Link: GAO Decision
Protestor: KNAPP Logistics Automation, Inc.
Agency: Department of Veterans Affairs
Disposition: Protest Denied.
Protest challenging an agency’s decision to set aside a procurement for small businesses is denied where the record shows that the contracting officer reasonably expected that at least two responsible offerors would submit offers and that award would be made at a fair market price.
General Counsel PC Highlight:
KNAPP Logistics Automation, Inc. protested the terms of an RFP to replace the tablet capsule automation (TCA) system in North Charleston, South Carolina. The initial solicitation was issued on an unrestricted basis, and KNAPP protested after award was made to R/X Automation Solutions, Inc. (R/X). Prior to issuing a supplemental agency report in response to a supplemental protest by KNAPP, the agency chose to take corrective action by cancelling the award to R/X and issuing a new solicitation. The revised solicitation was issued as a total small business set-aside.
Since R/X was a small business who had submitted an acceptable proposal in the initial solicitation, the GAO considered whether the CO’s determinations with regard to the other two potential small business offerors were reasonable. The GAO found reasonable the CO’s belief that one small firm, which had been deemed technically unacceptable in the initial solicitation, would submit an acceptable proposal the second time because it had received a debriefing which had alerted the firm to its shortcomings in the initial solicitation. The CO determined that the second firm demonstrated significant experience in the commercial sector which indicated that it would be able to meet the agency’s requirements. Turning to the expectation of award at a reasonable price, the GAO found reasonable the CO’s reliance on the competitiveness of the market.
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. While a disappointed prospective offeror may wish to challenge a total small business set-aside, it should remember that the GAO will generally defer to the agency’s determination so long as the research was reasonable.