Bid Protest Spotlight: Certification, Lateness, SBA Eligibility

This month's bid protest roundup highlights one decision from the U.S. Court of Appeals for the Federal Circuit, addressing a proposal timely submitted but received late, and two decisions from the U.S. Government Accountability Office, highlighting the nuances of certification requirements and small business eligibility requirements, respectively. Whether maintaining small business eligibility, submitting timely proposals, or considering proposals that must meet certification requirements, each decision provides actionable insights concerning what government contractors should be considering pre- and post-award.

ATP Gov, LLC[1]

In ATP Gov, LLC, (ATP), a small business, protested the U.S. Air Force's award of a delivery order for portable satellite terminals under the NASA Solution for Enterprise-Wide Procurement (SEWP) indefinite-delivery, indefinite-quantity (IDIQ) contract. The solicitation required offerors to propose a terminal assembly certified by the Army Forces Strategic Command for operation with the Wideband Global Satellite Communications (WGS) system at the time of proposal submission. ATP argued that iGov's proposed terminal assembly failed to meet this requirement due to a forthcoming need to recertify and was therefore ineligible for award.

The solicitation mandated compliance with specific technical requirements, including WGS certification. The solicitation also explicitly stated that the terminal assembly must be WGS-certified at the time of proposal submission. This requirement was clarified through a question-and-answer (Q&A) exchange that became part of the solicitation.

During the competition, ATP proposed a fully compliant terminal assembly that was certified for WGS operations. iGov, however, offered a base terminal that was WGS-certified but would require modifications to meet the solicitation requirements. Such modifications would, in turn, necessitate recertification of the terminal assembly. Nonetheless, the Air Force awarded the delivery order to iGov, which had proposed a lower price.

The parties largely agreed on the facts: although the base terminal was WGS-certified at time of submission, the terminal-as certified-lacked the required auto-tracking capability. Thus, although the awardee proposed modifications to provide auto-tracking capability, those modifications would require the terminal assembly to be recertified.

ATP argued that the iGov's proposed terminal assembly did not meet the material requirement to be certified at the time of the submission. The agency responded that the solicitation was silent on timing of certification and that it would only make sense to impose the requirement at the time of integration testing. Yet, the agency also acknowledged that it confirmed in Q&As that the terminal must be WGS certified at time of proposal submission. The agency argued in the alternative that, if the Q&As modified the solicitation, the agency's answers only meant that the offeror's solution had to be based on a WGS-certified terminal.

The GAO sustained ATP's protest, finding that iGov's proposed terminal did not, in fact, meet the solicitation's material requirements at the time of proposal submission. The GAO emphasized that:

• The Q&As' clarifications were incorporated into the solicitation as amendments.
• The Q&As explicitly required WGS certification at the time of proposal submission.
• iGov's modified terminal assembly required recertification, which rendered it non-compliant with solicitation terms.
• The Air Force's acceptance of iGov's proposal disregarded a material solicitation requirement, unfairly disadvantaging ATP.

Key Takeaways

Timing is everything, and the timing of certification-or recertification-matters. If a solicitation mandates certifications at the time of proposal submission, offerors must ensure their proposed solutions meet these requirements upfront or challenge the requirement prior to proposal submission. Even minor deviations from solicitation requirements, including those that improve competitive pricing, can have significant consequences.

eSimplicity, Inc.[2]

In eSimplicity, Inc. v. United States, the Federal Circuit dismissed an appeal of a Court of Federal Claims (COFC) decision and, in doing so, chose not to address a long-standing split in how the GAO and COFC approach proposal timeliness issues.

In the underlying case,[3] eSimplicity protested the Navy's rejection of its proposal for technical support services due to an alleged late submission. Despite eSimplicity submitting the proposal approximately an hour and a half before the deadline, the Contracting Officer did not receive the proposal because of file-size limits and issues with the Navy server. Although the solicitation did not state any file-size requirements, the Navy deemed the proposal untimely and excluded it from consideration. eSimplicity argued that the rejection of its proposal relied on undisclosed evaluation criterion (file size) and that the Navy misapplied the late-is-late exceptions, namely the government control exception and the electronic commerce exception.

Under the late-is-late rule, proposals must be received by the government by the deadline in the solicitation. If a proposal is even a minute late, it will be rejected as untimely. The government control exception, however, applies where an emailed proposal was received at the government installation that was designated for receipt of offers and was under government control at the time required by the deadline. Separately, the electronic commerce exception provides an exception for proposals "received at the initial point of entry to the Government infrastructure not later than 5:00 p.m. one working day prior to the date specified for receipt of offers."[4]

COFC ruled in favor of eSimplicity, finding file size was, in effect, an unstated evaluation criterion. While Simplicity did not meet the requirements for the electronic commerce exception to apply, the court discussed the distinctions and overlap between the two late-is-late exceptions. COFC concluded that the government control exception includes electronically submitted proposals. However, COFC did not resolve whether the elements of the government control exception were met in eSimplicity's specific case.

After losing the protest, the Navy issued a revised solicitation (Solicitation II), resolving the issue by including explicit file-size limits. Under Solicitation II, eSimplicity ultimately won the contract. The government nevertheless appealed the adverse COFC decision to the Federal Circuit.

On appeal, the government argued, inter alia, that the government sought to "exercise its right to terminate eSimplicity's contract upon the basis that it should not have been awarded in the first place." The Court rejected that request for relief because the government was appealing a decision that concerned Solicitation I, whereas eSimplicity was awarded a contract under Solicitation II.

The Court also highlighted that the government failed to appeal COFC's holdings applying the government-control exception. That the government could have appealed the government-control-exception issue in previous cases but chose not demonstrated that the government merely wanted to appeal in this instance-not that the issue was capable of repetition, yet evading review.

The Federal Circuit dismissed the government's appeal as moot, emphasizing that the contract awarded to eSimplicity under Solicitation II resolved the dispute, leaving no live controversy for the court to address.

In reaching this outcome, a split between COFC and GAO approach to timeliness remains intact: Where the GAO applies the rigorous late-is-late rule, COFC may be comparatively forgiving of email submissions received late due to government technical issues.[5]

Key Takeaways

On the one hand, agencies must ensure that all evaluation criteria, including technical requirements, such as file size limits, are explicitly stated in the solicitation to avoid disputes.

On the other hand, those seeking to protest a determination that a proposal submission was untimely still may find a more favorable audience at COFC.

Regardless, where file size has not been explicitly stated, offerors may benefit from submitting questions during the solicitation phase to mitigate risks. It is also best practice to submit electronic proposals before 5:00 p.m. on the day before the due date, avoid unusually large file sizes if practical, double-check that the submitted files are the files one intended to submit, and confirm that the designated agency addressee has received the submission in good order.

Analytica[6]

Analytica LLC protested its exclusion from a Department of Homeland Security (DHS) solicitation for data strategy support services, arguing that it complied with necessary procedural steps to acquire a Small Business Administration (SBA) 8(a) contract through novation by the General Services Administration (GSA). However, DHS deemed Analytica ineligible (over SBA's objections) because SBA approval of the transfer occurred after the proposal submission deadline, a requirement under federal regulations.

Potomac Management Solutions, LLC (Potomac), held an Oasis 8(a) contract that was among certain assets acquired by Analytica from Potomac. The same month that Analytica acquired Potomac, Analytica and Potomac sought approval from both GSA (through novation) and SBA (through the 8(a) waiver process) for the transfer of the OASIS 8(a) contract to Analytica. In response, GSA executed a modification recognizing the novation and Analytica as the contractor. Following the modification, the protester submitted a proposal in response to a request for proposals, and after evaluation, USCIS issued the task order to Analytica.

Initially, the award to Analytica was protested by two unsuccessful offerors. In response, the GAO dismissed the protest when the agency indicated it was taking corrective action, including further investigation into whether Analytica was an eligible OASIS 8(a) pool 1 contract holder at the time of proposal submission. The investigation confirmed that a GSA contracting officer had novated the contract prior to the deadline for proposal submission. An SBA lead business opportunity specialist confirmed that, despite the novation, SBA had not approved a waiver request under 13 C.F.R. § 124.515 or a substitution under 13 C.F.R. § 124.518(c) at the time of proposal submission. Based on this fact, the investigation found that "Analytica has not obtained SBA approval to assume the Potomac Management Solutions OASIS 8(a) contract and should not have submitted a proposal for this action until that SBA approval was received." As a result, Analytica was not eligible for award. Analytica challenged the agency's decision to eliminate its proposal from the competition following the investigation.

The Small Business Act, 15 U.S.C. § 637(a) provides broad discretion to the SBA in selecting procuring requirements for an 8(a) contract. Included in this broad discretion, "[w]here an 8(a) concern that received a contract will no longer perform, the 8(a) contract must be terminated for the convenience of the government unless the SBA Administrator waives the termination requirement." In special circumstances, another 8(a) firm may complete performance, and SBA may permit novation without applying the termination for convenience or waiver provisions. USCIS argued that, because it had not waived the requirement to terminate for convenience when the contract was transferred, the agency was required to find Analytica ineligible for award.

Analytica asserted that "GSA approved the novation pursuant to FAR 42.1204" and that "approval of the novation is dispositive of its validity," arguing that, in the partnership agreement (PA) between SBA and GSA, SBA delegated authority to approve the novation to GSA. Analytica did not address USCIS's contention that the waiver of the termination or grant of permission of novation is a nondelegable responsibility of the SBA Administrator. Analytica contended that GSA approval alone was sufficient.

GAO requested SBA comments on the reasonableness of the ineligibility determination. In the SBA's view, there was "no evidence . . . that Analytica knew or should have known that SBA had not authorized Potomac's substitution request," and the SBA did not believe that Analytica should have been deemed ineligible "by operation of SBA rules." In essence, the SBA contended that Analytica was eligible for award because SBA authorized the novation-albeit after the proposal due date.

The GAO disagreed, emphasizing that SBA's explicit approval is critical for maintaining 8(a) eligibility during contract transfers. Despite receiving GSA's approval for the novation, SBA's nondelegable authority and timing requirements rendered Analytica ineligible, and "SBA's interpretation of the regulations [was] unreasonable." The GAO underscored that eligibility determinations depend on timely compliance with SBA regulations, not post hoc validations.

Key Takeaways

Contractors acquiring 8(a) contracts must be aware of the complicated regulations governing transfer of these contracts and the necessary coordination between SBA and procuring agencies that these regulations contemplate. Delays or incomplete approvals can disqualify an otherwise compliant proposal.

Cody Fisher, an associate in our Washington, D.C. office, contributed to the writing of this article.

[1] ATP Gov, LLC, B-422938, B-422938.2 (Dec. 12, 2024)

[2] eSimplicity, Inc. v. United States, No. 2023-1216 (Fed. Cir. Dec. 16, 2024).

[3] See eSimplicity, Inc. v. United States, 162 Fed. Cl. 372 (2022); see also Roke Iko, October 2022 Bid Protest Roundup: Late-Is-Late Rule, Compensation Plans, Morrison Foerster (Nov. 9, 2022).

[4] FAR 52.212-1(f)(2)(i)(A).

[5] Compare VERSA Integrated Sols., Inc., B-420530, Apr. 13, 2022, 2022 CPD ¶ 98 (declining to overturn prior GAO decisions finding that FAR provision 52.212-1(f)(2)(i)(B) does not apply to proposals submitted electronically), with eSimplicity, Inc. v. United States, 162 Fed. Cl. 372 (2022) (discussing the application of the government control exception to electronic submissions).

[6] Analytica LLC, B-422681.3, B-422681.4 (Nov. 26, 2024).

Public link

Please use the above public link if you want to share this noodl on another website.