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Proposal Did Not Violate Limitation on Subcontracting Rule

Posted on April 29th, 2016 by

In Express Medical Transporters, Inc., B-412692 (April 20, 2016), the GAO denied a protest alleging that a proposal was technically unacceptable for the alleged failure to comply with the limitation on subcontracting rule.  The VA issued a solicitation for patient transportation services.  It was set aside for small businesses.  The limitation on subcontracting regulation required that at least 50% of the cost of services be performed by the prime contractor.

The challenged proposal made several references to “independent contractors” who would serve as drivers.  The proposal also referred to employee drivers.  The GAO held that there is nothing wrong with subcontracting out work to independent contractors.  And most importantly, the proposal did not clearly indicate that the contractor did not plan on performing at least 50% of the services itself. The GAO therefore denied the protest.

This case illustrates the importance of not only complying with the limitation of subcontracting requirement, but also drafting a proposal that does not take exception to this rule.  In reaching its decision, among other items, the GAO pointed to the following proposal statements as proof that the contractor intended on complying with the limitation on subcontracting requirement:

  • We have a full and complete understanding of the VA transportation system and the requirements of the [RFP].
  • The Contract Compliance Manager position ensures that contract performance expectations, relevant FAR regulations identified in the contract, and general government regulations are adhered to. The compliance manager works closely with the contracting officer and their technical representative (COTR) to ensure that all contract provisions are met.

You may want to consider adding general statements of compliance with the Federal Acquisition Regulations in your proposal too.  Even better, state that you understand the Limitation of Subcontracting requirements and will comply with this rule.



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