Link: GAO Decision
Protestor: DNO Inc.
Agency: Small Business Administration
Disposition: Protest Sustained.
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GAO Digest:
1. Protest challenging agency decision not to set aside for small business concerns a contract for a pilot program to compile a list of approved fruit and vegetable vendors for domestic food nutrition assistance programs is sustained where agency’s decision was based on insufficient efforts to ascertain, and inaccurate assumptions of, small business capability to perform the contract.
2. In a best value procurement, a solicitation that requests unit pricing from offerors without identifying what each unit reflects or against what quantity the proposed unit prices would be applied to determine an evaluated price for each offeror, does not provide sufficient information to allow a common basis for evaluating proposed prices.
General Counsel PC Highlight:
DNO Inc. protested the terms of an RFP for fresh fruits and vegetables, on the grounds that the solicitation should have been set aside for small business concerns. DNO also argued that the RFP was defective because it failed to provide estimated quantities. The RFP informed offerors that the contractor would be required to actively market to, and fill orders from, specified school districts for particular fruits and vegetables. Offerors were instructed to propose unit prices for each produce item, but the RFP did not provide estimates for the contract line items or define units against which unit prices would be applied.
The GAO noted that, in commenting on this protest, the SBA complained that the USDA breached an agreement with the SBA with respect to setting aside all procurements for apple, blueberry, and grape products, as well as some procurements for carrots. SBA also contended that the USDA did not conduct the level of market research necessary to make a reasonable determination about whether two responsible small business concerns would submit offers. The GAO concluded that the USDA did not make sufficient efforts to ascertain whether the procurement could be set aside for small businesses. The GAO also agreed with DNO that the solicitation failed to provide sufficient information to allow for a common basis for evaluating offerors’ proposed prices.
When determining whether to set aside a requirement for small businesses, an agency is required to conduct market research to determine whether 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. The agency cannot base its decision not to set aside a requirement on assumptions and beliefs regarding the status of small business participation in the market in question.