BNUMBER:  B-275956 
DATE: April 23, 1997 
TITLE: Matter of:Ruchman and Associates, Inc. 

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Matter of:Ruchman and Associates, Inc.

File:     B-275956

Date:April 23, 1997

Anita M. Cream, Esq., and Scott M. Heimberg, Esq., Akin, Gump, 
Strauss, Hauer & Feld, L.L.P., and Neal H. Ruchman, for the protester.
Curtis Price, Jr., for C. Price & Associates, an intervenor.
Jesse E. Lasken, Esq., National Science Foundation, for the agency.
Behn Miller, Esq., and Christine S. Melody, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Contracting officer's decision to procure complex publications 
clearinghouse requirement on an unrestricted basis, and not through a 
small business set-aside, is not an abuse of discretion where the 
market survey conducted by the agency did not support the expectation 
that small business concerns could provide the required services at a 
fair market price.

DECISION

Ruchman and Associates, Inc. (RAI) protests the decision of the 
National Science Foundation (NSF) to issue request for proposals (RFP) 
No. DAS 96041 for a publications clearinghouse on an unrestricted 
basis.  RAI contends that the solicitation should have been issued as 
a small business set-aside.

We deny the protest.

Under Federal Acquisition Regulation (FAR)  sec.  19.502-2(b) (FAC 90-44), 
a procurement with an anticipated dollar value of more than $100,000, 
such as the one at issue here, 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 that award will be made at a fair market price.  Unless such a 
determination can be made, a total small business set-aside should not 
be issued.  FKW Inc., B-249189, Oct. 22, 1992, 92-2 CPD  para.  270, at 2.  
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; 
in this regard, factors that may constitute adequate grounds for not 
setting aside a procurement include prior procurement history, nature 
of the contract, market surveys, and/or advice from the agency's 
technical specialists.  Id.  

We regard a decision whether to set aside a procurement as a matter of 
business judgment within the contracting officer's discretion; 
consequently, our review generally is limited to ascertaining whether 
that official abused his or her discretion.  CardioMetrix, B-271012, 
May 15, 1996, 96-1 CPD  para.  227, at 2.

In this case, NSF reports that after conducting an extensive market 
survey, the agency's technical specialists advised the contracting 
officer not to restrict this procurement to small businesses.  The 
contracting officer concurred in the technical specialists' 
recommendation for the following reasons.  First, the publications 
clearinghouse requirement is a first-time effort for NSF, which issues 
approximately 1.7 million publications per year.  Instead of simply 
warehousing paper publications at a government site, as is its current 
practice, NSF wants to consolidate its warehousing needs with a 
commercial bulk mail/electronic catalog system operation that will 
both disseminate publications to the public and convert the majority 
of the current paper publications to an electronic format.  NSF also 
envisions that the inventory, bulk mailing, and dissemination process 
will be managed and accomplished via an electronic, computerized 
process.  Although several small businesses--such as RAI--are capable 
of successful document storage, the NSF technical specialists 
questioned whether there were two small business concerns capable of 
actual publication "fulfillment"--an industry term used to refer to 
the sophisticated technology necessary to accomplish the electronic 
inventory, conversion, and dissemination services.  The NSF technical 
specialists also questioned whether there was a small business capable 
of managing the volume of NSF's requirement.

Because of these concerns, the NSF technical specialists conducted the 
following market survey.  First, the technical specialists contacted 
several agencies with similar clearinghouse operations involving 
comparable size and technology--the National Institutes of Health 
(NIH) and the Congressional Budget Office (CBO).  Each agency provided 
the technical specialists with a list of industry sources, one of 
which was a small business.  The NSF technical specialists contacted 
the identified small business but were told that because of the size 
of this requirement, the small business was not capable of maintaining 
the proposed clearinghouse operation.  The small business further 
advised NSF that given this procurement's technical complexity and 
size, large business concerns were probably the only viable candidates 
for the procurement; the small business recommended another large 
business to NSF for this requirement.

The NSF technical specialists also reviewed the qualifications of 
several small businesses that had requested copies of this RFP in 
response to a September 1996 Commerce Business Daily synopsis; 
consistent with the market survey results, the NSF technical 
specialists concluded that each of the identified small business 
concerns lacked the technology and expertise necessary to accomplish 
the bulk mailing and electronic conversion/dissemination processes 
required for this procurement.  In this regard, although NSF was aware 
of RAI's interest, because of past performance difficulties 
encountered with the protester on a contract involving document 
warehousing services--including significant time delays and price 
increases--the NSF technical specialists concluded that even if RAI 
could perform the required clearinghouse operation, the agency did not 
expect to receive a proposal that was reasonably priced.

Finally, the NSF technical specialists visited each of the 
clearinghouse sources identified by NIH and CBO; these site visits, 
during which the NSF technical specialists observed the actual 
clearinghouse operations, confirmed the officials' initial concerns 
that the technology and resources required for this procurement likely 
rendered large businesses the only viable competitors for the size and 
type of clearinghouse operation required here.

We see no basis to conclude that the contracting officer abused his 
discretion here.  The record clearly shows that NSF made a reasonable 
and good faith effort to investigate the small business market for 
this requirement.  The extensive market survey by NSF's technical 
specialists--the basis for the contracting officer's decision to issue 
the solicitation on an unrestricted basis--failed to locate a 
qualified small business competitor for this requirement.  In its 
comments on the agency report, RAI offered no substantive objection to 
either the agency's market survey or its conclusions regarding the 
protester's poor past performance.  Under these circumstances, given 
that the record provides a reasonable basis for the agency's 
procurement approach, we find the agency's decision to conduct this 
requirement on an unrestricted basis to be unobjectionable.  See 
Peterson Builders, Inc.; Swiftships, Inc., B-251695.2; B-251695.3, 
Apr. 22, 1993, 93-1 CPD  para.  342 (unrestricted procurement approach 
upheld where market survey failed to locate qualified small business 
for design and construction of research and development prototype 
craft); FKW Inc., supra (unrestricted procurement approach for 
procurement of large-scale operations, maintenance and support 
services upheld where market survey revealed that small business 
concerns typically did not possess large staff and high level of 
managerial oversight required by the agency).

The protest is denied.

Comptroller General
of the United States