Letter alleges CIO-SP4 unfairly favors large businesses over small firms

Gettyimages.com/Pattanaphong Khuankaew

In response to an agency report on the protests, one company claims that half of the large businesses expected to win a seat on the $50 billion IT contract could not qualify if they were small businesses.

We are just a few weeks away from an initial set of Government Accountability Office decisions involving the potential $50 billion CIO-SP4 IT contract.

GAO's docket indicates that it should make a first block of decisions by June 29. A total of 137 protests involving the contract are pending, with due dates scattered across the summer because of when they were originally filed.

Most of the complaints have centered around how the National Institutes of Health's IT Acquisition and Assessment Center has used a self-scoring mechanism to eliminate bidders. Small businesses have complained that NITAAC's threshold for advancing to phases two and three of the procurement is arbitrary.

Over 300 protests have been filed against CIO-SP4 and NITAAC has taken at least two rounds of corrective actions to address the issues, but the moves have not quelled the complaints.

Washington Technology has obtained an agnecy-agreed upon redacted response letter that one company sent to GAO after it received NITAAC’s report that was filed after it received the company’s protest.

Keep in mind that this letter is just the company’s response and doesn’t include the agency’s side of the debate, but it does offer some valuable insights and details into the battle.

The letter alleges that NITAAC’s approach favored large business bidders at the expense of small businesses.

Small businesses had to receive a near-perfect score to qualify for phase two, according to the letter that claims large businesses could move on to phase two with lower scores than those required of small businesses.

Nearly half of the large businesses that were allowed to move to phase two would not have advanced if they were small businesses and had to meet the SB threshold, that protestor claims in the letter.

“This absurd result perfectly highlights the arbitrary nature of the agency’s cutoff lines,” the company says.

The letter also highlights a complaint we’ve heard since the start of the CIO-SP4 protests: the procurement favored small business joint ventures or teams that include a large business teaming partner.

According to the letter, 97% of the small businesses named in a preliminary awardee list had a teaming partner and only eight out of 616 small businesses on the list went it alone.

The letter also points out that CIO-SP4 was set up as a three-phase competition, which brings up something new to us.

Phase one is the self-scoring evaluation. Phase two was to show proof of certain certifications. Phase three was a comparative analysis or best-value trade-off decision.

The new to us allegation is the NITAAC dropped phase three and made no comparative analysis, according to this letter.

“It is clearly evident that the agency dispensed with the three phased evaluation scheme set forth in the solicitation and instead turned phase 1 into the de facto selection criteria,” the company alleges in its letter.

The company argues that if it had known phase one was going to be the basis for an award, it would have changed its proposal strategy.

If this allegation holds, it might be the final straw that convinces GAO to send NITAAC back to redo the solicitation.

One intriguing takeaway of this letter is how often it refers back to the agency’s response to the protest. I’m sure this is a typical strategy, but in essence the protester is using the agency’s own words against it.

My understanding is that the allegations in the pending protests are very similar. Whether the first group of protests is either denied or sustained, those GAO decisions will have a domino effect on the others.

If NITAAC loses, we’ll likely see them take the GAO recommendations and apply them to remaining protests as a corrective action.

If GAO denies the protest, I expect to see many companies withdraw because they know they’ve lost.

Stay tuned.