Controversial Research Contract Faces Possible Bid Protest

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By Cheryl Bolen

The possibility of a bid protest is confronting a controversial new contract awarded by the Small Business Administration’s Office of Advocacy to two researchers whose previous work has been widely criticized.

The Small Business Administration’s Office of Advocacy on Sept. 21 awarded researchers W. Mark Crain and Nicole V. Crain a contract worth $136,250 to conduct a study on the disproportionate cost impact of regulations on small businesses, due in December 2018.

The choice of Jupiter, Fla.-based Interaction Analytics, which employs only the Crains, to conduct the study raises red flags because of their two previous, highly controversial reports: one in 2010 for the Office of Advocacy and a similar one in 2014 for the National Association of Manufacturers.

The criticism grew so intense that in 2013, the Office of Advocacy added an introduction clarifying that “the findings of the study have been taken out of context and certain theoretical estimates of costs have been presented publicly as verifiable facts.”

Protest Possible

Competing for the contract was one other bidder whose identity has not been made public, but who may have grounds to protest the SBA’s decision to award the contract to the Crains.

If the company that did not win disagrees, it has the right to protest the award by lodging a formal challenge with either the Government Accountability Office or the U.S. Court of Federal Claims, said Steven Koprince, managing partner at Koprince Law LLC, who specializes in small-business contracting.

Thousands of bid protests are filed each year, but relatively few are successful, statistics show. The GAO sustained 17 percent of bid protests between fiscal 2009 and fiscal 2014, according to a 2015 report from the Congressional Research Service. Nearly 2,800 bid protests were filed with the GAO in fiscal 2016, that agency said in an annual report.

A company has the right to protest if it loses the contract as a result of improper evaluation, violation of the solicitation terms, violation of the law, or arbitrary analysis among other terms, Koprince told Bloomberg Government.

Agencies typically don’t release the list of bidders for contracts, although it’s not prohibited, Koprince said. Bloomberg Government has filed a Freedom of Information Act request with the SBA for the identity of the other bidder.

Questionable Basis for Award

What’s interesting about this solicitation notice is that it identifies several clauses that are supposed to be incorporated, Koprince said.

“And one of those clauses says low price,” Koprince said. “But when you read the solicitation, it says best value. So it wasn’t even clear to me what the basis of the award was. Was it based on low price? Or was it based on best value?” he said.

Koprince said he wonders whether that means the researchers could still get the award as long as they had the low price and their past performance wasn’t so concerning that it made them unacceptable.

Or, if the basis was best value and these researchers had poor past performance, then that should have affected the analysis of whether they presented the best value to the government, Koprince said.

“And again, were they lower priced, or were they not?” Koprince said. “That’s another key consideration.”

Concern on the Hill

Separately, concerns about the award of this contract are starting to be raised on Capitol Hill.

“It is disturbing that the [SBA] would pay the same researchers whose anti-regulatory work has been widely debunked and disavowed by the agency itself,” said Rep. Elijah Cummings (D-Md.), ranking member of the House Oversight and Government Reform Committee.

“SBA’s Office of Advocacy should focus on helping small businesses—not squandering taxpayer dollars to resurrect bogus claims about the costs of regulations,” Cummings said in a statement emailed to Bloomberg Government.

To contact the reporter on this story: Cheryl Bolen in Washington at cbolen@bgov.com

To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com

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