BNUMBER: B-271012
DATE: May 15, 1996
TITLE: CardioMetrix
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Matter of:CardioMetrix
File: B-271012
Date:May 15, 1996
Robert J. Loring, Ph.D., for the protester.
H. Charles Coburn, Esq., Federal Bureau of Prisons, Department of
Justice, for the agency.
Peter A. Iannicelli, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest that request for proposals for laboratory services should have
been set aside for small businesses is denied where the record does
not show that the contracting officer abused his discretion in
determining that there was not a reasonable expectation of receiving
proposals from at least two responsible small offerors.
DECISION
CardioMetrix protests the decision of the Federal Bureau of Prisons
(BOP) not to set aside request for proposals (RFP) No. 276-1054 for
exclusive small business participation. We deny the protest.
Issued on December 15, 1995, the RFP sought proposals for providing
clinical laboratory services at approximately 15 correctional
institutions located within BOP's South Central Region. Under the
RFP, offerors would have to have the capability to perform a great
number of laboratory tests. The RFP contemplated award of a
requirements contract for a 1-year period and contained options for
4 additional years. The procurement was conducted on the basis of
full and open competition.
The protester contends that the contracting officer should have known
that at least two responsible small business concerns were likely to
submit competitive bids. In this regard, the protester states that it
identified six small businesses that were interested in competing to
the local Small Business Administration (SBA) representative. In
addition, CardioMetrix points out that 13 small businesses requested
copies of the RFP from the contracting officer.[1] Thus, the
protester concludes that BOP was required under applicable regulations
to conduct the procurement as a 100-percent small business set-aside.
A procurement must be set aside for exclusive small business
participation when there is a reasonable expectation of receiving
offers from at least two responsible small business concerns and award
will be made at a reasonable price. Federal Acquisition Regulation
(FAR) sec. 19.502-2(b) (FAC 90-32). A contracting officer must make
reasonable efforts to ascertain whether it is likely that offers will
be received from at least two small businesses with the capabilities
to perform the work. See Espey Mfg. & Elecs. Corp., B-254738.3, Mar.
8, 1994, 94-1 CPD para. 180. An agency's determination concerning whether
to set a particular procurement aside basically involves a business
decision within the broad discretion of contracting officials, and our
review generally is limited to ascertaining whether those officials
have abused that discretion. Id.; see also FKW Inc., B-249189, Oct.
22, 1992, 92-2 CPD para. 270.
The agency reports that this is the first time it has attempted to
procure comprehensive medical laboratory services for all correctional
institutions in the region; previously, each institution procured
laboratory services for itself. Therefore, the present RFP requires
offers to perform more than 100 different laboratory tests at 15
different prisons scattered throughout Texas, Oklahoma, and Louisiana,
and the RFP estimated that more than 40,000 separate tests would be
ordered during the base year alone. According to the agency, past
procurements by the individual prisons required far fewer tests than
are required here. The agency reports that the contracting officer
conducted a market survey before concluding that it was unlikely that
two or more small businesses would make offers at reasonable prices,
and thus, properly decided to conduct a full and open competitive
procurement.
The agency further reports that, after consulting with the Health
Services Department of BOP's regional office and perusing the local
telephone directory, the contracting officer identified two potential
small business offerors. The contracting officer also obtained a list
of potential small business offerors from the SBA regional office.[2]
The contracting officer states that he attempted to contact some of
the firms on the SBA's list. Some of the firms did not return the
contracting officer's calls; others were contacted but reported that
they were unable to handle the large volume of work that BOP would
order under the contract. However, the contracting officer was able
to identify two additional potential small business offerors.
The contracting officer asked the four known small businesses several
questions concerning the required work. Among other things, the firms
were asked how much of the work they would accomplish by
subcontracting with other firms and whether their possible
subcontractors would be large or small businesses. Three of the small
businesses indicated that they would probably subcontract 75 to
100 percent of the work to large businesses. Based upon these
responses, the contracting officer identified only one small business
that would be able to comply with the subcontracting
limitation--mandating that at least 50 percent of the personnel costs
under a set-aside services contract be expended for employees of the
small business contractor--required to be included in all small
business set-aside solicitations. See Specialized Contract Servs.,
Inc., B-257321, Sept. 2, 1994, 94-2 CPD para. 90; FAR sec. 52.219-14 (FAC
90-32). Accordingly, the contracting officer concluded that use of
full and open procurement procedures was appropriate and would
encourage more small businesses to compete since they would not be
subject to the 50-percent subcontracting limitation.
We do not believe that the contracting officer abused his discretion
here. The record clearly shows that the contracting officer, in
consultation with both the SBA and BOP's own cognizant health services
department, made a good faith attempt to locate qualified small
business offerors. The record also shows that the contracting officer
queried the known small businesses to ascertain whether they might
make offers and whether they could meet the FAR's subcontracting
limitation. Furthermore, the record shows that, after CardioMetrix
filed its protest alleging that several potential small business
offerors were overlooked, the contracting officer met with the local
SBA procurement center representative and discussed his market survey
and the propriety of his determination not to set the procurement
aside. In a letter dated March 6, 1996, the SBA representative
concurred in the contracting officer's determination, stating:
"After reviewing your Market Survey and Determination and Finding
for full and open competition on the subject procurement, it is
my opinion that you and your staff have complied with Federal
Acquisition Regulation, Part 19 as pertains to small business set
aside. You did not have a reasonable expectation that you would
receive proposals from two responsible, responsive small
businesses who could perform on this procurement."
The protester's argument that the RFP should be amended and the
procurement set aside because several small businesses asked for the
RFP or were on the bidders mailing list is without legal merit. The
regulations do not require a contracting officer to amend or cancel a
solicitation after subsequently learning of interest by small
businesses where, as here, the contracting officer conducted a
reasonable investigation concerning the possibility of two or more
qualified small businesses competing. See Espey Mfg. & Elecs. Corp.,
supra. Furthermore, because small businesses routinely request to be
informed of procurements, a pre-solicitation mailing, such as a
bidders mailing list, does not necessarily reflect any expectation
that the firms will compete in a particular procurement. See
Specialized Contract Servs., Inc., supra.
The protest is denied.
Comptroller General
of the United States
1. CardioMetrix requested and received a copy of the agency's list of
potential offerors; 13 of the 19 firms on the list were designated as
small in size.
2. All firms on the SBA's list had apparently certified that they were
within standard industrial classification code 8071, medical
laboratories.