Link: GAO Decision
Protestor: DMS Pharmaceutical Group, Inc.
Agency: Department of Veterans Affairs
Disposition: Protest Denied
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GAO Digest:
Protest by small business against the rejection of its proposal and the consequent withdrawal of a small business set-aside under a solicitation with a cascading evaluation feature, which contemplated the withdrawal of the set aside if the agency received less than two acceptable small business responses, is denied, where the agency received only two small business proposals and the protester’s proposal was reasonably evaluated and found technically unacceptable.
General Counsel PC Highlight:
DMS Pharmaceutical Group, Inc. protested the rejection of its proposal and the withdrawal of a small business set-aside line item under an RFP for pharmaceutical products. The RFP contemplated multiple awards and solicited proposals for various geographic regions included under separate line items, two of which were set aside for small businesses. DMS’s protest only concerned line item 6, a small business set-aside for the Great Lakes region. The RFP provided for award of the small business line items to be based on a cascading evaluation method, which contemplated withdrawal of the set-aside and award on an unrestricted basis if the agency received less than two acceptable small business responses. DMS was one of two small businesses to submit proposals for line item 6, each of which was determined by the agency to be technically unacceptable for receiving “no-go” ratings on some of the “go/no-go” evaluation factors. The agency also found that the proposed prices of each small business were not fair market prices.
The GAO found that the technical evaluation of DMS’s proposal resulting in several no-go ratings was reasonable. It noted that DMS failed to provide required screen shots and sample reports showing that its inventory management system possessed the necessary capabilities. It found untimely the argument by DMS that the requirement that small business offerors currently possess an inventory management system was unduly restrictive, pointing out that this issue should have been raised prior to the time set for receipt of initial proposals. The GAO found the rejection of DMS’s proposal as technically unacceptable to be proper.
Agencies will set aside a requirement for small businesses where there is a reasonable expectation that offers will be received from at least two small businesses capable of performing and that award can be made at a fair and reasonable price. Although the agency may initially set aside a requirement for small businesses, they can reserve the right to award on an unrestricted basis should no small business offeror prove to be capable of performing at a reasonable price.