Decision Released: Protest denial of SEC OCDO sole source and bridge contract for enterprise data management services

DIGEST

1. Protest that the agency unreasonably divided its requirement to make a sole-source award for an interim or “bridge” contract in violation of 13 C.F.R. § 124.506(a)(5) is denied because the regulation does not apply to the award of bridge contracts. 2.  Protest that the Small Business Administration unreasonably accepted a requirement into the 8(a) program without conducting an equitable distribution analysis under 13 C.F.R. § 124.503(g)(1)(iii) is denied where the record shows that the agency followed its regulations.

DISCUSSION

As noted, Anika raises multiple challenges arguing that the SEC unreasonably awarded the bridge contract.  Principally, Anika argues that the SEC’s decision to award the bridge contract to Peregrine on a sole-source basis was improper and that, instead, the agency must conduct the procurement as a competition among eligible 8(a) program participants.  In this regard, Anika contends that the award violates the SBA’s regulations, specifically 13 C.F.R. § 124.506(a).  See also FAR 19.805-1(c).  Alternatively, Anika argues that the SBA unreasonably accepted the bridge contract without considering how the award would affect the equitable distribution of federal contracts.  Comments and Supp. Protest at 4.    Section 8(a) of the Small Business Act authorizes the SBA to contract with other government agencies and to arrange for the performance of those contracts through subcontracts awarded to socially and economically disadvantaged small businesses.  15 U.S.C. § 637(a).  The Act affords the SBA and contracting agencies broad discretion in selecting procurements for the section 8(a) program; our Office will review 8(a) actions to determine whether government officials have violated applicable regulations or engaged in bad faith We have reviewed all Anika’s challenges and conclude that none provide us with a basis to sustain the protest.  We discuss the principal allegations in turn.   Alleged Violation of 13 C.F.R. § 124.506(a)  Anika argues that the agency violated 13 C.F.R. § 124.506(a) by failing to compete the bridge contract among eligible 8(a) firms.  Protest at 7.    By way of background, this regulation establishes a competitive threshold amount of $4.5 million, above which any contract action not assigned a North American Industry Classification System (NAICS) manufacturing code must be competed among eligible firms.6  13 C.F.R. § 124.506(a)(2)(ii).  Further, this regulation provides, in relevant part, the following:  A proposed 8(a) requirement with an estimated value exceeding the applicable competitive threshold amount may not be divided into several separate procurement actions for lesser amounts in order to use 8(a) sole source procedures to award to a single contractor.  13 C.F.R. § 124.506(a)(5).  Thus, an agency may not divide a requirement for non-manufacturing services exceeding $4.5 million into smaller procurement actions below the threshold in order to make direct awards…

DECISION

Anika Systems, Inc., of Leesburg, Virginia, protests the Securities and Exchange Commission’s (SEC) decision to award a contract to Peregrine Advisors Benefit, Inc., of Potomac, Maryland, on a sole-source basis through the Small Business Administration’s (SBA) 8(a) Business Development (BD) Program.  Anika argues that the SEC unreasonably awarded the contract without competition, and that the SBA improperly accepted the contract.  We deny the protest.

See the decision here.

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