The Competition in Contracting Act (CICA) requires full and open competition in federal procurement unless one of the limited exceptions enumerated in the Federal Acquisition Regulation (FAR) part 6 applies. Meanwhile, the General Services Administration (GSA) Federal Supply Schedule (FSS) program provides the government with a streamlined process for acquiring commonly used commercial supplies and services. These simplified procedures notwithstanding, CICA’s competition mandate applies to procurements conducted under the FSS program. In this regard, the Government Accountability Office (GAO) has previously held that following the streamlined FSS procedures satisfies CICA’s competition requirements. It follows that when conflicting interpretations of a regulation governing competition in the FSS program are advanced, the interpretation consistent with the principles of CICA should prevail. One such long-recognized CICA principle provides that when concerns of administrative convenience or expediency are being weighed against ensuring full and open competition, the latter should be favored. Stated another way, mere administrative convenience or expediency should not provide a valid basis for restricting competition.

The Small Business Administration (SBA) Mentor-Protégé Program (MPP) allows small businesses to pair with large contractors to form joint venture (JV) entities that can pursue any small business set-aside contract for which the protégé firm individually qualifies as small. The program is designed to be mutually beneficial for participating firms, allowing the protégé to take advantage of the mentor firm’s business development assistance while simultaneously enabling the mentor firm to perform on certain contracts it would not otherwise have access to. Once the JV has an SBA-approved mentor-protégé agreement, it is not considered affiliated with its mentor or protégé firm. The member firms enter into a joint venture agreement (JVA) that must comply with various SBA regulations to benefit from the exception afforded to the usual requirements regarding affiliations. Under the regulations, the small business protégé firm must be designated as the managing venturer responsible for controlling the day-to-day management and administration of the JV. Additionally, a named employee of the protégé firm must serve as the Responsible Manager and be accountable for contract performance.

Meanwhile, the mentor firm is permitted to participate in all corporate governance activities and decisions of the JV as is commercially customary. However, as the holder of the minority ownership interest in the JV, the mentor firm may not exercise negative control over the JV’s activities unless the provisions of the JVA granting such control are also commercially customary. Negative control is defined as the ability, granted by the JV’s organizing instruments, of a party with a minority interest in the JV to block an action by the JV’s board of directors or shareholders. Notably, the SBA Office of Hearings and Appeals (OHA) has previously held that when a firm with a minority ownership interest in a JV has the ability to exercise negative control over a JV’s activities, the JV does not qualify as an eligible small business for set-aside procurements. In such situations, an interested party may initiate a size protest with the contracting officer (CO), who forwards the protest to the appropriate SBA Area Office (AO) for a formal size determination. The SBA OHA then hears any appeals that follow from the AO’s size determination and issues the final decision of the SBA. As long as the SBA determination is made in connection with a procurement, the Court of Federal Claims (COFC) possesses jurisdiction to conduct judicial review of the OHA decision under the Tucker Act by applying the Administrative Procedure Act (APA) arbitrary and capricious standard.

Enacted in 1994, the Federal Acquisition Streamlining Act (FASA) contains a “task order bar” that removes from the coverage of the Tucker Act any protests that relate to the issuance of a task or delivery order, the contract value of which does not meet the monetary threshold of $35 million for defense procurements and $10 million for non-defense procurements. Thus, if the contract value of a task or delivery order falls below these thresholds, the Government Accountability Office (GAO) will not entertain protests challenging the award due to lack of jurisdiction. The general rule for determining contract value for the purposes of establishing protest jurisdiction is to calculate the amount of the task or delivery order award. However, the GAO may, under unique circumstances, look beyond the amount of the award to establish the contract value for the purposes of jurisdiction. Such unique or extraordinary circumstances may include situations where the government utilized unconventional methods for compensating the contractor or employed atypical price evaluation techniques. Absent such unique circumstances, however, the GAO will not look beyond the value of the task or delivery order award to establish bid protest jurisdiction.