CIO-SP4 Amendment 7: Major Changes for Small Business and Large Business Prime / Subcontractor Teams

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PilieroMazza PLLCThe National Institutes of Health Information Technology Acquisition and Assessment Center (NITAAC) just issued major changes to the Chief Information Officer-Solutions and Partners 4 (CIO-SP4) Request for Proposals (RFP) under Amendment 7 to the RFP. These changes will impact both small and large business teams who intend to rely on subcontractors (i.e. FAR 9.601(2) Contractor Team Arrangement (CTA) members).

For small business teams, Amendment 7 clarifies that only first-tier subcontractors can be used for purposes of meeting the requirements for self-scoring points under RFP Section L.5.2. Additionally, small business prime / subcontractor teams are now required to submit their teaming agreements with their proposals, which are now due on August 3rd.

Most importantly, Amendment 7 appears to limit the ability of small businesses to rely on large business subcontractors. Specifically, the RFP states that NITAAC will “only consider the members of a CTA defined under FAR 9.601(2) for evaluation purposes if the Offeror includes a proposed team of small business subcontractors as defined in provision 52.207-6(a).” Thus, it appears that large business subcontractors will no longer be counted for purposes of self-scoring or evaluation. Arguably, this also includes your mentor if you are bidding as a prime / subcontractor rather than a joint venture, as there is no express carve-out in the RFP. FAR 52.207-6(a)(2)(i) does, however, provide a carve-out for mentor-protégé arrangements bidding on civilian procurements. If there truly is a blanket prohibition, it likely makes the RPF unduly restrictive of competition yet again, as we seem to be back to square one where this RFP started—unless this is just an unintended consequence of including FAR 52.207-6 in this latest amendment, as it refers to small business teaming arrangements.

Amendment 7 also adds new limits on other than small and emerging large business teams by limiting the use of subcontractors to only Corporate Experience, Leading Edge Technology Experience, Federal Multiple Award Experience, Executive Order 137779 Experience, and Facility Clearance Level. No longer can large businesses rely on subcontractors for Capability Maturity Model Integration, Earned Value Management Systems, Estimating Systems, International Organization for Standardization Certifications, or Approved Purchasing Systems.

Lastly, RFP Section M.4, which covers the Phase 3 evaluation, now seems to indicate that businesses can no longer use subcontractors to meet the “Health IT Capability” factor, Factor 1. They can still use joint venture members under FAR 9.601(1) but not subcontractors under FAR 9.601(2). The change to Phase 3 evaluation does not seem to impact Phase 1. This may just be an oversight, as it is unclear why NITAAC would allow the use of subcontractors during the Phase 1 evaluation but not Phase 3. Regardless, the new Phase 3 restriction certainly increases risk for prime contractors who do not have Health IT Capabilities themselves, as they may be ineligible for award without forming a joint venture.

However, right after noting the new Phase 3 evaluation restriction, RFP Section M.4 states that NITAAC will consider information from all small business CTA teams under either FAR 9.601(1) or FAR 9.601(2). This is limited to CTAs in compliance with 13 CFR 125, which are really just joint ventures, or RFP Section L.3.7, which includes the new FAR 52.207-6(a)(1)(ii) small business teaming agreement requirement discussed above. Given this language, small business teams—so long as they are joint ventures following Small Business Administration joint venture requirements or prime / subcontractor teams made up of all small businesses with FAR 52.207-6(a)(1)(ii) compliant teaming agreements—may be able to rely on all small business CTA members for any purpose. Again, though, this is not entirely clear, as RFP Section M.4 could just be internally inconsistent. NITAAC should be pushed to clarify this point.

All of these changes are major shake-ups to the RFP and could throw many teams into disarray. This has already happened more than once to many businesses, and Amendment 7 may be the most serious change to the RFP since it was initially released in final form. Small businesses in particular who planned to rely on large businesses are now left out in the cold. Prime / subcontractor teams bidding on CIO-SP4 need to read Amendment 7 carefully and determine how extreme the impact is on their team.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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