Link: GAO Decision
Protestor: Kevcon, Inc.
Agency: Department of Veterans Affairs
Disposition: Protest Denied.
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GAO Digest:
Protest challenging an agency’s decision to not set aside a procurement for service-disabled veteran-owned small businesses (SDVOSB) is denied where the agency concluded from its market research that it did not have a reasonable expectation of receiving proposals from two or more SDVOSBs capable of performing the required services
General Counsel PC Highlight:
Kevcon, Inc. protested the terms of an RFP for construction services at the Tahoma National Cemetery in Kent, Washington. Kevcon alleged that the agency failed to conduct sufficient market research to determine whether there were two or more SDVOSBs capable of performing at a reasonable price. The agency had received seven responses to its sources sought notice, only three of which were SDVOSBs; the agency determined that of those three, only Kevcon was capable of meeting the requirements. The agency determined that the procurement should not be set aside for SDVOSBs, but that a general small business set-aside was appropriate. Kevcon then complained to the agency, identifying two other SDVOSBs (who had not responded to the sources sought notice) that Kevcon represented were interested in performing. The agency conducted further market research with respect to those two companies, but determined that they were not capable and that an SDVOSB set-aside was not appropriate.
The GAO found that none of Kevcon’s arguments provided a basis to object to the VA’s decision to set aside the RFP for small businesses. The GAO found no merit to Kevcon’s argument that the agency should have contacted firms in locations other than Washington, Oregon, and Ohio. It noted that, although Kevcon provided additional companies it indicated were interested in performing, Kevcon did not demonstrate that the other market research conducted was inadequate.
The VA is required to consider setting aside a procurement for SDVOSBs or VOSBs before conducting full and open competition or procuring through another set-aside. When determining whether to set aside a requirement for SDVOSBs, 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 SDVOSB firms and that award can be made at a fair and reasonable price. While a disappointed prospective offeror may wish to challenge a non-SDVOSB set-aside on the grounds of inadequate market research, it should remember that the GAO will generally defer to the agency as to whether the research was reasonable.