Link: GAO Opinion
Agency: Department of Veterans Affairs
Disposition: Protest denied
Agency’s decision to set aside a procurement for small businesses is reasonable where the agency performed market research that demonstrated a reasonable likelihood that the agency would receive offers from two or more responsible contractors at a fair and reasonable price, the agency consulted with the Office of the Small Disadvantaged Business Utilization, and the agency received three offers from small businesses in response to the solicitation.
General Counsel P.C. Highlight:
Med-South protests the solicitation, arguing that the agency should not have set aside the procurement for small businesses. GAO states that under Federal Acquisition Regulation (FAR) sect. 19.502-2(b), a procurement with an anticipated dollar value of more than $100,000, such as the one here, must be set aside exclusively for small business participation when there is a reasonable expectation that offers will be received from at least two responsible small business concerns and that award will be made at a fair market price. The use of any particular method of assessing the availability of small businesses is not required so long as the agency undertakes reasonable efforts to locate responsible small business competitors. The decision whether to set aside a procurement may be based on an analysis of factors such as the prior procurement history, the recommendations of appropriate small business specialists, and market surveys that include responses to sources sought announcements. Because a decision whether to set aside a procurement is a matter of business judgment within the contracting officer’s discretion, GAO’s review generally is limited to ascertaining whether that official abused his or her discretion. GAO will not question a small business set-aside determination where the record shows that the evidence before the contracting officer was adequate to support the reasonableness of the conclusion that small business competition reasonably could be expected.
Med-South contends that the VA’s market research was inadequate and does not demonstrate that at least two small businesses can satisfy the RFP’s requirements. However, GAO’s review confirms both the adequacy of the market research and the reasonableness of the agency’s decision to set aside the procurement for small businesses. In this regard, the record shows that the contracting officer surveyed the market by searching established databases to identify small businesses in the industry, researched those firms, and sought the advice of the Office of the Small Disadvantaged Business Utilization (OSDBU). The contracting officer also reviewed GAO bid protest decisions challenging similar solicitations for home oxygen, including one where the GAO upheld the decision to set aside the procurement for small business. Based on this information, the contracting officer concluded, and the OSDBU concurred, that the VA would likely receive offers from at least two small businesses that were capable of performing the work at a fair and reasonable price. GAO notes, also, that the VA reports that it received offers from three small businesses in response to the solicitation. Based on this market research, GAO finds the agency’s decision to set aside the procurement for small businesses to be reasonable. The protest is denied.