Link: GAO Decision
Protestor: CYIOS, Inc.
Agency: Department of the Army
Disposition: Protest Denied.
- Protest that procurement consolidating information technology support services was an impermissible bundling of requirements is denied, where the agency reasonably determined that consolidation would result in substantial cost savings and efficiencies and was necessary to meet the agency’s needs.
- Protest that procurement should be set aside for small business concerns is denied, where agency reasonably found, based upon market research and the publication of a sources sought notice, that the agency was not likely to receive proposals from at least two small businesses with sufficient experience to perform the overall requirement.
General Counsel PC Highlight:
CYIOS, Inc. protested the issuance of a solicitation under the GSA’s Alliant government-wide acquisition program for IT support services. The agency had previously relied on three contracts with large businesses to provide a full range of IT support services, but had experienced chronic problems trying to integrate the three vendors into a larger, technically and operationally co-dependent environment. The agency prepared a determination and finding (D&F) that detailed the benefits and savings associated with consolidating the requirements, concluding that consolidation would save more than $5 million over the life of the contract. The agency performed market research to determine whether two or more qualified and capable small businesses could successfully act as prime vendors, and concluded that limiting competition to only small business vendors would pose a significant and unacceptable risk.
The GAO rejected CYIOS’s arguments challenging the agency’s consolidation of the contract requirements. It pointed out that CYIOS had not meaningfully challenged any aspect of the agency’s analysis, including its calculation of cost savings and other substantial benefits the agency believed it would obtain through consolidation. The GAO then rejected CYIOS’s assertion that the agency improperly failed to set aside the requirement for small businesses, finding reasonable the agency’s conclusion based on its market research that insufficient small business vendors were capable of successful performance as primes. The GAO highlighted the fact that CYIOS had not responded to the agency’s RFI when it was assessing the capabilities of the small business community.
Agencies are permitted to consolidate or bundle requirements where the agency reasonably determines that doing so will result in significant cost savings or efficiencies. While a potential offeror may believe that the consolidation will restrict competition because it will prevent firms that only furnish a portion of the requirement from competing, the potential offeror must challenge whether the agency will in fact be able to achieve the cost savings or efficiencies justifying the bundling. Protests regarding improper bundling or consolidation must be filed prior to the time for the submission of proposals or they will be considered untimely.