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Latvian Wins Bid Protest Against FedBid for Determination of Non-Responsibility

Posted by Joseph Whitcomb on Apr 14, 2015 3:26:20 PM

Fed-Bids Determination of Non-Responsibility

Kevin Barnes, the service connected veteran owner of Latvian Connections, filed a pro se pre-award bid protest with the GAO against FedBid, Inc.  FedBid, was acting as an agent for the Department of the Interior, U.S. Geological Survey, in a reverse auction platform and had suspended Latvian, because Latvian had  in FedBid’s terms “taken actions to repeatedly and purposely interfere with FedBid’s business relationships. “  FedBid continued:

Right to Terminate: Latvian Connection’s use of the FedBid marketplace demonstrates that Latvian Connection has not used (and does not use) the FedBid marketplace as required in the FedBid Terms of Use.

FedBid’s terms of use provide that “FedBid may refuse the Services to any person or any entity at any time, in FedBid’s sole discretion.”  Because Latvian was no longer registered with FedBid and FedBid was the only medium for competition for this particular contract, Latvian was unable to bid on this $95,159 shelving installation project.

Latvian argued in its protest that, because it was unable to bid due to its FedBid suspension, the suspension amounted to either an improper de facto disbarment or a negative responsibility determination.

The Department of Interior’s first response was, of course, that Latvian was not an “interested party,” because it was not registered with FedBid and had never been awarded a contract using FedBid.  The GAO responded by pointing to the obvious fact that Latvian was in fact protesting the Agency’s use of FedBid in the procurement process, and if successful, would place itself in contention for the bid.  The GAO pointed to the significance of Latvian’s filing before the award of the contract.

Regarding Latvian’s argument that FedBid had essentially debarred it without the benefit of an SBA Certificate of Competency (COC) procedure, which it had previously ruled, in another Latvian decision, was not allowed.  See Latvian Connection, LLC, supra; FitNet Purchasing Alliance, B-410263, Nov, 26, 2014, 2014 CPD ¶ 344 at 6-7.  The GAO reiterated that a “Government procurement officer . . . may not, for any reason specified in the preceding sentence preclude any small business concern or group of such concerns from being awarded such contract without referring the matter for a final disposition to the Administration.”

In making its determination, the GAO ruled that:

Although FedBid, a private company, was the entity that precluded Latvian’s ability to compete for the contract, we have previously held that when FedBid hosts a reverse auction on its website, it acts as an agent for the agency conducting the procurement. AeroSage LLC, B-409627, July 2, 2014, 2014 CPD ¶ 192 at 4. As a result, we conclude that the DOI, through its agent, FedBid, precluded Latvian Connection, a small business, from competing for, and potentially being awarded, a contract on the basis of the firm’s integrity, without referring the matter to the SBA. This amounted to a determination of non-responsibility, which the agency should have referred to the SBA for a COC determination. Latvian Connection, LLC, supra. Therefore, we sustain the protest on this basis.

SBA Protest

In December 2014, Latvian filed a bid protest related to a State Department procurement, which also utilized FedBid’s reverse auction platform.  Fedbid had suspended Latvian for taking “actions to repeatedly and purposely interfere with FedBid’s business relationships.”   In its February 26, 2015, decision, the SBA related that the State Department’s acceptance of the FedBid’s suspension of Latvian was a per se determination of non-responsibility.  Juxtaposed to a determination of non-responsiveness, the SBA found that a determination of non-responsibility required an SBA COC finding.

In making this finding, the SBA cited to a GAO determination stating:

A contracting agency cannot—merely by the terms of a solicitation—change a matter of responsibility into one of responsiveness. Raymond Engineering, Inc., B–211046, July 12, 1983, 83–2 CPD ¶ 83. Responsibility refers to the bidder's apparent ability and capacity to perform all of the contract requirements; responsiveness concerns whether a bidder has unequivocally offered to provide supplies or services in conformity with the material terms and conditions of the solicitation. See Skyline Credit Corp., B–209193, May 15, 1983, 83–1 CPD ¶257.

“Regardless of the mechanism used, the agency and the contracting officials are responsible for ensuring that all applicable federal procurement statutes and regulations are followed,” the SBA reasoned.  When a small business like Latvian is denied opportunities to submit bids because of integrity issues, the matter must be referred for an SBA Certificate of Competency.  The State Department did not do this.  Instead, “the Department of State’s rejection of Latvian was a determination made by the contracting officer, based on the recommendations of its agent Fedbid, which he/she did not have to accept, but did.  The Department of State’s decision was a determination of non-responsibility that should have been referred to SBA.”  The SBA determined that Latvian should have been allowed to bid or the matter should have been referred to the SBA.

Topics: SBA Bid Protest, Bid Protests, Government Procurement, sdvosb, bid protest, Bid Protest attorney, bid protest attorneys, bid protest lawyer, finding of non-responsibility, GAO bid protest, GAO bid protests, government contracting, government contracts attorney, government procurement law

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