Todd Jacobson
WC Monitor
10/24/2014
The Department of Energy has stopped work on a recent support services contract award to Link Technologies after a team led by Project Enhancement Corporation filed a protest with the Government Accountability Office late last week. The protest represents the latest turn of events in a battle over the three-year, $44 million nuclear safety and security support services small business set-aside contract for DOE’s Office of Health, Safety and Security, which was originally awarded to PEC last year through the National Nuclear Security Administration’s technical services blanket purchase agreement.
Link Technologies, however, successfully challenged PEC’s eligibility for the contract as a small business with the Small Business Administration’s Area II Office, and the SBA’s Office of Hearings and Appeals rejected PEC’s appeal of the size determination earlier this month. The procurement combined two previous HSS contracts, for nuclear safety support and security support, that were held by PEC and Protection Strategies Incorporated, respectively, for the last 10 years.
PEC Pushing for Recompete of Contract
In its protest with the GAO, PEC said the decision by the SBA raised a number of ambiguities about the procurement and “fundamentally changed” the competition, and it said if its proposal was disqualified due to the size standard challenge, the contract should have been recompeted because there was only one other bid—from Link. DOE “neglected to acknowledge that the scope of the procurement had been materially changed to such an extent that it should have been cancelled or resolicited, in a situation when cancellation would have been fully warranted,” PEC said in its Oct. 17 protest, a copy of which was obtained by WC Monitor.
PEC, which is a member of the MELE team for NNSA’s technical services BPA, teamed with Protection Strategies Incorporated, MELE, ICF Incorporated, and Nuclear Safety Associates. “All we really want is a fair shot,” PEC President Rick Martinez said in a statement to WC Monitor. “We won it fair and square the first time and we want an opportunity to have a fair shot to win it again.” DOE extended PEC’s contract through Dec. 25 with the possibility of another three one-month options while the protest is decided, according to an Oct. 22 posting on fbo.gov. PEC’s three-month option through Dec. 25 is worth $1.25 million, and with the options, the extension could be worth $2.5 million. GAO has 100 days to decide the protest.
Size Standard Exception at Heart of Controversy
Link’s initial size standard challenge centered on an exception under the North American Industry Classification System size standard utilized by the PEC team. The three NAICS codes used for the procurement—professional engineering services (PES), administrative management and general management consulting services (MOBIS), and environmental consulting services (ENV)—each have a $14 million size standard, which would have precluded PEC from bidding, but PEC used a $35.5 million exception for military and aerospace equipment and military weapons under the professional engineering services schedule. PEC qualified for the contract under the exception and was selected for the award on May 1, but the SBA found that the exception did not apply to the procurement, disqualifying PEC’s bid. It also established a new NAICS code (MOBIS) and size standard ($14 million) for the procurement.
A $44 million contract was awarded to Link under the MOBIS schedule Oct. 14—on the same day that PEC was informed by DOE that its award was being terminated. PEC’s bid for the work was $43 million. “When SBA established a new NAICS code/size standard (not available under the BPA), they fundamentally altered the nature of the procurement—this change would have had a significant impact on corporate strategies, teaming arrangements, teaming partnerships, and decisions of companies considering to submit or not submit a bid,” PEC said in its protest. “This also results in an invalid award and creates extremely limited or zero competition—essentially creating a nearly $50 [million] sole source award.”
PEC: DOE Acted in ‘Bad Faith’
PEC said DOE should have been obligated to perform additional market research after the SBA ruled on the exception and assigned a new NAICS code and size standard, and it questioned DOE’s decision to award the contract to Link on the same day that its contract was terminated. “It would not seem likely that DOE completed this new or updated market research, indicating bad faith actions by DOE,” PEC said in the protest. “This compounded prior bad faith actions by DOE, including failure to adequately respond to repeat SBA Area Office and OHA judicial requests for declaration of size standard.”
In a statement provided to WC Monitor, Link Principal Ali Tabatabai defended his company’s role in the procurement. “All Link has advocated all along is a fair shot and accountability in the process so only the truly legitimate small businesses have a shot at taxpayer funded small-business set-aside federal procurement opportunities,” Tabatabai said. “The immediate corrective actions taken by DOE in response to the SBA Area Office and OHA decisions is a testimony to the integrity of the process and the professionalism of its decision makers.”
SBA Finds Focus of Contract Not Military, Aerospace Related
The SBA found the Request for Proposals for the contract did not explicitly allow companies to use the exception, though other RFPs under the NNSA BPA did, and the SBA noted that the performance work statement does not mention weapons or aerospace equipment and focuses on administrative and technical services in support of HSS program offices. “The work the contractor will perform is not connected with weapons or aerospace equipment, nor with the design, engineering, or maintenance of weapons or aerospace equipment,” SBA Administrative Judge Kenneth Hyde said in an Oct. 6 denial of PEC’s appeal.
Hyde noted that the performance work statement called for technical and support services in personnel security, site vulnerability analysis and risk assessment, security policy review, development and implementation, nuclear facility design requirements evaluation, nuclear facility safety program review, quality assurance policy development and implementation, radiological protection program development and management, worker safety and health program evaluation, accident investigations, and general administrative and technical support.
PEC, however, argued that the contract called for inventory and control of nuclear weapons-grade materials and was more than an administrative contract, and it argued in its appeal that the NNSA intended for all contracts under the BPA to use the exception. While the SBA acknowledged confusion surrounding the size standard, with Hyde writing in his Oct. 6 decision that the RFQ “invites conflicting interpretations,” Hyde said the SBA was correct in using its discretion to clarify the issue and preclude the use of the size standard exception. “The very fact that the TEPS BPSA is susceptible to so much interpretation demonstrates the opacity of the size standard for orders issued under the PES Schedule,” Hyde wrote. “I therefore agree with the Area Office and Link that the size standard for the RFP was unclear.”
PEC: Procurement Lacked ‘Fairness, Integrity, or Due Process’
PEC also said in its protest that DOE at least four times established the $35.5 million size standard during the procurement. “Until SBA’s final ruling, PEC reasonably interpreted its award as valid and was prepared to begin performing at the resolution of the SBA appeals,” PEC said in the protest, noting that the award was stripped from PEC “without recourse or a clear path to challenge the lack of fairness, integrity, or due process.”
Martinez said that he feared the decision could have far-ranging impacts on NNSA and the BPA. “Our concern is that this could impact the Department of Energy’s ability to continue to access BPA holders under the $35.5 million exception,” Martinez said.
