Have you submitted your final proposal? If so, and you’ve bid on a small business set aside supply contract, then it is probably too late to cure a possible violation of the nonmanufacturer rule. In a recent decision, the Small Business Administration’s Office of Hearings and Appeals (OHA) concluded that once a firm has submitted its final bid or final proposal revision, any subsequent changes in performance approach would be ignored for purposes of assessing the challenged firm’s size and compliance with the nonmanufacturer rule.
The appeal was filed by Sea Box, Inc. against Reagent World, Inc. (RWI), regarding an Army solicitation for 12 QuadCon metal containers. OHA denied the appeal, finding that the appellant’s arguments lacked merit, but nevertheless remanded the case to the Area Office for further consideration. The case was remanded because OHA discovered that the Area Office clearly erred in its analysis of RWI’s compliance with the fourth requirement of the nonmanufacturer rule. Specifically, OHA held that the Area Office erred by evaluating RWI’s compliance with the nonmanufacturer rule when it took into consideration a quotation from a subcontractor that was only made available after submission of the final proposal. OHA found that compliance with the rule is determined as of the date of the final proposal, and any subsequent changes will not be recognized.
RWI submitted its final bid on September 11, 2015, and on that final proposal RWI failed to list its subcontractor (the actual manufacturer of the metal containers). In fact, the subcontractor did not provide a quotation for the QuadCons until October 14, 2015, well after the contract had been awarded to RWI. OHA concluded that the Area Office should have based its size determination on the subcontractor whose pricing RWI relied on at the time of the final proposal, and any subsequent amendments were irrelevant for purposes of compliance with the nonmanufacturer rule.
Thus, a violation of the nonmanufacturer rule cannot be cured after submission of a final proposal. Specifically, substituting a new manufacturer after the final proposal date will not be used or considered to establish compliance with the nonmanufacturer rule. “Once a firm has submitted its final bid or final proposal revision, any subsequent changes in approach… would be irrelevant to assessing the challenged firm’s size.”