Matter of M&C Venture Group, LLC

Agency: Department of Veterans Affairs

Disposition: Protest Dismissed

Decided: September 15, 2020

Keywords: Timeliness of Protest; Preaward Protest

General Counsel P.C. Highlight:

A protest based upon alleged improprieties that are apparent in a solicitation must be filed prior to the closing time for receipt of proposals.

Summary of Facts

M&C Venture Group, LLC (M&C), a service-disabled veteran-owned small business (SDVOSB), protests the terms of RFP No. 36C24219R0109. The RFP was issued by the Department of Veterans Affairs (VA), for residential housing services at the Northport VA Medical Center as part of the healthcare for homeless veterans program.

The RFP was issued on August 5, 2019, on an unrestricted basis. The solicitation anticipated award of a fixed-price, indefinite-delivery, indefinite-quantity contract. Proposal were due on September 6, 2019.  On August 16 and August 26, M&C requested that the VA set aside the procurement for SDVOSBs. On August 20 and August 27, the VA responded that it had conducted market research and determined that there was no reasonable expectation that the VA would receive two or more qualified offers from SDVOSBs at a fair and reasonable price. (The “Rule of Two” set aside requirement).

Following the VA’s initial award decision, M&C filed a protest arguing that the VA failed to evaluate proposals in accordance with the stated evaluation criteria and failed to conduct a proper best-value tradeoff analysis. In response to that protest, the VA proposed to take corrective action by terminating the contract award, reevaluating proposals consistent with the solicitation terms, and making a new award decision. The VA concluded its reevaluation and determined discussions were necessary. On June 10, M&C received a letter informing it that M&C was in the competitive range and identifying areas of its proposal that the VA determined were deficient, weak, or uncertain. Final proposal revisions were due June 17. M&C filed this protest on June 12.

Basis of Protest

M&C alleges the VA’s market research and its decision not to issue the RFP as an SDVOSB set-aside were unreasonable. M&C also argues that by establishing a competitive range, conducting discussions, and requesting revised proposals, the VA failed to implement the corrective action it proposed.

Protest Dismissed

GAO explained that the Bid Protest Regulations contain strict rules for the timely submission of protests. These rules require that a protest based upon alleged improprieties in a solicitation that are apparent prior to the closing time for receipt of initial proposals be filed before that time. GAO noted that, here,

the VA issued the solicitation on August 5, 2019, as an unrestricted procurement with proposals due September 6. M&C emailed the contracting officer TWICE requesting that the procurement be set aside for SDVOSBs. On August 20 and 27 the contracting officer informed M&C that the VA had performed market research and determined that there was no reasonable expectation that the VA would receive two or more qualified offers from SDVOSBs at a fair and reasonable price. GAO determined that, here, M&C was informed 10 days before the initial RFP closed that the VA would

not set aside the procurement for SDVOSBs.  GAO states that this was “ample time” for M&C to file a protest challenging the solicitation terms before the time set for the receipt of proposals. Additionally, GAO explained that the solicitation was issued as an unrestricted procurement initially and no subsequent amendment changed that status. Thus, to be timely, M&C was required to file its protest, challenging the solicitation’s terms and the agency’s market research, before the initial proposal due date, since the basis for M&C’s protest existed in the initial solicitation. GAO concluded that since M&C’s protest was filed after the deadline for initial proposals, it was untimely.

In regards to M&C’s second argument that the VA failed to take the corrective action it proposed, GAO explained that the Bid Protest Regulations require that a protest include a detailed statement of the legal and factual grounds for the protest, and that the grounds stated be legally sufficient. GAO specified that the requirements “contemplate that protesters will provide, at a minimum, either allegations or evidence sufficient, if uncontradicted, to establish the likelihood that the protester will prevail in its claim of improper agency action.” GAO noted that M&C failed to allege facts that establish the likelihood that the VA violated applicable procurement laws or regulations. GAO explained that the VA’s decision to conduct discussions and seek final proposal revisions, which may include revised price proposals, is an inherent part of the procurement process and consistent with the terms of the solicitation. GAO also noted that agencies are not precluded from seeking revised prices even after prices have been exposed.

The GAO dismissed the protest on these grounds.