1) Is the SETA contractor allowed to provide an unsolicited proposal for the administrative services work as a sub along with an 8(a) prime.
2) Would the SETA contractor be disqualified stating unfair business practices or inside information, even though the contractor is not privy to costing or any proprietary information?
There are several issues within the question asked 1) is there an actual or potential conflict of interest 2) use of an unsolicited proposal. From the information you provided it appears unclear whether the SETA will be providing a proposal or an employee of the SETA acting on behalf of his personal company.
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If the employee is acting on his own behalf then the appropriateness of the employee pursuing this effort and potentially causing the appearance of a conflict of interest is an issue for the employee and his SETA employer. Our concern would be if the employee had access to information based on his position with the SETA that would provide him with a competitive advantage.
If you have any concerns about a potential conflict of interest you MUST seek guidance from your legal counsel as early as possible in the acquisition process (see FAR 9.504). The primary conflict of interest would normally arise in this situation if the Systems Engineering And Technical Assistance (SETA) contractor in any way assisted the government in the preparation of the statement of work for the administrative contract (see FAR 9.505-2) in which case the SETA would clearly be precluded from proposing on the administrative services effort. You need to review the SETA statement of work and also review any organization conflict of interest clauses and non-disclosure agreements in the SETA contract. Provide this information to your counsel for provide guidance on the scope of the SETA work and any limitations on competition. You also need to consider whether or not there is the appearance of a conflict of interest, again seek legal counsel.
Once the conflict of interest issue is resolved then consider whether the use of the unsolicited proposal is appropriate. Here there a couple of other considerations:
1) Per FAR 15.603(a) unsolicited proposals allow for consideration and evaluation of unique and innovative ideas or approaches that have been developed outside the Government. It would be a significant stretch to believe that the unsolicited proposal for administrative services is unique and it clearly is in response to an existing requirement developed within the Government and not independently originate as specified in 15.603(c). FAR 15.607(a)(2) states that an unsolicited proposal must be returned if it closely resembles a pending competitive acquisition requirement.
2) If the unsolicited proposal is at the subcontractor level, then unsolicited proposal would not be submitted directly to the government but must go to the prime contractor. It is up to the 8a prime to determine who it will include in its proposal to the government and its own team composition. The government's concerns should only be whether the team has any conflicts of interest and whether the 8a prime is delivering the appropriate amount of the effort.
3) An unsolicited proposal cannot be used to circumvent competition (see FAR 6.303-1) and so the effort could not be awarded based on the unsolicited proposal without pursing appropriate competition or the use of a justification for other than full and open competition.