The SBA's 8(a) business development program is designed to help small, disadvantaged businesses compete in the federal marketplace. It has helped thousands of aspiring entrepreneurs to gain access to Government contracts. To qualify, small businesses must be owned and controlled at least 51 percent by socially and economically disadvantaged individuals who are American citizens. It also helps to be able to demonstrate potential for business success and possess good character.
Participation in the 8(a) business development program is divided into two phases covering nine years - a four-year developmental stage and a five-year transition stage. The goal is to graduate businesses that will go on to thrive in a competitive business environment.
There are significant benefits to program participation not the least of which is the ability to bid on contracts that are "set-aside" specifically for 8(a) contractors. One such set-aside was a solicitation issued last year by the Energy Department for mission-oriented technical support services (whatever that term means). There were three 8(a) bidders for the work including Boston Government Services (BGS) who ultimately won the award based on its highest technical rating and lowest cost, and Redhorse Corporation.
When Redhorse learned that it had lost the bid, it appealed to GAO (Government Accountability Office) on the grounds that BGS would be graduating from the SBA 8(a) business development program within 14 months at which time it would be unable to fulfill the remainder of the 48 month contract. BGS would need to certify its 8(a) status each time an order was placed under the resulting BPA (blanket purchase agreement). Redhorse, on the other had would retain its 8(a) status throughout the 48 month period of performance.
How do you suppose the GAO ruled on this bid protest?
The GAO found no merit to Redhorse's allegation because the solicitation did not require the Energy Department to consider each vendor's future 8(a) eligibility when evaluating quotations. None of the six specific evaluation factors required it to consider a vendor's future 8(a) eligibility. GAO denied the protest.
The full GAO decision can be found here.