CSRA protest raises questions about what should or shouldn't be a small business contract

Last week, I published a post about CSRA protesting a Homeland Security Department contract where they were the incumbent. DHS is moving forward with the recompete as a small business set aside under the Eagle II contract.

I wrote that CSRA protested to the Government Accountability Office because it wasn’t allowed to compete for an incumbent contract.

While technically that is true, I’ve since learned that the issues goes beyond that. In fact, CSRA isn’t the only incumbent involved. Just the only one to file a protest.

DHS is bundling several contracts into a single vehicle. CSRA is the incumbent on just one of those contracts. Phacil is an incumbent on another contract. And there are at least two other contracts being consolidated into a single task order. The contract will be used for IT operations support services for the DHS Immigration and Custom Enforcement agency.

Neither CSRA or Phacil would comment for this story.

My source told me that with the bundling of the work, the annual spend through the task order will likely be $40 million-$50 million a year over the four years of the contract. That makes the contract potentially worth $200 million.

The issue, according to my source, is that the scope is too large for a small business when you consider the size standard for small businesses under Eagle II is about $26 million in annual revenue.

Of course, small businesses can team and bring in large business partners but it begs the question of whether a small business will have the infrastructure and resources to manage such a large piece of work, according to my source.

That puts a different twist on the issues and creates an interesting question for GAO to address. I wonder if they’ll go down that path and examine what’s appropriate for a small business and what’s not. Or they could say DHS has the discretion to decide what should be a small business contract and what shouldn’t. Interesting questions all around.

CSRA filed its protest on May 4, so GAO has until Aug. 14 to make a ruling.