Link: GAO Opinion
Agency: Department of the Army
Disposition: Protest denied.
Keywords: Small business set-aside; Sources sought notice; Capability of performing
General Counsel P.C. Highlight: Before making a small business set aside the FAR only requires the Contracting Officer to determine that it is reasonable that two or more small businesses capable of performing may make offers, not that two or more offers will actually be received.
GAO denies the protest of Six3 Systems, Inc. of the decision by the Department of the Army Intelligence and Security Command (INSCOM) to set aside for small business competition a request for proposals (RFP), for identity intelligence (I2) biometrics services.
Six3 protests the contracting officer’s determination that the solicitation would remain a small business set-aside. GAO states that under Federal Acquisition Regulation (FAR) sect. 19.502-2(b), a procurement with an anticipated dollar value of more than $150,000, such as the one here, must be set aside for exclusive 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 fair market prices. 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, our 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 demonstrates a reasonable basis for the contracting officer’s conclusion that small business competition may be expected.
GAO first notes that the protester incorrectly asserts that before making a small business set-aside determination, a contracting officer must determine that offers will be received from two or more responsible small businesses. The FAR does not require a determination that offers will be received from two or more responsible small businesses–it requires only a determination that offers from two or more responsible small businesses may reasonably be expected. Moreover, in making set-aside decisions, agencies need not make either actual determinations of responsibility or decisions tantamount to determinations of responsibility with regard to prospective offerors; they need only make an informed business judgment that there are small businesses expected to submit offers that are capable of performing.
The record demonstrates a reasonable basis for the contracting officer’s conclusion that both businesses are capable of performing. In their responses to the sources sought notice, prospective offerors were asked to self assess their teams’ skill level in each of ten biometric functional areas on a scale of 1-5, with 1 representing little or no experience and 5 representing a high level of experience. One business represented that its team had a skill level of 4 or 5 in eight of the required functional areas, and a skill level of 3 in a ninth area, whereas the other business represented that its team had a skill level of 4 or 5 in nine of the required functional areas, and a skill level of 3 in the tenth area. The contracting officer found that both companies had grown significantly in the past year, demonstrating, in her view, that they were capable of taking on a sizeable workload increase and enlarging their operations to meet the requirements of the RFP. The contracting officer also found that both had good past performance ratings, both had provided fair and reasonable pricing on other government contracts, and neither had delinquent federal debt. The protest is denied.