GSA’s $1.2B strategic sourcing contract clears protest hurdle

The Government Accountability Office has denied claims by a group of protesters that the General Services Administration’s Office Supply Third Generation contract failed to consider the impact on small businesses.

While we don’t cover the office supply market, the $1.2 billion contract has been of interest because it is a strategic sourcing initiative, and several small business questions have been raised. Some people have cited similar concerns about a lack of consideration for small businesses on other contracts.

The contract is considered a bundled contract, and as such should trigger more analysis of its impact on small businesses.

Another interesting element is that the Small Business Administration sided with the protestors and urged GAO to sustain the protests.

But GAO agreed with GSA, who said it didn’t think the contract – a recompete of an existing vehicle – met the requirements laid out in the Small Business Jobs Act.

Still, GSA prepared an 11-page small business analysis before releasing the solicitation as well as preparing market research and looking at alternatives.

Although GSA’s analysis found that there was potential for a negative impact on companies that didn’t win spots on the contract, the benefits of the contract outweighed the negative impact.

One of GSA’s goals with OS3 is to address problems with the Office Supply Schedule, which has worked well, but which GSA said has grown large and has become plagued with scattered purchases and a wide range of prices for similar items, according to the GAO decision.

GSA expects to make about 24 awards, which is what sparked many of the protests because the protesters felt that was too small a number and would exclude too many small businesses. But OS3 is not a mandatory contract, so losing bidders can still market and sell their products to the government.

With these presolicitation protests cleared up, GSA can move forward with awards. I’m sure we’ll see more protests after the awards, but GAO made a clear statement that GSA has handled the small business issue, so that likely will not be a success basis for an award protest.

How this decision impacts other contracts isn’t clear, but from GAO’s description of the steps GSA took to analyze the small business impact, it appears GSA took the issue seriously and justified its position, even if SBA didn’t think so.