Link: GAO Decision
Protestor: Phoenix Environmental Design, Inc.
Agency: Department of Veterans Affairs
Disposition: Protest Sustained.
Protest that the Department of Veterans Affairs (VA) violated the Veterans Benefits, Health Care, and Information Technology Act of 2006, and its implementing regulations when the VA issued an order to a small business concern, is sustained where the VA was aware of service-disabled veteran-owned small business (SDVOSB) concerns that appeared capable of performing the order, and the agency did not determine that it could not expect to receive two or more quotations from SDVOSB concerns at fair and reasonable prices.
General Counsel PC Highlight:
Phoenix Environmental Design, Inc. protested the issuance to Golf Enviro Systems, Inc. of a purchase order for the supply of bagged fertilizer for the Santa Fe National Cemetery, New Mexico. The agency’s purchasing agent, using simplified acquisition procedures under FAR Part 13, searched VetBiz for possible vendors and located 16 possible vendors, including Phoenix, none of which were located in New Mexico. She contacted three vendors, not including Phoenix, via email seeking quotations; two did not submit quotations, and the third submitted a quote for a different kind of fertilizer. Phoenix was contacted about quoting fertilizer at two other cemeteries, but not Santa Fe. After the purchasing agent determined that the only quote received for Santa Fe would not meet the agency’s needs, she issued an order to Golf Enviro, a small business, rather than continuing to try and find two or more SDVOSB concerns.
The GAO first rejected the agency’s assertion that Phoenix was not an interested party on the grounds that it had not submitted a quotation. The GAO pointed out that Phoenix was challenging the agency’s failure to solicit Phoenix for the order, as well as the agency’s improper issuance of the other to a small business concern where there were other SDVOSBs that could satisfy the requirement, and that Phoenix therefore had the requisite direct economic interest as a prospective offeror. The GAO noted that, although the agency argued that it had solicited three SDVOSB sources in accordance with simplified acquisition procedures, this did not relieve the agency of its obligation to set aside the requirement for SDVOSBs. Because the agency had not made a reasonable determination that it could not expect to receive quotations from two or more SDVOSBs, the GAO found that it had violated the Veterans Benefits, Health Care, and Information Technology Act of 2006.
The VA is required to consider setting aside a procurement for SDVOSBs or VOSBs before proceeding under another set-aside program or conducting a full and open competition. SDVOSBs and VOSBs should maintain their status in the VIP database so as to qualify as an interested party should the VA fail to follow set-aside regulations. This is the latest in a string of VA procurements that have been successfully protested to the GAO. However, the VA officially notified the GAO in previous decisions that it would not follow the GAO recommendation based on the VA’s disagreement with the GAO over interpretation of the law.