Link: GAO Decision
Protestor: Herman Miller, Inc.
Agency: Department of the Air Force; General Services Administration
Disposition: Protest Denied.
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GAO Digest:
- A solicitation with a two-tiered acquisition approach, under which manufacturers would receive contracts that include not-to-exceed prices for furniture systems and dealers would receive separate contracts for installation of the systems at prices not exceeding the manufacturers’ prices, provided sufficient information to allow manufacturers to intelligently compete on an equal basis and does not place undue risk on the manufacturers.
- GAO does not have jurisdiction to hear challenge to agency’s selection of North American Industry Classification System (NAICS) code, nor jurisdiction to hear challenge that agency’s two-tiered acquisition approach will preclude manufacturers’ dealers from being considered small businesses under the Small Business Administration’s regulations.
General Counsel PC Highlight:
Herman Miller, Inc. protested the terms of an RFP for systems and modular furniture for domestic Air Force installations. The RFP, issued under the commercial item acquisition procedures of FAR Part 12, provided for a two-tier acquisition process. In the first tier, four awards would be made to furniture manufacturers on a lowest-price, technically-acceptable basis, with manufacturers providing NTE prices for furniture systems and other related items which would be procured under the second tier. The second tier was set aside for small business dealers of the manufacturers that were awarded contracts under the first tier, and consisted of competition for contracts for the installation of the systems and modular furniture. Herman Miller expressed concerns that the agency’s requested NTE furniture prices from manufacturers had implications with respect to the price reduction clauses contained in the manufacturers’ GSA schedule multiple award contracts.
The GAO disagreed with Herman Miller that the solicitation did not provide sufficient detail to allow offerors to compete intelligently and on a relatively equal basis, thereby imposing unreasonable risk on offerors. It pointed out that the GSA issued a memorandum which stated that, solely for purposes of this two-tier procurement, the GSA would forbear enforcement of the price reduction clause for vendors that request a contract modification from GSA. The GAO also found that the solicitation provided for a meaningful consideration of price, noting that, contrary to Herman Miller’s assertions, the first tier contracts will be for more than obtaining annual program management reviews and data reporting. Finally, the GAO held that it did not have jurisdiction to hear challenges to the NAICS code designations, disagreeing that it should have jurisdiction because Herman Miller, as a large business, lacked standing to file a NAICS code appeal at the SBA.
While the GAO has jurisdiction to hear a variety of disputes concerning the awards of federal contracts, its jurisdiction is not exclusive nor is it exhaustive. Certain issues regarding the set aside and award of contracts under small business programs reside exclusively within the authority of the SBA. If a potential offeror objects to the NAICS code designation of a procurement, such a protest is properly filed with the SBA and not with the GAO.