Link: GAO Opinion
Agency: Department of Justice
Disposition: Protest denied.
Protest that solicitation for administrative support services should have been set aside for historically under utilized business zone (HUBZone) or small business concerns is denied, where agency reasonably determined from market research, past procurement history, and consultation with the Small Business Administration that there was not a reasonable likelihood that two or more responsible HUBZone or small business offerors would submit proposals at a fair and reasonable price.
General Counsel P.C. Highlight:
GSN argues that the solicitation should have been set aside for historically underutilized business zone (HUBZone) concerns or, in the alternative, small business concerns, and that the requirements were improperly bundled. GAO states that an acquisition expected to exceed $100,000, such as the one here, must be set aside exclusively for HUBZone or small business contractors where there is a reasonable expectation that offers will be obtained from at least two responsible HUBZone or small business concerns and the award will be made at a fair and reasonable price. A contracting officer must make reasonable efforts to ascertain the likelihood of receiving HUBZone or small business offers, but no particular method of assessing the availability of small businesses is required; measures such as prior procurement history, market surveys, and advice from the Small Business Administration (SBA) may all constitute adequate grounds for not setting aside the procurement for HUBZone or small business concerns. The determination of whether to set aside a particular procurement involves a business decision within the broad discretion of the contracting officer, and GAO will not sustain a protest challenging the determination absent a showing that the determination was unreasonable.
Here, the contracting officer conducted a market survey of available small businesses within North American Industry Classification System (NAICS) code 561210. The contracting officer published a sources sought notice with a detailed statement of work on FedBizOpps and received responses from 15 small businesses, including three HUBZone concerns. The contracting officer evaluated these responses in light of the volume, scope, and nature of the work to be performed under the RFP; documented her findings and analysis; and concluded that none of the 15 responding HUBZone or small business contractors would be able to submit proposals that would meet all of the requirements of the RFP. In this regard, she stated that none of the 15 responding HUBZone or small business contractors had the personnel, equipment, capital or experience necessary to handle the integration of [the] ENRD’s diverse services. Significantly, the protester did not respond to the sources sought notice or otherwise express interest in the procurement. Although the protester now generally asserts that it is capable of performing the requirements, it has provided no evidence to support the general assertions that it can perform the requirements of the RFP.
The contracting officer also considered the history of the procurement, including the nearly identical solicitations for the 1997 and 2003 contracts, neither of which was set aside for HUBZone or small business concerns because the market surveys revealed that the DOJ would not likely receive at least two offers from responsible HUBZone or small business concerns. Although the first solicitation was protested for failing to set aside the requirement, the GAO upheld the agency’s decision to issue the solicitation on an unrestricted basis. The second solicitation was not challenged on this basis, and no acceptable proposals were submitted by small business concerns in response to the solicitation.
The contracting officer also consulted with a DOJ small business specialist and the director of the DOJ’s Office of Small and Disadvantaged Business Utilization (OSDBU), both of who concurred with the decision not to set aside the procurement. The director of the OSDBU met with the SBA procurement center representative to discuss the procurement and the responses to the sources sought notice, and the director made the contract file available to the SBA procurement center representative for the SBA’s review. The SBA procurement center representative did not object to or express concern with the DOJ’s determination to not set aside the procurement for HUBZone or small business concerns.
Finally, in response to the protest and the DOJ’s agency report, the SBA challenged, for the first time, the DOJ’s market research and contended that four of the small businesses that responded to the sources sought notice demonstrated the capability to perform the work. However, as the DOJ points out, two of these small businesses demonstrated the capability to perform only part of the required work, a third asserted that it would team with a large business without providing any information about the teaming arrangement or the large business’ capability, and the fourth could only perform the work through a teaming arrangement that was untested. Although there may be some merit to the SBA’s concerns regarding the appropriateness of denying the capability of the fourth small business based on an untested teaming arrangement, the record does not show as unreasonable the contracting officer’s determination that the other three small businesses failed to sufficiently establish that they could perform the work. Therefore, even assuming that the SBA’s objections regarding the fourth small business are meritorious, we would have no basis to find unreasonable the contracting officer’s determination that there was not a reasonable likelihood of receiving an offer from two or more responsible small business concerns. In sum, based on the procuring agency’s market research, and in the absence of any objection from the SBA procurement center representative, GAO finds the contracting officer’s decision to issue the solicitation on an unrestricted basis to be reasonable. The protest is denied.