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Akira Technologies, Inc., B-410898, March 10, 2015
Link: GAO Opinion
Agency: Department of Veterans Affairs
Keywords: Broad discretion given to an agency’s determination of procurement strategy; supplemental protest adding new facts and new allegations must be timely filed.
General Counsel P.C. Highlight: The GAO determined that the VA acted reasonably in not reserving a solicitation for Historically Underutilized Business Zone (“HUBZone) small business concerns.
Akira Technologies, Inc. (“Akira”), a Historically Underutilized Business Zone (“HUBZone”) small business protests the terms of a RFP issued by the Department of Veteran Affairs (the “VA”).
The VA issued an RFP anticipating the award of up to 20 indefinite-delivery/indefinite-quantity (“IDIQ”) contracts for information technology services. Four of the awards were reserved for Service Disabled Veteran Owned Small Business concerns (“SDVOSBs”), four awards were reserved for SDVOSBs or Veteran Owned Small Business concerns (“VOSBs”), and four awards were reserved for small business concerns generally. The reserve strategy used by the VA was pursuant to the Small Business Jobs Act of 2010 which provides agencies with discretion to reserve one or more contract awards for small business concerns when using full and open competition in a multiple-award procurement.
Prior to issuing the RFP, the VA conducted research to assess the interest and capability of small businesses in meeting their requirements. The VA issued a request for information (“RFI”) with a draft performance work statement on FedBizOpps which directed interested companies to indicate their business size, socioeconomic status, whether they were interested in being a prime contractor or a subcontractor, and whether they could independently provide the entire range of services required. The VA received 240 responses of which 138 were from small businesses. Of these small businesses, 97 percent said that they were interested in serving as a prime contractor and that they could do at least 50 percent of the work. Seventy-four of the responses were from VOSBs of which 65 were SDVOSBs. Only 6 HUBZone small businesses responded – four indicated that they were interested in being prime contractors and only three indicated that they could do more than 50 percent of the work.
The VA also conducted a technical risk and business risk analysis for each respondent: six of the SDVOSBs were categorized as low risk and five VOSBs and one SDVOSB was characterized as medium risk. No HUBZone small business was characterized as having either low or medium risk.
As a result of an evaluation of prior procurement history, the number of responses to the RFI received from small businesses, and the VA’s risk evaluation, the VA determined that a total small business set-aside was not appropriate and instead determined that, for the purpose of the RFP, it would reserve contract awards for small businesses using the following reserve strategy:
1.It would first make awards to eight offerors regardless of business size;
2.It would then award four contracts to SDVOSBs and an additional four contracts to SDVOSBs or VOSBs, less the number of SDVOSBs and VOSBs awarded in the first step, assuming a sufficient number of contractors in these socioeconomic categories remained in the competitive range;
3.It would then award contracts to up to four additional small businesses, regardless of their socioeconomic status; and
4.The Agency would reserve the right to make additional awards, reserved or unrestricted, if the Agency determined that it is in its best interest to do so.
Akira filed an initial protest contending that the VA acted unreasonably when it did not reserve awards specifically for HUBZone small businesses. The Small Business Jobs Act provides that an agency has broad discretion in deciding whether to reserve awards for small businesses, once it has determined that it will use full and open competition for a multiple-award contract. In response to its RFI, the VA received responses from only six HUBZone small businesses and of which only three indicated that they were capable of performing more than 50 percent of the work. Further, the VA assessed each of these businesses with more than medium risk. Notwithstanding that other information may have indicated that more HUBZone small businesses were interested in the procurement, the GAO concludes that given the record and the broad discretion provided to agencies, there is no basis for conclude that the Agency’s action in not specifically reserving any awards for HUBZone small business concerns was not unreasonable. The initial protest was therefore dismissed.
After filing its initial protest, Akira filed a supplemental protest contending that the Agency should have set aside the entire procurement for small businesses. The GAO determined that the supplemental protest was untimely filed. Per GAO rules, when a protest is filed and later supplemented with new grounds of protest, the supplemental protest must also be timely filed. Here, although the RFP clearly established that the procurement was not being set aside entirely for small businesses, Akira did not raise this issue until after the closing date of the RFP. Because Akira had all of the information it needed to timely challenge the VA’s decision before bids were due, the supplemental protest was untimely filed. As a consequence, it was dismissed by the GAO.
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