BNUMBER:  B-271079.6
DATE:  August 12, 1996
TITLE:  Resource Applications, Inc.

**********************************************************************

Matter of:Resource Applications, Inc.

File:     B-271079.6

Date:August 12, 1996

Jacob B. Pompan, Esq., and Gerald H. Werfel, Esq., Pompan, Ruffner & 
Werfel, for the protester.
J. Michael Slocum, Esq., Slocum, Boddie & Murry, for RAO Enterprises, 
Inc. d/b/a Integrated Laboratory Systems, an intervenor.
Anthony G. Beyer, Esq., Environmental Protection Agency, for the 
agency.
Mary G. Curcio, Esq., David A. Ashen, Esq.,  and John M. Melody, Esq., 
Office of the General Counsel, GAO, participated in the preparation of 
the decision.

DIGEST

Procuring agency properly proceeded with award under small business 
set-aside procurement without providing generally required pre-award 
notice to unsuccessful offerors where agency made reasonable urgency 
determination, an exception under which pre-award notice is not 
required; although Small Business Administration (pursuant to a timely 
size protest) subsequently determined that awardee is other than 
small, and this size determination applies to current procurement, the 
contract need not be terminated where there is no other offeror 
eligible for award and the agency continues to have an urgent need for 
the services.

DECISION

Resource Applications, Inc. (RAI) protests the award of a contract to 
RAO Enterprises, Inc. d/b/a Integrated Laboratory Systems (RAO), under 
request for proposals (RFP) No. D500055R1, issued by the Environmental 
Protection Agency (EPA) for performance of Environmental Service 
Assistance Team (ESAT) support services for various EPA programs.

We deny the protest.

Two offerors, RAI and RAO, responded to the solicitation.  RAI's 
proposal was eliminated from the competitive range after initial 
proposals were evaluated based on a number of serious proposal 
deficiencies that led the agency to conclude that RAI's proposal could 
be made acceptable only if it was substantially rewritten.  On January 
30, 1996, the EPA executed a written determination, pursuant to 
Federal Acquisition Regulation (FAR)  sec.  15.1002(b)(2), that urgency 
necessitated award to RAO without advance notice to RAI; EPA made 
award to RAO on January 31.  After being notified of the award on 
February 1, RAI protested to our Office that its proposal was 
improperly eliminated from the competitive range.  We denied the 
protest.  Resource Applications, Inc., B-271079; B-271079.2, May 20, 
1996, 96-1 CPD  para.  244.  RAI also submitted a timely size protest,  
arguing that as the result of a joint venture agreement with a large 
business, RAO did not qualify as a small business eligible for award.  
On March 4, based on RAO's failure to provide requested information, 
the Small Business Administration's (SBA) regional office ruled that 
RAO was not a small business for the procurement.  EPA has declined to 
terminate RAO's contract.  

RAI challenges aspects of the agency's urgency determination, 
questions the award to RAO, and maintains that the contract should be 
terminated.

A procuring agency may properly award a contract under a small 
business set-aside without providing pre-award notice, where it 
reasonably determines that the urgency of the requirement necessitates 
doing so.  FAR  sec.  15.1002(b)(2).  Here, the agency made a reasonable 
urgency determination and the award therefore was proper.

EPA's written urgency determination stated that award had to be made 
before February 1, the date that the prior contract expired, due to 
the time sensitive nature of many of the tasks to be performed.[1]  It 
stated that it is imperative that no break in service occur because of 
the following tasks:  maintaining cultures for toxicity testing, which 
must be checked on a daily basis; sample analysis, including analysis 
of some samples with 14-day holding times, which, if exceeded, would 
require EPA to resample or disregard the data; and data review, used 
to assess the impact of certain conditions on human health, which must 
be completed in 2 days.

EPA's report in response to RAI's protest further explains the 
perceived urgency.  EPA reports that RAO has been directed to perform 
a number of urgently required tasks, including hazardous waste 
characteristic testing on cultured biological testing organisms, which 
cultures are used in on-going testing which is sequential in nature 
and must be performed continuously and on a daily basis.  Any 
disruption would require the agency to return to the hazardous waste 
site to collect new samples, resulting in additional cost and delay to 
the government's hazardous waste clean up activities.  The agency also 
issued a work order to support a project dealing with contaminated 
private drinking water wells.  These various task orders were issued 
with short deadlines (from a few days to a few weeks). 

RAI does not challenge the agency's findings with respect to urgency, 
except the agency's reliance on health-related concerns.  In this 
regard, the urgency determination states that the contractor must 
begin performance of the data reviews, which have a 20-day turnaround 
time, since health-related decisions await the results of the reviews.  
RAI challenges the agency's reference to health-related concerns in 
the determination on the basis that because the agency first 
elaborated on the nature of the health-related concerns in its report 
in response to the protest, such concerns could only have been an 
afterthought.    

We do not agree that health-related concerns were not adequately 
expressed in the urgency determination; the cited statement shows that 
health-related concerns were the reason for the data reviews and the 
20-day turnaround time.  Further, although the health-related concerns 
were only discussed at length in the response to the protest, when the 
determination was prepared the agency had no reason to detail the 
health-related concerns; this level of detail only became necessary 
when the agency was required to respond to RAI's challenge of the 
determination.  In any case, we also view as a legitimate concern the 
agency's desire to have a contractor continue monitoring performance 
on previously taken samples in order to avoid extra expense and 
delay.[2] 

RAI also argues that the agency should have adopted other available 
alternatives to awarding the contract to RAO without notice to RAI due 
to urgency--EPA, for example, could have extended the incumbent's 
contract.  The FAR, however, specifically authorizes agencies to award 
a contract without providing pre-award notice where, as here, it 
determines that urgency exists.  Thus, the agency was not required to 
delay the award and extend a contract that was due to expire. 

We conclude that the award without prior notice to RAI was proper.

EPA takes the position that since the award was proper, and since 
RAI's challenge to RAO's size status was not filed until after the 
award had been made, SBA's determination that RAO is other than a 
small business applies to future procurements only.  We disagree.  
Under SBA's regulations, as interpreted by that agency, a size status 
protest on a negotiated procurement received within 5 business days 
after the protester receives notification of the identity of the 
awardee is timely, regardless of whether award has been made, and 
therefore applies to the procurement in question.  13 C.F.R.  sec.  
121.1603 (1995) (now 13 C.F.R.  sec.  121.1004 (1996)).  As held by SBA in 
its size determination, since RAI's size status protest was filed 
within 5 days after it received notice that RAO was the awardee, the 
size status protest was timely and applies to this procurement.[3]  
See Eagle Design and Management, Inc., B-239833 et al., Sept. 28, 
1990, 90-2 CPD  para.  259.  

As noted by EPA, our Office has not always recommended termination 
where the procuring agency, on the basis of a proper urgency 
determination, proceeds with award under a small business set-aside 
procurement without providing the generally required pre-award notice 
to unsuccessful offerors, and SBA subsequently determines that the 
awardee is other than small.  See, e.g., Conversational Voice 
Technologies Corp., B-224255, Feb. 17, 1987, 87-1 CPD  para.  169.  Although 
such an SBA determination pursuant to a timely size protest applies to 
the procurement in question, and thus in order to give effect to the 
Small Business Act termination of the awardee's contract is warranted 
where feasible, see Digital Imaging Technical Educ. Ctr., Inc., 
B-257590, Oct. 21, 1994, 94-2 CPD  para.  148, ordinarily termination will 
not be feasible where the urgency continues.  See Solon Automated 
Servs., Inc., B-198670, Nov. 18, 1980, 80-2 CPD  para.  365.  In this 
regard, as a general matter, termination is not a practicable remedy 
where there is an urgent need for the goods or services being procured 
and a change in contractor would significantly delay performance.  See 
Van Ben Indus., Inc. et al.--Recon., B-235431.4 et al., Jan. 29, 1990, 
90-1 CPD  para.  118; Science Applications Int'l Corp.; Department of the 
Navy--Request for Recon., 71 Comp. Gen. 481 (1992), 92-2 CPD  para.  73; 
Recommendation Concerning Defense Supply Agency Contract No. 
DSA100-76-C-1280, 56 Comp. Gen. 296 (1977), 77-1 CPD  para.  58.  Where, 
however, it appears that the goods or services in question are no 
longer urgently needed, the procuring agency generally should 
terminate the contract awarded to the large business.  See, e.g., 
Ideal Servs., Inc.; JL Assocs., Inc., B-238927.2 et al., Oct. 26, 
1990, 90-2 CPD  para.  335 (where SBA determines that no small business 
offers were received under a small business set-aside, agency should 
resolicit on an unrestricted basis rather than reinstate award to 
large business).

Here, EPA maintains that the urgency cited in its determination to 
proceed with award without providing pre-award notice to RAI justifies 
not terminating RAO's contract.  In this regard, the record 
establishes that EPA has a continuing urgent need for the contractor 
to perform environmental testing and analysis relating to hazardous 
wastes and the contamination of drinking water; this work includes 
maintaining biological samples which, to remain viable, must be 
checked on a daily basis, and on-going testing which is sequential in 
nature and must be performed continuously.  According to the agency, 
any disruption to this work would result in significant additional 
cost and delay to the government's cleanup activities and could 
prolong the risk to human health from contaminants.  Further, at the 
time of award and at the time of SBA's decision (and currently), RAO 
was the only competitive range offeror; as discussed, RAI's proposal 
properly was eliminated from the competitive range on the basis that 
it would require a substantial rewrite in order to become acceptable.  
Given EPA's continued urgent requirement for ESAT support services and 
the need to avoid any disruption to this work, such as that attendant 
upon a change in contractors, and the fact that RAO is the only 
competitive range offeror, we believe that the agency could reasonably 
find that termination of RAO's contract was not feasible.  See Van Ben 
Indus., Inc., et al.--Recon., supra.

However, we note that the contract awarded to RAO was for a base 
period and four 1-year option periods.  Given that the agency's 
urgency determination applies to its immediate needs, and given that 
RAO ultimately was determined to be other than a small business and 
thus ineligible for award under the small business set-aside, it would 
be inappropriate for the agency to exercise the options in RAO's 
contract.  See generally Ricoh Corp., 68 Comp. Gen. 531 (1989), 89-2 
CPD  para.  3. 

The protest is denied.[4]

Comptroller General
of the United States

1. The contract called for collection and analysis of chemical and 
biological test samples, reviewing test data to assess quality and 
completeness, and providing logistical and administrative support for 
field, analytical and quality assurance activities.

2. RAI also argues that EPA could have given notice of the intended 
awardee in December, when it first knew that RAO was the only 
competitive range offeror.  However, there was no requirement that the 
agency provide such notice.  Moreover, while RAO was the only 
competitive range offeror on December 15, it was not until January 30, 
after two rounds of discussions regarding cost and technical issues 
and the submission by RAO of two best and final offers (BAFO), that 
RAO was actually selected and approved by the source selection 
official for award.

3. EPA, contends that the SBA did not comply with the 10-day period of 
the FAR 19.302 and that its size determination, therefore, had no 
application, citing Systems Research & Applications Corp.; Infotec  
Dev., Inc., B-270708, et al., Apr. 15, 1996, 96-1 CPD  para.  186.  The 
record is not clear on this point, and we need not resolve it in light 
of our conclusion below.

4. RAI generally argues that EPA acted in bad faith in order to assure 
award to RAO without having to deal with a protest or other 
interference.  RAI asserts that this position is supported by EPA's 
decision to award the contract to RAO without providing pre-award 
contract notice, its failure to provide RAI with immediate notice that 
it had been eliminated from the competitive range, and its failure to 
provide RAI with notice of the status of its offer, despite RAI's 
requests for this information.  However, to show bad faith there must 
be a showing that the agency intended to harm the protester.  Complere 
Inc., B-257946, Nov. 23, 1994, 94-2 CPD  para.  207.  RAI's arguments do not 
meet this burden.  The award without notice was proper, as discussed, 
and there simply is no evidence that the other actions complained of 
were motivated by an agency intent to harm RAI.