Resource Management Concepts, Inc. (B-423503.2, B-423503.4)

You should care.

Category: Small business participation, calculation methodology

Date: 2 September 2025

URL: https://www.gao.gov/products/b-423503.2

Resource Management Concepts protested its elimination from competition for a Navy task order for IT support at the Naval Undersea Warfare Center in Keyport, Washington. The Navy found Resource Management's proposal failed to meet the solicitation's requirement that at least 30 percent of the contract value be performed by small business subcontractors, calculating only 27 percent small business participation. The protester argued the agency's calculation methodology was unreasonable and inconsistent with the solicitation.

Calculation methodology dispute: Resource Management argued the Navy should have excluded surge hours from the small business participation calculation, because surge requirements were indefinite and could not be allocated among team members at the proposal stage. The solicitation required 1,734,980 total labor hours including 228,260 surge hours, and instructed offerors to demonstrate how they would provide at least 30 percent of the "total estimated amount of the task order" to small businesses.

The Navy maintained that the solicitation unambiguously required small business participation to be calculated based on the total estimated task order amount, which expressly included surge hours. The solicitation provided detailed labor hour estimates and instructions for pricing surge requirements, giving offerors no reason to believe surge would be excluded from subcontracting calculations. The agency noted that while Resource Management provided detailed information about small business participation for base work, its proposal simply stated that surge hours "could not be allocated at this time" without explaining how small businesses would be involved in surge performance.

Resource Management alternatively contended that because the solicitation's template formula for computing surge costs incorporated base performance rates that included subcontractor costs, the agency should have assumed the same subcontractor utilization would apply to surge work. GAO rejected this reasoning, finding that the formula's use of blended rates had no bearing on whether the protester actually committed to providing an appropriate share of surge work to small business subcontractors.

GAO emphasized that offerors bear responsibility for submitting well-written proposals with adequately detailed information demonstrating compliance with solicitation requirements. Agencies are not required to infer information from inadequately detailed proposals or supply information offerors elected not to provide.

The protest was denied. The agency reasonably included surge hours when calculating whether Resource Management's proposal met the 30 percent small business participation requirement, and the protester's proposal failed to explain how it would provide small businesses with surge work opportunities.

Contractors be warned: when responding to solicitations with indefinite or surge requirements cannot simply exclude those requirements from subcontracting commitments without explanation. When a solicitation calculates small business participation based on total estimated contract value including surge, offerors must address how they will provide small businesses with meaningful participation in all aspects of performance, even if the exact allocation cannot be determined at the proposal stage.

Digest

Protest challenging the agency's evaluation of the protester's proposed small business participation is denied where the agency's evaluation was reasonable and consistent with the terms of the solicitation.