“Educating the Government Contracting Community”

Can FedBid, Inc. Debar Prospective Bidders?

Does FedBid, Inc. (FedBid), a private company that provides commercial online procurement services to federal agencies and other public procuring entities through its website at www.FedBid.com, have the power to suspend or debar prospective bidders? The question seems ridiculous on it face given FAR 9.403's definition of a "Debarring Official" as the federal agency head or a duly authorized designee of the agency head. How about this one? Can FedBid effectively suspend and debar prospective bidders for simply failing to maintain an actively valid FedBid account? Exactly how broad is FedBid's power to "review and approve only the most credible Sellers"?

When FedBid invalidated a prospective small business vendor's FedBid account it rendered that prospective small business vendor incapable of competing for procurements until its FedBid account was restored. The GAO ruled that FedBid's suspension of that prospective small business vendor's FedBid account constituted an illegal determination of the small business to be not responsible without having first referred the responsibility question to the Small Business Administration. Latvian Connection, LLC, B-410947 (Mar. 31, 2015). http://www.gao.gov/products/D10022#mt=e-report

GAO found unpersuasive the agency's arguments that FedBid acted to suspend the small business vendor without direction or encouragement from the agency. It did not matter that FedBid was a private company or that the basis of FedBid's action was separate from any specific agency guidance. According to GAO the controlling issue was that the small business prospective vendor lost its right to compete for and potentially to receive award of a contract on the basis of an assessment of its integrity without that assessment being performed by the SBA.

Because FedBid's suspension of the small business' FedBid account did not have a time-related endpoint, GAO noted with approval the agency's admission that FedBid's suspension had an impact equivalent to a suspension or a debarment of the small business from receiving government contracts. Despite this admission, GAO refused to rule that FedBid's conduct constituted a constructive debarment because such a decision was beyond the scope of GAO's jurisdiction.

FedBid provides tremendous opportunities for small business government contractors. Federal agencies and non-federal agencies use FedBid to buy a wide variety of goods and services through www.Fedbid.com. But government contractors must be hyper-vigilant in that space because FedBid guards the gate to that marketplace by its own rules. To ensure that your company can succeed in the FedBid world, contact GCARL and become a member at https://www.gcarl.com/becoming-member/

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