NIH loses first CIO-SP3 Small Business protest

So far the National Institutes of Health is 3-and-1 in defending its decisions involving the $20 billion CIO-SP3 Small Business contract.

NIH is trying to make new awards to the IT services contract via an on-ramping process but so far it hasn’t made awards because of a series of protests filed with the Government Accountability Office.

So far, the Government Accountability Office sided with NIH in denying protests from Leader Communications Inc., AttainX Inc. and FreeAlliance.com LLC because they didn’t submit verification of an adequate cost accounting system from the Defense Contract Audit Agency.

But NIH ended up on the losing end of a protest by Competitive Range Solutions LLC out of O’Fallon, Ill. NIH rejected their proposal because it didn’t show that the company had capabilities in health-related missions.

The company argued that because NIH CIO-SP3 is an IT services contract, it only to show it had IT services experience. GAO rejected that argument.

But NIH’s fatal flaw was because the evaluation was a two-phase process. In phase one, NIH evaluated proposals on four Go/No-Go requirements. It was during this process that Competitive Range Solutions, also known as CRS, was rejected.

During phase one, CRS was not compared or judged against any other bidders so the company argued that NIH had actually made a non-responsibility determination. GAO agreed and said it was improper for NIH to do that. Instead, the agency should have referred the proposal for a ruling by the Small Business Administration. SBA makes those kinds of determination as part of its certificate of competency procedures.

GAO likely wouldn’t have sided with CRS if NIH had rejected the company after comparing its proposal to other small businesses.

In its recommendation, GAO wants NIH to refer the proposal to SBA for the certificate of competency. If SBA signs off, NIH should evaluate CRS under its phase 2 procedures.

I think GAO’s decision doesn’t give CRS much hope of ultimately winning a spot on the contract. GAO rejected CRS position that it didn’t need health-related capabilities. It only need to show it provide IT services in a health-related setting. But we’ll see.

NIH still faces five pending protests involving CIO-SP3 Small Business. They are expected to be resolved in July.

I wouldn’t be surprised if there are more protests after the actual awards are made. According to the GAO decision, NIH received 552 proposals from companies wanting to get on the contract via the on-ramp. Surely, they all won’t be winners.