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.