should cost, the concept that our managers

should set cost targets below independent cost estimates and manage with the intent to achieve them, is well on its way to becoming part of the DoD culture. This effort is fundamental to cost control and deserves continued emphasis. Proactively controlling cost is everyone’s business. Savings will continue to be applied as close to their origin as Service and Department priorities allow. Successful should cost management should be recognized and rewarded by the chain of command and by personnel systems.

• Eliminate redundancy within Warfighter portfolios: Duplicate or redundant efforts occur

at the program level due to constraints in the component requirements process. The Department will identify synergies for existing and planned programs across the Services during MDD reviews, Program Budget Reviews (PB build), and across all levels of the buy.

• Institute a system to measure the cost performance of programs and institutions and to

assess the effectiveness of acquisition policies: The Department will become more data-driven in assessing its own and industry’s performance at achieving improved productivity. The Department will develop metrics for the programs and institutions (government and non-government) within the acquisition system and assess performance to better understand best practices in industry and government. The first set of data derived from this initiative will be published in early 2013.


9


• Build stronger partnerships with the requirements community to control costs: This is an area of continuing emphasis in which good progress has been made, but more needs to be done. More than anything else, requirements drive costs. The requirements and acquisition communities must cooperate more closely and continuously to ensure that requirements are technically achievable and affordable so that operational and Service leadership can make informed decisions about the costs associated with varying levels of performance. For Major Programs, the DAE is working closely with the VCJCS and the JROC, and each Service has taken steps in the right direction. However, more needs to be done to ensure well informed requirements decisions that balance cost and performance throughout product lifecycles.

• Increase the incorporation of defense exportability features in initial designs: Foreign

sales of and cooperation on US defense products provide a range of win-win benefits: reduced costs, improved US competitiveness, stronger ties to friends and allies, and improved interoperability. Rather than waiting until products are fully designed and in production for US use, we should assess and incorporate exportability design features and any needed anti-tamper features early in the acquisition process. This will reduce the cost of exportable versions of US systems and ensure that they are available for sale sooner, benefiting all concerned.

Incentivize Productivity & Innovation in Industry and Government • Align profitability more tightly with Department goals: The Department will reassess

how it provides incentives to industry so that they are as cost effective as possible at achieving the Department’s goals. The desire is to reward successful contractor performance that has high value to the Department and which might not be achieved without the motivation provided by the incentives. Both basic contract types and special incentive fee structures will be reassessed over the next few months to see if a better alignment can be accomplished.

Employ appropriate contract types: The original BBP emphasized the use of Fixed Price

Incentive (FPI) contracts. In BBP 2.0, we are refining our guidance to emphasize the use of the appropriate contract vehicle for the product or services being acquired. The DFAR and FAR provide for a range of contract types for a reason: one size does not fit all. This initiative will focus on improving the training of management and contracting personnel in the appropriate use of all contract types.

• Increase use of Fixed Price Incentive contracts in Low Rate Initial Production: One

phase of acquisition where FPI contracts are particularly appropriate is during the early stages of transition from development to production, low rate initial production (LRIP), particularly the earlier lots of LRIP. We will continue to emphasize the use of FPI during this phase.

• Better define value in “best value” competitions: In competitive bidding processes,

industry tends to default to threshold performance levels because they are less costly and source selections seldom give predictable credit for performance above threshold. In addition, when the Department buys non-developmental items (NDI) or near-NDI products, it often must select among products with varying levels of performance and with inherent cost differentials. The Department needs to improve its ability to define the value to the Department of performance that is above minimum levels so that it can make appropriate source selections and so that industry can bid intelligently. This will spur innovation by


10


providing a predictable basis by which companies can bid enhanced performance with the knowledge that any increased costs are within an acceptable range.

• When LPTA is used, define Technically Acceptable to ensure needed quality: Industry

has expressed concerns about the use of Lowest Price, Technically Acceptable (LPTA) selection criteria that essentially default to the lowest price bidder, independent of quality. Where LPTA is used, the Department needs to define TA appropriately to ensure adequate quality.

• Institute a superior supplier incentive program: This is an item from BBP 1.0 that has

not been implemented. The Navy is currently developing a pilot program for DoD, with the intent to recognize and reward contractors who demonstrate superior performance by focusing on cost, schedule, performance, quality, and responsiveness. The program will be initiated in the next few months.

• Increase effective use of Performance-Based Logistics: There is sufficient data on the

effectiveness of PBL at reducing cost and improving support performance to conclude that if it is effectively implemented and managed, PBL yields significant benefits. Key activities include increasing the knowledge base of PBL through standard processes, tools, and training

• Reduce backlog of DCAA Audits without compromising effectiveness: The Department

has a significant backlog in both closeout and pre-award audits. DCAA, with the assistance DCMA and DPAP, is increasing audit resources and developing a risk-based process for reducing the audit backlog. We expect to make major gains in reducing audit-associated delays in both contract closeouts and pre-award audits in 2013.

• Expand programs to leverage industry’s IR&D: This is an initiative that began under

BBP 1.0 and will continue under BBP 2.0. The overall effort requires continued leadership support to keep the momentum going and preserve the progress made over the past year.

Eliminate Unproductive Processes and Bureaucracy • Reduce frequency of OSD-level reviews: This continues the initiative to lower the

frequency of OSD-level program reviews to those necessary to support major investment decisions by the USD(AT&L), to respond to poor program performance, or to assess early indications of problems with execution.

• Re-emphasize AE, PEO, and PM responsibility and accountability: Over time the

Department has moved away from the clean lines of responsibility and accountability created under Goldwater Nichols. This initiative reinforces the roles of the acquisition chain of command, in the Services and in the Department.

• Eliminate requirements imposed on industry where costs outweigh benefits: This will

continue the initiative to identify non-value added processes that the Department may be imposing on industry. The intent is to work with industry to collect data that will enable the Department to identify requirements that can be reduced or eliminated to reduce cost without adversely affecting performance.

• Reduce cycle times while ensuring sound investment decisions: This initiative will assess

the root causes for long product cycle times, particularly long development cycles, with the


11


goal of significantly reducing the amount of time, and therefore cost, it takes to bring a product from concept to fielding. A full range of factors – oversight activities, funding stability, contracting lead time, requirements processes, technical complexity, use of risk reduction activities, and testing requirements – will be considered as possible contributing factors.

Promote Effective Competition • Emphasizing competition strategies and creating and maintaining competitive

environments: This initiative continues the effort to stress creating and maintaining a competitive environment that provides the motivation to control and reduce cost. The concept includes a full range of mechanisms that program managers should consider and incorporate in acquisition strategies and in activities conducted outside the program itself.

• Enforce open system architectures and effectively manage technical data rights: This

item is continued from BBP 1.0 and will focus on improving the Department’s early planning for open architectures and the successful execution of the plan to provide for open architectures and modular systems. This will include the development of a business model and associated intellectual property strategy (data rights planning) that can be implemented over the lifecycle of the product, starting while competition still exists.

• Increase small business roles and opportunities: Small businesses, as both prime

contractors to the Department and sub-contractors within the supply chain, are effective sources of innovation and reduced cost. The Department will continue its emphasis on improving small business opportunities.

• Use the Technology Development phase for true risk reduction: The data on a number of

programs has demonstrated that Technology Demonstration (TD) phase competitive prototyping is often not effective in reducing the risk associated with the products being developed in the program’s EMD phase. Proof of concept demonstrations that purport to provide Technology Readiness Level 6 maturity, but which do not have direct traceability to the proposed product design, are being used to win EMD programs instead of to reduce actual risk. This initiative will improve the Department’s ability to ensure that TD phase activities reduce the actual risk associated with the product to be developed.

Improve Tradecraft in Acquisition of Services The Department will continue and expand upon the initiatives already begun in this area. Contracting for Services is one of the areas which we believe has the greatest potential for cost reduction and improved efficiencies. • Assign senior managers for acquisition of services: This initiative was completed under

BBP 1.0; however, the Department will continue to emphasize the role of these senior managers in the Military Departments and the Components and assess their effectiveness in improving the acquisition of services.

• Adopt uniform services market segmentation: The Department has issued a directive

detailing implementation guidance to standardize service taxonomy into six categories. We will focus on the market segments with the greatest potential to reduce costs, and best practices will be identified and expanded in all of the categories.


12


• Improve requirements definition; prevent requirements creep: The Department will

continue this initiative. We have developed tools to assist users in writing Performance Work Statements, Quality Assurance Surveillance Plans, and Performance Requirements Summaries, and we will increase the training of cross-functional teams involved in formulating requirements for service contracts.

• Increase use of market research: This BBP 1.0 initiative requires additional work. We are

establishing a market research portal to enhance market research and facilitate small business opportunities.

• Increase small business participation: A number of steps in this area have been

implemented; however, we believe that the increased use of small businesses in service contracting can be a source of additional cost saving and we will continue to emphasize the participation of small businesses in this area.

• Strengthen contract management outside the normal acquisition chain – installations,

etc.: A significant amount of service contracting takes place outside of acquisition activities such as research and development or product support. For example, installations of all types contract for a range of services in various categories. More proactive management of these contracted activities is expected to yield additional savings.

• Expand use of requirements review boards and tripwires: This initiative will expand on

the use of specific best practices in service contract management that have been identified in some commands.

Improve the Professionalism of the Total Acquisition Workforce This new category emphasizes the most important single factor in the performance of the Defense Acquisition System: the capability of the professionals in our workforce, particularly the key leaders who implement the system and develop the people who will follow them. The total acquisition workforce includes program management, engineering, contracting, and product support disciplines engaged in a wide range of activities throughout the product lifecycle. • Establish higher standards for key leadership positions; establish stronger professional

qualification requirements for all acquisition specialties: Our key leaders must have the required qualifications, not just certification, for the positions they hold – this includes the appropriate amount of relevant experience, education, and training. Current qualification standards do not emphasize the hands-on experience necessary to become truly proficient enough to take on the responsibilities associated with being a key acquisition leader. The Department has many highly qualified acquisition leaders, but the bench is not deep enough and there is significant room for improvement. Pilot programs have been initiated to develop appropriate requirements for qualification for key leader positions.

• Increase the recognition of excellence in acquisition management: Managing a major

program or a multi-billion dollar logistics or other service contract is a high level of responsibility that demands special ability that should be recognized. While the Department does this to a point, this initiative recognizes the need to raise the recognition and prestige of the acquisition workforce at all levels within the Department.


13


• Continue to increase the cost consciousness of the acquisition workforce – change the culture: Under BBP 1.0 we made significant strides in this direction, but there is still work to be done and this area will require continuous attention. Perverse incentives to spend the budget, such as obligation rate criteria and leadership emphasis on getting on contract instead of getting the best business deal, need to be countered. There is good recognition in the Department that cost matters a great deal now that budgets have stopped growing, but this is an area in which we must continue to raise the consciousness of the workforce if we are to permanently change the Department’s culture.


14


Exhibit 26 USA003951-12_OSBP_D DPAP IncreasingOpport for Sm Bus Memo ( GINMAN GRUDGER)

15


Exhibit 26 USA003951-12_OSBP_D DPAP IncreasingOpport for Sm Bus Memo ( GINMAN GRUDGER)

16


EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET

W ASHINGTON, D.C. 20503

June 6, 2012

MEMORANDUM FOR DEPUTY SECRETARIES

CHIEF ACQUISITION OFFICERS

SENIOR PROCUREMENT EXECUTIVES

AGENCY SMALL BUSINESS DIRECTORS

FROM: Joseph G. Jordan Administrator for Federal Procurement Policy

Office of Management and Budget

Karen G. Mills

Administrator

Small Business Administration

SUBJECT: Follow-up: April 25, 2012 Meeting of the Small Business Procurement

Group

Thank you for your participation at the White House Small Business Procurement Group

meeting on April 25. During the meeting, each agency was asked to take the following three

immediate steps, under your leadership, to ensure small businesses are utilized to the maximum

extent practicable: (1) maximize opportunities for small businesses when making small dollar

awards, (2) increase opportunities for small businesses under multiple award contracts, and (3)

strengthen accountability for small business goal achievement. Additional information on each

of these steps is provided below. As we move forward, each agency should ensure program,

contracting, and small business policy staff understand their agency’s small business contracting goals and the tools available for meeting their goals.

Maximizing Opportunities for Small Businesses Under the Simplified Acquisition

Threshold

Pursuant to longstanding statutory requirements in the Small Business Act, agencies are

required to automatically set aside work for small businesses that is equal to or less than the

value of the simplified acquisition threshold (SAT) (generally $150,000) unless the contracting

officer determines the “rule of two” cannot be met – i.e., there is not a reasonable expectation of

obtaining offers from two or more responsible small business concerns that are competitive in

terms of market prices, quality, and delivery. However, a third-party analysis of data in the

Federal Procurement Data System suggests that a significant amount of work under the SAT is

not going to small businesses, including for products and services in industries where small

businesses are typically well represented. This suggests that opportunities for small businesses

are being lost, and that agencies must take additional steps to consistently apply set-asides in the

manner prescribed in law and regulation.

Exhibit 27 Executive Office of the President June 6, 2012 MEMO (JORDAN - MILLS)

17


2

Accordingly, we are asking that all agencies review their small business contracting

practices for purchases under the SAT and make adjustments where appropriate. At a minimum,

agencies should remind their contracting components of responsibilities to set aside contracts

whose value is equal to or less than the SAT unless the rule of two is not met, to properly

document the contract file when a set-aside is not used, and to maintain appropriate internal

controls that ensure consistent application of these requirements. A sample memorandum to

send to your agency’s acquisition workforce is included as Attachment 2 for your consideration.

In the near future, the Small Business Administration (SBA) will provide each agency

with an analysis of its contracts falling under the SAT that have not been awarded to small

businesses. SBA expects agencies to monitor their SAT performance and take appropriate

actions when missed opportunities to make contract awards to small businesses are identified.

We ask that all agencies report to OMB:

(1) steps taken to ensure internal controls are in place for the consistent application of small

business contracting requirements under the SAT,

(2) steps taken (or planned) to increase utilization of small businesses where awards under

the SAT are being made to other than small businesses, and

(3) if no steps have been taken, why no action has taken place.

Increasing Small Business Utilization on Multiple Award Contracts

In working together to enact section 1331 of the Small Business Jobs Act of 2010, Public

Law 111-240, both the Administration and Congress recognized that significant untapped

opportunities exist to increase small business participation on multiple award contracts.1 To

capitalize on these opportunities, section 1331 directed the Administrator for Federal

Procurement Policy and the Administrator of the Small Business Administration, in consultation

with the Administrator of General Services, to establish regulations under which Federal

agencies may, at their discretion, use partial contract set-asides, contract reserves, and order set-

asides under multiple award contracts.

As a first step, the Federal Acquisition Regulatory Council (FAR Council) issued an

interim rule on November 2, 2011 to provide guidance on the section 1331 authorities. A

number of agencies, including the Department of Homeland Security, have reported success

stories and best practices using the interim rule. Information on these successful applications of

section 1331 is available at https://max.omb.gov/community/x/EwFoIQ.

While use of the section 1331 tools is discretionary, the responsibility to give small

businesses maximum practicable opportunity is mandatory, and agencies will be held

accountable for taking all reasonable steps to meet their small business goals. This means that

1 Multiple award contracts are large “umbrella” contracts that are awarded to a number of companies who then compete for specific orders after the umbrella contracts have been awarded. Over the life of a typical multiple

award contract, which is often 5 years or more, hundreds of millions, if not billions, are spent through these types of

vehicles.


18


https://max.omb.gov/community/x/EwFoIQ

ADMIN

Typewritten Text

(note SAT - SIMPLIFIED ACQUISITION THRESHOLD)

ADMIN

Typewritten Text

ADMIN

Typewritten Text

ADMIN

Typewritten Text

3

each agency must determine how best to use the section 1331 tools with those tools previously

available to increase awards to small businesses and help the Federal government meet its

government-wide small business contracting goals each year. To help agencies measure their

progress, SBA will provide agencies with an analysis of their task and delivery order spending

(including spending under the SAT) that has not been awarded to small businesses.

To ensure the benefits of the FAR interim rule are being maximized, we ask that agencies

take the six steps listed in Attachment 1 and report to OMB:

(1) actions taken to accomplish the six steps,

(2) if action was not taken, why no action was taken, and

(3) when the agency reasonably expects to complete the six steps.

A sample memorandum to send to your agency’s acquisition workforce is included as

Attachment 3 for your consideration.

Strengthening Accountability for Small Business Goal Achievement

Achievement of Federal small business contracting goals depends greatly on effectively

communicating those goals throughout agencies and with clear lines of accountability. To that

end, we are asking each of you to hold senior leadership accountable for meeting your agency’s small business goals, including any of the statutory socio-economic goals (Small Disadvantaged

Business, HUBZone Small Business, Woman-Owned Small Business, and Service-Disabled

Veteran-Owned Small Business). We encourage you to include agency small business

contracting goals in the performance evaluations of all Senior Executive Service (SES) staff

members who oversee your agency’s acquisition workforce.

Agencies that have implemented performance evaluations containing small business

contracting goal elements report that senior level leadership accountability plays a critical role in

ensuring that those agencies meet or exceed their small business contracting and socio-economic

goals. To that end, we ask agencies to report to OMB on the steps they have taken to hold senior

leadership accountable for small business goals.

Agencies should submit their report covering the initiatives discussed above to Susan

Truslow of OMB’s Office of Federal Procurement Policy at [email protected] by July 9,

2012.

Attachments


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Attachment 1

Short Term Steps for Increasing Small Business Opportunities

Under Multiple Award Contracts

To help ensure the benefits of section 1331 of the Small Business Jobs Act of 2010 are being

maximized, agencies should take the six steps listed below.1

1. Issue a memorandum to the acquisition workforce reminding them of the interim FAR

rule on section 1331 and encouraging use of these tools. Consistent with expectations

announced by the FAR Council when the interim rule was published,2 the memorandum

should briefly review the various actions that can be taken under the interim rule and cite best

practices and success stories (which could include those of Department of Homeland

Security, if the agency does not yet have successes of its own to which it can point). We

recommend that the memorandum be sent from the Deputy Secretary, or equivalent official,

by June 15, 2012. A sample template is provided for your consideration in Attachment 3.

2. Consider requiring order set-asides under multiple award contracts if the agency is not

currently meeting its small business goals. Historically, set-asides have proven to be the

most powerful small business contracting tool. Accordingly, an increased commitment to

order set-asides is likely to be a highly effective means to help an agency improve its small

business contracting results and meet its small business goals. This can be achieved by

committing to use order set asides unless there is not a reasonable expectation of obtaining

offers from two or more responsible small business concerns that are competitive in terms of

market prices, quality, and delivery (i.e., unless the “rule of two” is not met).

Since the ultimate discretion of whether to apply a section 1331 tool rests with the

contracting agency, the agency will need to determine the most appropriate application of a

required set-aside. That is, the agency will have to decide whether to apply the tool to all of

the agency’s contracting activities, an identified set of contracting activities, or a discrete set

of acquisitions defined by industry or dollar threshold.3 The sample template includes

alternative language to address mandatory application of set-asides to the extent the agency

1 Any planned actions in response to this list should include a date for completion, which should be no later than

August 31, 2012.

2 When the interim rule was published, the FAR Council made clear that it expected agencies to take advantage of

set-asides under multiple-award contracts by (1) identifying existing or prospective multiple-award contracts with

small business contract holders where order set-asides may be appropriate, and (2) maximizing opportunities for

small business by utilizing order set-asides under the Multiple Awards Schedule or Federal Supply Schedule

Programs.

3Agencies are encouraged to use the “MaxPrac” tool of the Department of Defense, which helps agencies to analyze

their spend data and determine where small business capacity and opportunities are greatest. The Department of

Defense has updated the MaxPrac tool with FY 2011 data, which is available as a zip file for download at

http://www.acq.osd.mil/osbp/docs/CivilianAgencyMaxPracFY11-0312.zip. Questions regarding access and use of

the tool may be directed to Ms. Carol Brown [email protected] in the Office of Small Business Programs in

the Department of Defense.


20



2

deems appropriate. We recommend that any determination to require set-asides remain in

effect at least until the agency is meeting its small business goals.

3. Bilaterally modify existing multiple-award contracts to provide for order set-asides.

When the interim rule was published, the FAR Council encouraged agencies to modify, on a

bilateral basis, existing multiple-award contracts if the remaining period of performance

extends at least six months after the effective date, and the amount of work or number of

orders expected under the remaining performance period is substantial. The sample template

includes language regarding the bilateral modification of existing contracts.

4. Strengthen internal controls. Contract files should appropriately document how section

1331 tools were considered. If the agency is not currently meeting its various small business

contracting goals, contracting components should also consider sampling contract files to

review market research and other documents explaining how section 1331 tools were

considered and, if not used, why the agency purchased the product or service on an

unrestricted basis.

5. Review SBA’s proposed rule on section 1331. On May 16, 2012, SBA published in the

Federal Register a proposed rule providing more specific guidance to ensure that meaningful

consideration of set-asides and reserves is given in connection with the award of multiple

award contracts and task and delivery orders placed under them, and that those tools are used

in a consistent manner. 77 FR 29130. Agencies are strongly encouraged to review the rule

and provide directly to SBA’s Dean Koppel at [email protected] by July 16, 2012 any

suggestions for improving the rule. SBA is especially interested in changes that will make

the rule simpler, clearer, and more conducive to encouraging maximum use of the section

1331 tools by the agencies.

6. Ensure the workforce is trained. The General Services Administration has posted a set of

“frequently asked questions,” (FAQs), available at

http://www.gsa.gov/portal/content/113371, to explain how set-asides can be applied when

placing orders under Multiple Award Schedules contracts. Agencies are encouraged to

review the FAQs and also to take advantage of free training that GSA offers on order set-

asides. To access GSA’s webinar training, please visit interact.gsa.gov and Continuous

Learning Module (CLM), Basic Contracting for GSA Schedules (FAC023) at

icatalog.dau.mil. To sign up for additional training, agencies should contact Steve Sizemore

in GSA’s Federal Acquisition Service at [email protected].


21


http://www.gsa.gov/portal/content/113371


Attachment 2

Sample Memorandum to send to the Acquisition Workforce in your agency

DATE: May XX, 2012

FROM: [Name], Deputy Secretary (or equivalent)

[Name], Chief Acquisition Officer, Senior Procurement Executive

[Name], Director, Office of Small and Disadvantage Business Utilization

SUBJECT: Increasing opportunities for small businesses through small business set-asides

under the Simplified Acquisition Threshold

The purpose of this memorandum is to remind you of longstanding statutory

requirements to set aside contracts for small businesses where the contract value is equal to or

less than the simplified acquisition threshold (SAT) unless the “rule of two” is not met, and request that you redouble efforts to ensure these requirements are followed consistently. Set-

aside requirements help to maximize small business contracting opportunities in the Federal

marketplace. Greater management attention to the use of set-asides below the SAT can help our

agency meet and exceed its small business contracting requirements each year.

Under section 15(j) of the Small Business Act and the Federal Acquisition Regulation,

contracting officers are required to set aside contracts above the micro-purchase threshold1 and

below the SAT2 for small business unless the contracting officer determines there is not a

reasonable expectation of obtaining offers from two or more responsible small business concerns

1 Under the FAR, “micro-purchase” means an acquisition of supplies or services using simplified acquisition

procedures, the aggregate amount of which does not exceed the micro-purchase threshold.

“Micro-purchase threshold” means $3,000, except it means—

(1) For acquisitions of construction subject to the Davis-Bacon Act, $2,000;

(2) For acquisitions of services subject to the Service Contract Act, $2,500; and

(3) For acquisitions of supplies or services that, as determined by the head of the agency, are to be used to

support a contingency operation or to facilitate defense against or recovery from nuclear, biological, chemical, or

radiological attack, as described in [FAR] 13.201(g)(1), except for construction subject to the Davis-Bacon Act

(41 U.S.C. 1903)—

(i) $15,000 in the case of any contract to be awarded and performed, or purchase to be made, inside the

United States; and

(ii) $30,000 in the case of any contract to be awarded and performed, or purchase to be made, outside the

United States.

2 Under the FAR, “simplified acquisition threshold” means $150,000, except for acquisitions of supplies or

services that, as determined by the head of the agency, are to be used to support a contingency operation or to

facilitate defense against or recovery from nuclear, biological, chemical, or radiological attack (41 U.S.C. 1903), the

term means—

(1) $300,000 for any contract to be awarded and performed, or purchase to be made, inside the United States;

and

(2) $1 million for any contract to be awarded and performed, or purchase to be made, outside the United

States.


22


https://www.acquisition.gov/far/current/html/Subpart%2013_2.html#wp1088782

http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t41t42+2+13++%2841%29%20%20AND%20%28%2841%29%20ADJ%20USC%29%3ACITE%20%20%20%20%20%20%20%20%20

http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t41t42+2+13++%2841%29%20%20AND%20%28%2841%29%20ADJ%20USC%29%3ACITE%20%20%20%20%20%20%20%20%20

2

that are competitive in terms of market prices, quality and delivery. FAR 19.502-2(a) requires

the contracting officer to document the file if a set-aside is not used in connection with the award

of a contract in this dollar range.

Further, [AGENCY] has awarded [##% - SBA will soon provide agencies with a SAT

performance analysis] of contracts with dollar values equal to or less than the SAT to small

businesses, falling short of our statutory requirement of awarding 100% of contracts below the

SAT to small businesses when the rule of two is met.

To help the agency increase its contracting with small businesses, please take the

following steps in conjunction with every new contract award that has an anticipated dollar value

exceeding $3,000 but not exceeding the SAT:

• Automatically reserve the work for small business concerns and set aside the contract for

small business, unless there is not a reasonable expectation of obtaining offers from two or

more responsible small business concerns that are competitive in terms of market prices,

quality, and delivery.

• If the work is not set aside for small business, document in the contract file the reason for

acquiring the service or product on an unrestricted basis.

Please ensure appropriate internal controls are used to monitor compliance with the steps

described above. For example, contracting activities may decide to sample contract files to

review market research and other documents explaining why the agency purchased the product

or service on an unrestricted basis.

Thank you for your commitment to meeting and exceeding [AGENCY’S] small business

contracting goals. We appreciate all of your efforts in utilizing small businesses to meet our

requirements.

cc: Agency Chief Acquisition Officer

Agency Senior Procurement Executive

Agency Small Business Director


23


Attachment 3

Sample Memorandum to send to the Acquisition Workforce in your agency

DATE: May XX, 2012

FROM: [Name], Deputy Secretary (or equivalent)

[Name], Chief Acquisition Officer, Senior Procurement Executive

[Name], Director, Office of Small and Disadvantage Business Utilization

SUBJECT: Maximizing Small Business Utilization on Multiple Award Contracts

The purpose of this Memorandum is to remind you of provisions in the Federal

Acquisition Regulation (FAR) that became effective November 2, 2011, providing for the use of

order set-asides in connection with multiple award contracts. In working together to enact

section 1331 of the Small Business Jobs Act, both the Administration and Congress recognized

that untapped opportunities exist to increase small business participation on multiple award

contracts. They further recognized that set-asides historically have proven to be the most

powerful small business contracting tool. For these reasons, you are asked to give increased

attention to set-asides when placing orders under multiple award contracts.

Section 1331 of the Jobs Act directed the Administrator for Federal Procurement Policy

and the Administrator of the Small Business Administration (SBA), in consultation with the

Administrator of General Services, to establish regulations under which Federal agencies may, at

their discretion: (1) set aside part or parts of a multiple award contract for small business, (2)

reserve one or more awards on multiple award contracts that are established through full and

open competition for small business, and (3) set aside orders under multiple award contracts for

small businesses.

On November 2, 2011, an interim FAR rule was published to provide agencies with

initial guidance for taking advantage of the section 1331 authorities. With respect to order set-

asides, in particular, the interim rule:

• makes clear that set-asides may be used in connection with the placement of orders under

multiple award contracts, notwithstanding the otherwise applicable requirement to provide

each contract holder a fair opportunity to be considered;

• makes clear that set-asides may be utilized under any of the various small business programs

(i.e. Small Business, Small Disadvantaged Business, HUBZone Small Business, Woman-

Owned Small Business, and Service-Disabled Veteran-Owned Small Business);

• further makes clear that order set-asides may be used in connection with the placement of

orders and blanket purchase agreements under Multiple Award Schedule (MAS) contracts;

and


24


2

• amends existing solicitation provisions and contract clauses to provide notice of set-asides.

To ensure the benefits of order set-asides are being maximized, contracting activities

should take the following immediate steps:

(1) Identify prospective multiple-award contracts with small business contract holders where

order set-asides may be appropriate and either preserve the option to set aside individual

orders or commit to using order set-asides unless there is not a reasonable expectation of

obtaining offers from two or more responsible small business concerns that are

competitive in terms of market prices, quality, and delivery (i.e., unless the “rule of two” is not met at the order level).

(2) Identify existing multiple-award contracts with small business contract holders where

order set-asides may be appropriate and either preserve the option to set-aside orders or

commit to using order set-asides. This may require bilateral modifications, which should

be considered if the remaining period of performance extends at least six months after the

effective date, and the amount of work or number of orders expected under the remaining

performance period is substantial.

(3) Consider order set-asides under MAS contracts. The General Services Administration

has posted a set of “frequently asked questions” (FAQs), available at http://www.gsa.gov/portal/content/113371, to explain how set-asides may be applied

when placing orders under MAS contracts. Agencies are encouraged to review the FAQs

and also to take advantage of free training that GSA offers on order set-asides. To sign

up for training, agencies should contact Steve Sizemore in GSA’s Federal Acquisition Service at [email protected].

(4) Review success stories in connection with the use of the interim FAR rule, available at

https://max.omb.gov/community/x/EwFoIQ, and document examples of successes as you

identify them.

(5) Ensure that contract files appropriately documents how section 1331 tools were

considered.

[If the agency is not currently meeting all of its small business goals, consider the following

alternative language for the steps listed above:

[AGENCY] is not currently meeting one or more of its small business goals. To ensure

the benefits of order set-asides are being maximized, contracting activities should take the

following immediate steps:

(1) Identify prospective multiple-award contracts with small business contract holders where

order set-asides may be appropriate and commit to using order set asides unless a

determination is made prior to placing the order that there is not a reasonable expectation

of obtaining offers from two or more responsible small business concerns that are

competitive in terms of market prices, quality and delivery (i.e., the “rule of two” is not


25




3

met at the order level). This commitment should be applied to the following new

multiple award contracts: [Agency should identify the appropriate scope of the

commitment: all prospective multiple award contracts / multiple award contracts

awarded by the following components (identify) / multiple award contracts that are

predominantly for the following products or services (identify) / all orders within the

following dollar range (identify)]. For all other new multiple award contracts, either

preserve the right to use set-asides or commit to using set asides.

(2) Identify existing multiple-award contracts (with the scope identified in item (1), above)

with small business contract holders where order set-asides may be appropriate and

commit to using order set-asides. This may require bilateral modifications, which should

be considered if the remaining period of performance extends at least six months after the

effective date, and the amount of work or number of orders expected under the remaining

performance period is substantial.

(3) Commit to order set-asides under MAS contracts for orders falling within the scope

identified in item (1). GSA has posted a set of “frequently asked questions” (FAQs), available at http://www.gsa.gov/portal/content/113371, to explain how set-asides may be

applied when placing orders under MAS contracts. Agencies are encouraged to review

the FAQs and also to take advantage of free training that GSA offers on order set-asides.

To sign up for training, agencies should contact Steve Sizemore in GSA’s Federal Acquisition Service at [email protected].]

(4) Review success stories in connection with the use of the interim FAR rule, available at

https://max.omb.gov/community/x/EwFoIQ, and document examples of successes as you

identify them.

(5) Ensure that contract files appropriately documents how section 1331 tools were

considered.

(6) Sample contract files to review market research and other documents explaining how

order set-asides were considered and, if not used, why the agency purchased the product

or service on an unrestricted basis.]

On May 16, 2012, SBA published in the Federal Register a proposed rule providing more

specific guidance addressing all three components of section 1331, namely (1) partial contract

set-asides, (2) contract reserves, and (3) order set-asides. The purpose of SBA’s rulemaking is to ensure both that meaningful consideration of set-asides and reserves is given in connection with

the award and placement of task and delivery orders under multiple award contracts and that

those tools are used in a consistent manner. You are urged to review the rule and provide

feedback to [insert agency POC] by [insert date that will allow the agency to submit

consolidated feedback directly to SBA by July 9, 2012]. You should focus on changes that

will make the rule simpler, clearer, and more conducive to encouraging maximum use of the

tools by the agency.


26


http://www.gsa.gov/portal/content/113371



4

Contracting activities should report on actions taken or planned in response to this

memorandum to [insert POC] by [insert date that will allow agency to report back to OMB

by July 9, 2012]. Thank you for your attention to this important matter and for your ongoing

commitment to help our agency meet and exceed its small business contracting goals.

cc: Agency Chief Acquisition Officer

Agency Senior Procurement Executive

Agency Small Business Director


27


7/24/2014 Board of Directors | FedBid

http://www.fedbid.com/about/directors/ 1/4

FedBid’s mission, vision and growth is fueled by innovative, passionate and proven business

and thought leaders.

Ali Saadat

Ted Leonsis

Susan L. Bostrom

General George W. Casey Jr.

Kim D. Cooke

Scott Hilleboe

Lance L. Weaver

Ali Saadat

Board Chair, Founder, Chief Executive Officer

A lifelong entrepreneur with a passion for using disruptive technology, service and

business model innovations to improve business and market value, Mr. Saadat propels

FedBid forward with over 35 successful years in leading and building information

technology and Internet industry companies. As FedBid’s CEO, he uses his vision,

oversight and leadership to guide the development and implementation of FedBid’s

overall business strategy. Under his leadership over the past decade, FedBid has grown

to a global community of Sellers actively competing for the business of federal and

Fortune 500 Buyers, with $billions worth of goods and services awarded annually. In

January 2012, Mr. Saadat led the company in securing a significant investment from

Revolution Growth, a venture capital fund created by Steve Case, Ted Leonsis and

Donn Davis. Mr. Saadat is also passionate about philanthropy. Working with nonprofit

agencies to help them more effectively give children and families the support they need

to succeed has been the cornerstone of a wide variety of philanthropic efforts throughout

his life. Saadat earned a Master of Science degree in Industrial Engineering from George

Washington University. A dedicated husband, father and grandfather, Mr. Saadat firmly

believes in making time for all that leads to a happy, healthy and worthwhile life.

Ted Leonsis

Board Vice Chairman

Ted Leonsis, a partner in the Revolution Growth fund, is a nationally renowned

entrepreneur, investor and business-builder. Mr. Leonsis has been involved with

Revolution Growth since its founding, as an investor in and chairman of Revolution

Money and Clearspring. He is the founder, chairman and majority owner of Monumental

Sports & Entertainment, which owns the Washington Capitals (NHL), the Washington

Wizards (NBA), the Washington Mystics and the Verizon Center and he sits on the

board of directors of several leading companies ranging from American Express to

Groupon. Mr. Leonsis retired from active management of AOL in 2006, where during the

Leadership

Executive Leaders

Senior Leaders

Board of Directors

Key Advisors & Consultants

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Board of Directors

http://www.revolution.com/

http://www.fedbid.com/about/executive-leaders/

http://www.fedbid.com/about/senior-leadership/

http://www.fedbid.com/about/directors/

http://www.fedbid.com/about/advisors/

https://marketplace.fedbid.com/login.do

https://marketplace.fedbid.com/registration.do

http://www.fedbid.com/contact/


http://www.fedbid.com/buyers/

http://www.fedbid.com/sellers/

http://www.fedbid.com/marketplace/

http://www.fedbid.com/about/

http://www.fedbid.com/resources/




previous 13 years he was an inspirational leader and held a number of senior positions,

including vice chairman and president and worked closely with Steve Case for a decade

to build AOL into the world’s leading internet company with a market value at its peak in

excess of $100 billion. He also founded SnagFilms, the Internet’s leading site for online

audiences to find, watch and share documentary films. Early in his career Mr. Leonsis

founded several technology-enabled consumer companies, including Redgate

Communications, where he is credited for coining the phrase “new media”. He has been

named Washington’s Businessman of the Year, a Washingtonian of the Year, one of the

20 most influential people in sports and one of the top 10 entrepreneurs of the year. He

blogs daily at TedsTake.com.

Susan L. Bostrom

Board Member

Susan Bostrom is a top marketing expert and accomplished thought leader, bringing

more than 25 years of multifaceted marketing and business leadership experience to

FedBid’s board, including that from her recent position as executive vice president

(EVP) and chief marketing officer (CMO) of Cisco Systems, Inc where she led Cisco’s

strategy and implementation of all branding, advertising, digital and product marketing

efforts. During her 13 years with Cisco, Bostrom gained widespread acclaim and

respect for creating and evolving the company’s impactful and effective, "Welcome to

the Human Network" campaign. She was also responsible for Cisco’s Worldwide

Government Affairs organization and Small Business Council. Earlier in her Cisco

career, Bostrom was recognized for building the Internet Business Solutions Group

(IBSG), a proprietary consulting organization that advised Fortune 500 CEOs and global

government leaders on the use and business value of Internet applications. Prior Cisco,

Bostrom held leadership positions with FTP Software, National Semiconductor and

McKinsey & Company. Bostrom currently serves on the board of directors for Varian

Medical Systems, Cadence Design Systems and Marketo, Inc. Her nonprofit board

service includes Stanford Hospital and Clinics and Georgetown University. She also

serves on the advisory board of the Stanford Institute for Economic Policy Research

(SIEPR) and the Stanford Graduate School of Business Advisory Council. Bostrom

holds an MBA degree from the Stanford Graduate School of Business and BS degree in

marketing from the University of Illinois.

General George W. Casey Jr.

Board Member

General George W. Casey Jr. is one of the most accomplished soldiers in U.S. history

and an authority on strategic leadership. General Casey is currently a member of the

board of trustees of Ride2Recovery, an organization that uses cycling as a means of

assisting the recovery of our wounded servicemen and women; a member of the board

of directors of Thanks U.S.A, a organization that provides scholarships to the children

and spouses of our servicemen and women; and he is the chairman of the military

advisory board of Viridis Learning, an educational software company that is working to

increase employment opportunities for our veterans. He is also a member of the board

of governors of Colt Defense, a leading designer, developer and manufacturer of small

arms and weapons systems. As the 36th Chief of Staff of the U.S. Army from April 2007

to 2011, General Casey is widely credited with restoring balance to the war-weary U.S.

Army, transforming and modernizing its operations and capabilities. Prior to this, from

July 2004 to February 2007, he commanded the Multi-National Force – Iraq, a coalition of

more than 30 countries. On the home front, General Casey has been a stalwart

advocate for military families, expanding programs for the wounded, addressing the

http://www.tedstake.com/



tough issues of substance abuse and suicide, reducing the stigma of combat stress

and trauma and providing long term support for survivors of the fallen. The son of

George William Casey, the decorated Major General who commanded the 1st Cavalry

Division during the Vietnam War and himself a father of a son who served, General

George W. Casey Jr. has enjoyed a long career of exemplary service as an American

soldier. He was commissioned a second lieutenant of Infantry from Georgetown

University School of Foreign Service in 1970. Throughout his career, he served in

operational assignments in Germany, Italy, Egypt, Bosnia, Iraq and the United States. He

has extensive command experience. General Casey holds a Master’s degree in

International Relations from Denver University and has served as a Senior Fellow at the

Atlantic Council of the United States.

Kim D. Cooke

Board Member

Kim D. Cooke is a game-changing business beacon, financial strategist, investor and

legal advisor. He founded Blue Water Capital, L.L.C., a private venture capital firm, in

1995 and today serves as its chairman and managing director. Blue Water Capital

raised and managed close to $100 million in capital for investment in the technology

sector. Mr. Cooke has served as a member of the board of directors of EasyLink

Services, Intl., since December 2000 and was appointed the company’s lead director in

November 2003 and as chairman of the board in September 2005. Trained as a

transactional lawyer, he has extensive business and legal experience working with

credit, financial services and technology companies in the United States, AMEA and

Latin America. Mr. Cooke has served on numerous corporate boards in his capacity at

Blue Water Capital. In addition to serving on FedBid’s board, he serves on the boards for

EasyLink Services, Intl., Company.com, Access Point Communications, Inc., Renaps

Technology, Inc. and Keel Point, LLC. His not for profit activities include service on the

board of Family Life, The Northville Educational Foundation, as president of the Northville

High School Men’s Lacrosse and Living Hope International. Mr. Cooke received his JD

from the Detroit College of Law at Michigan State University and his LLM from the

American University Washington College of Law, with highest honors.

Scott Hilleboe

Board Member

Scott Hilleboe is a member of the investment team at Revolution Growth, which invests

in game-changing consumer technology businesses that disrupt multibillion dollar

industries. Mr. Hilleboe brings over 15 years of experience in operations, venture capital

investing and business development in the media, consumer, software and enabling

technology sectors to his role as a key advisor in building FedBid’s momentum. Prior to

joining Revolution Growth, Mr. Hilleboe was a managing director with Steamboat

Ventures, where led an impressive stream of investments including Fastclick (IPO and

then acquired by ValueClick), Greystripe (acquired by ValueClick), Kyte (acquired by KIT

Digital), MerchantCircle (acquired by Reply.com), MediaBank (merged to become

MediaOcean), Move Networks (acquired by EchoStar), PopularMedia (acquired by

StrongMail) and Quigo (acquired by AOL). These successes were built on earlier ones

gained as an investment professional with Hummer Winblad Venture Partners, where

he co-lead investments in Jareva Technologies (acquired by Symantec), Yosemite

Technologies (acquired by Barracuda Networks), Cenzicand Voltage

Security. Previously, Mr. Hilleboe worked at industry leading enterprises IBM, LaSalle

Partners and Synopsys, as well as a number of early stage technology companies. Mr.

Hilleboe currently serves on the board of directors of EdgeCast Networks and Elemental



Technologies. He holds an MBA from Harvard Business School and a BS in Mechanical

Engineering, from the University of Washington, where he graduated Phi Beta Kappa

and magna cum laude.

Lance L. Weaver

Board Member

Lance Weaver retired from Bank of America at the end of 2008 after eighteen years with

the Bank and part of the team that took MBNA public. Mr. Weaver served as an

Executive Vice Chairman and Chief Administrative Officer of MBNA. He had oversight

responsibilities for corporate affairs, law, government relations, real estate, facility

management, personnel, security, compensation and benefits, career development,

investor relations, media relations and planning. He was President of the MBNA

Education Foundation and managed all the bank’s community relations activities.

During his time with Bank of America, Mr. Weaver had responsibility for the bank’s

international credit card business and North American credit card business. He currently

serves as President of Virgin Money Cards and as an advisor to leading companies

such as VISA, Citigroup, TSYS, Magnises Card, West Monroe Partners, Allied

Properties, Broad Valley Broadband and Apollo Capital where he is a Board Member of

Avant Card—Apollo’s European credit card business. Before becoming part of Bank of

America's management team, he held positions in the banking industry at both Wells

Fargo Bank and Citigroup. Because of his extensive background in the world of

banking, Mr. Weaver was asked to teach a course in Business Ethics in the Honor’s

Program at the University of Delaware.

A graduate of Georgetown University, Mr. Weaver is a past member of the Georgetown

University Board of Directors and Board of Trustees and past Board Chair of

MasterCard.

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7/24/2014 Opportunities - Federal Business Opportunities: Opportunities

https://www.fbo.gov/index?s=opportunity&mode=list 1/2

Buyers: Login | Register Vendors: Login | Register Accessibil ity

OpportunitiesRETURN TO OPPORTUNITIES

Search Tip: Use the Advanced Search Form for a w ide array of search f ields. To view opportunities by agency, go to the Agencies section. A quick

search can be conducted using the f ields below .

Opportunity Agency/Office/Location Type / Set-aside Posted On

41--WASHABLE AIR FILTERS

RFQP0315NP140133A41 -- Refrigeration, air-conditioning & aircirculating equipment

Department of Justice

Bureau of Prisons

Acquisitions Branch

Aw ard / Total Small Business Jul 24, 2014

39--Forklifts

W911SG-14-T-931339 -- Materials handling equipment

Department of the Army

FedBid

FedBid.com -- for Department of Army

procurements only

Presolicitation Jul 24, 2014

T--Clear One Device Installation

W911SD-14-T-0213T -- Photographic, mapping, printing, &publication services


FedBid


procurements only


66--Quality Calibration System

14-OSHA-CHI-CHI-008866 -- Instruments & laboratory equipment

Department of Labor

Office of the Assistant Secretary for

Administration and Management

Office of Procurement Services


66--OSHA CTC Pump Kits

14-OSHA-CHI-CHI-006166 -- Instruments & laboratory equipment

Department of Labor

Office of the Assistant Secretary for

Administration and Management

Office of Procurement Services

Aw ard Jul 24, 2014

S--Janitorial Services for

Christiansted NHS and Salt River NHP

S40164688S -- Utilities and housekeeping services

Department of the Interior

National Park Service

NPS - All Off ices

Combined Synopsis/Solicitation / Total

Small BusinessJul 24, 2014

V--Life Cycle Training 20-24 August

King of Prussia, PA

W91247-14-T-CL25V -- Transportation, travel, & relocationservices


FedBid


procurements only

Combined Synopsis/Solicitation Jul 24, 2014

W--OPTION - WASHER AND DRYER

LEASE

N68836-14-T-0219W -- Lease or Rental of equipment

Department of the Navy

Naval Supply Systems Command

NAVSUP Fleet Logistics Center

Jacksonville



66--Neutron Generators (D-D and D-T) Department of the NavyCombined Synopsis/Solicitation

Opportunities List Advanced Search Archives

Keyw ord / Solicitation #: fedbid TIPS Posted Date: Last 30 Days Search Clear

Search by Agency, Set-aside, State, and Type Search by Classif ication, NAICS code, Recovery actions, and more

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7/24/2014 Opportunities - Federal Business Opportunities: Opportunities

https://www.fbo.gov/index?s=opportunity&mode=list 2/2

For Help: Federal Service Desk Accessibility

N65540-14-T-510566 -- Instruments & laboratory equipment

Naval Sea Systems Command

NSWC Carderock DET Philadelphia

(Modif ied) Jul 24, 2014

D--Install Underground

Communications cable

RFQPR0010492656-07D -- Information technology services,including telecommunications services


FedBid


procurements only


(Modif ied)Jul 24, 2014

D--Install Underground

Communications cable

RFQPR0010492656-08D -- Information technology services,including telecommunications services


FedBid


procurements only

Combined Synopsis/Solicitation Jul 24, 2014

70--Toners/Printers

RFQ062014001970 -- General purpose informationtechnology equipment


Bureau of Prisons

Acquisitions Branch

Presolicitation (Modif ied) / Total Small

BusinessJul 24, 2014

70--Toners/Printers

RFQ0620140019-0170 -- General purpose informationtechnology equipment


Bureau of Prisons

Acquisitions Branch



70--OPTION - McAfee

hardware/software support

W91RUS-14-T-015770 -- General purpose informationtechnology equipment


FedBid


procurements only


(Modif ied)Jul 24, 2014

58--Video System (Integraged in Rear-

View Mirror)

S4015902058 -- Communication, detection, & coherentradiation equipment


National Park Service

NPS - All Off ices


70--UPS Repair Maintenance

W91RUS-14-T-024370 -- General purpose informationtechnology equipment


FedBid


procurements only


(Modif ied) / Total Small BusinessJul 24, 2014

76--Textbooks

004015658076 -- Books, maps & other publications


Bureau of Indian Affairs

BIA - DAPM


(Modif ied) / Total Small BusinessJul 24, 2014

37--Commercial Zero-Turn Mower

Purchase - Golconda Job Corps

AG-05K3-S-14-003937 -- Agricultural machinery & equipment

Department of Agriculture

Forest Service

R-6 Northw est Contracting Area, Mt.

Baker-Snoqualmie NF


54--Custom, Free-Standing Portable

Loading Dock

MF-0012-3P54 -- Prefabricated structures andscaffolding


FedBid


procurements only



J--N4446614RC233KC REFURBISHMENT

OF PURE WATER TRAILER

N6883614T0226J -- Maintenance, repair & rebuilding ofequipment

Department of the Navy

Naval Supply Systems Command

NAVSUP Fleet Logistics Center

Jacksonville



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