Link: GAO Opinion
Agency: Department of Veterans Affairs
Disposition: Protests denied.
Keywords: SDVO Set asides
General Counsel P.C. Highlight: The Veterans First Contracting Program provides the VA with independent authority to set aside contracts for Service Disabled-Veteran Owned (SDVO) Small Businesses and Veteran-Owned Small Businesses (VOSB) firms. SDVOSB firms receive first priority and acquisitions must be set aside for SDVOSB firms if the VA determines that there is a reasonable expectation that offers will be received by at least two SDVOSB firms and that award can be made at a fair and reasonable price.
Buy Rite Transport protests the Department of Veterans Affairs (VA) decision to set aside exclusively for service-disabled veteran-owned small businesses (SDVOSB) request for proposals (RFP) for laboratory specimen courier services.
The VA’s requirements for laboratory specimen courier services for a VA health-care center in Oregon were originally issued as a VA-exclusive, veteran-owned small business set-aside for the transportation of laboratory specimens. The pre-solicitation notice for the procurement identified the North American Industry Classification System (NAICS) code for taxi services, but was issued under the NAICS code for Couriers and Express Delivery Services. The RFP was protested by a SDVOSB, claiming that it should have been set aside for SDVOs rather than for VOSBs. Under the VA rules, SDVO set asides have priority over VOSBs. In response to the protest, the VA advised GAO that it would take the corrective action and set aside the procurement for SDVOSB firms.
Prior to taking corrective action, the VA had conducted research using an online database of businesses eligible to participate in its SDVOSB program and found over 100 SDVOSB firms nationwide. The agency subsequently divided the geographical territory of the procurement into two separate areas and issued two solicitations covering each geographical area. Both new procurements were set aside for SDVOSB firms under the NAICS code for Couriers and Express Delivery Services. Buy Rite, a VOSB firm, protested the VA’s corrective action to set aside the solicitations for SVOSB firms.
GAO states that the Veterans First Contracting Program provides the VA with independent authority to set aside contracts for SDVOSB and VOSB firms. SDVOSB firms receive first priority and acquisitions must be set aside for SDVOSB firms if the VA determines that there is a reasonable expectation that offers will be received by at least two SDVOSB firms and that award can be made at a fair and reasonable price.
The protester argued that there was not two SDVOs available in the relevant geographical areas to perform this work and thus should not have been set aside for SDVOs and that the research for setting aside the procurement was done before the decision to divide the geographic scope of the procurement. GAO determined that there was no requirement that the SDVO offerors reside within the geographical area of the procurement. Further, GAO states that regardless of the precise date when the VA conducted its search, the search results provided a reasonable basis for the VA to conclude that it would receive at least two offers from SDVOSB firms. GAO also performed a search to confirm the accuracy of the VA’s results. Finally, the VA’s receipt of four offers from SDVOSB firms during the first solicitation further confirms the decision to set aside the requirements. In sum, GAO concludes that the VA’s decision to set aside these procurements for SDVOSB firms was reasonable, considering its search and its receipt of four offers from SDVOSB firms in response to the prior solicitation, which was set aside for VOSB firms. The protests are denied.