BNUMBER: B-276405; B-276405.2
DATE: June 9, 1997
TITLE: Security Consultants Group, Inc., B-276405; B-276405.2, June
9, 1997
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Matter of:Security Consultants Group, Inc.
File: B-276405; B-276405.2
Date:June 9, 1997
James H. Roberts III, Esq., Manatt, Phelps & Phillips, LLP, for the
protester.
Hector Gonzalez Sanchez, for H.G. Security System, Inc., an
intervenor.
Scarlett D. Grose, Esq., General Services Administration, and David R.
Kohler, Esq., and Timothy C. Treanor, Esq., Small Business
Administration, for the agencies.
Linda S. Lebowitz, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
In offering a requirement to the Small Business Administration (SBA)
for acceptance into its 8(a) program, the contracting agency
prejudicially failed to comply with the regulatory requirement to
provide SBA with complete and accurate information regarding the
proposed offering by not identifying the protester as an 8(a) concern
which had expressed an interest in being considered for the
acquisition.
DECISION
Security Consultants Group, Inc. (SCG) protests the failure of the
General Services Administration (GSA) to advise the Small Business
Administration (SBA) of its interest in being considered for the award
of a subcontract by SBA under its 8(a) program for the performance of
site assessments and the installation of security systems for various
GSA controlled buildings and/or facilities within Metropolitan New
York City and the states of New Jersey and New York. SCG argues that
it was prejudiced by GSA's failure to comply with the applicable
regulation governing the offering of the requirement to SBA.
We sustain the protests.
GSA's requirement was for an indefinite quantity contract with a
minimum ordering limitation of $300,000 and a maximum ordering
limitation of $3,000,000. GSA's contracting officer's offering letter
to SBA stated the following:
"To confirm our previous conversations, the above requirement has
been identified by our agency as suitable for procurement under
Section 8(a) of the Small Business Act. This is an indefinite
quantity contract with an estimated minimum of $300,000 and an
estimated maximum of $3,000,000. The contract performance will
begin March 1, 1997 and end December 31, 1997. When you [SBA]
identify a suitable 8(a) subcontractor, please have them contact
me to begin negotiations."[1]
SBA subsequently notified GSA that it accepted GSA's offering on
behalf of H.G. Security System, Inc. (HGSS), an 8(a) concern located
in Brooklyn, New York.
SCG, an 8(a) concern located in Oak Ridge, Tennessee, protests the
failure of GSA to advise SBA of the firm's interest in being
considered for the award of a subcontract under SBA's 8(a) program to
perform GSA's requirement. The record shows that before GSA even
offered the requirement to SBA, SCG met with GSA contracting personnel
and expressed its interest in performing GSA's requirement. GSA
concedes that it was aware, prior to sending its offering letter to
SBA, of SCG's interest. GSA's offering letter, however, contained no
reference to SCG.
Section 8(a) of the Small Business Act authorizes SBA to contract with
government agencies and to arrange for performance of such contracts
by awarding subcontracts to socially and economically disadvantaged
small businesses. 15 U.S.C. sec. 637(a) (1994). The Act affords SBA and
contracting agencies broad discretion in selecting procurements for
the 8(a) program. We will not consider a protest challenging a
decision to procure under the 8(a) program absent a showing of
possible bad faith on the part of government officials or that
regulations may have been violated. Bid Protest Regulations, 4 C.F.R. sec.
21.5(b)(3) (1997); Grace Indus., Inc., B-274378, Nov. 8, 1996, 96-2
CPD para. 178 at 2. Here, SCG argues that GSA prejudicially failed to
comply with the requirement at 13 C.F.R. sec. 124.308(c) to furnish SBA
with complete and accurate information regarding the proposed offering
which directly impacted SBA's selection of an 8(a) concern to perform
GSA's requirement.
In making decisions regarding 8(a) acquisitions, SBA is entitled to
rely on the contracting officer's representations regarding the
offered requirement. In this regard, SBA's regulations place the
primary responsibility on the procuring agency to submit all relevant
information necessary to SBA's decision-making process. 13 C.F.R. sec.
124.308; Comint Sys. Corp., B-274853; B-274853.2, Jan. 8, 1997, 97-1
CPD para. 14 at 3. In this case, the SBA states, and we agree, that GSA's
offering letter did not provide complete and accurate information as
required under 13 C.F.R. sec. 124.308(c).
Specifically, under 13 C.F.R. sec. 124.308(c)(14), the procuring activity
is unambiguously required to include in its offering letter to SBA,
among other things, the "[i]dentification of all 8(a) concerns which
have expressed an interest in being considered for the acquisition."
In its offering letter, GSA did not identify SCG to SBA as an 8(a)
concern which had expressed an interest in being considered for the
performance of GSA's requirement. Under these circumstances, we
conclude that GSA's offering letter failed to comply with the
requirement at 13 C.F.R. sec. 124.308(c)(14) and that as a result, GSA
effectively deprived SBA of the opportunity to make a fully informed
decision with respect to this 8(a) acquisition.[2] Comint Sys. Corp.,
supra at 4-5.
We further conclude that GSA's failure in this regard prejudiced SCG.
Our Office will not sustain a protest unless the protester
demonstrates a reasonable possibility that it was prejudiced by the
agency's actions, that is, unless the protester demonstrates that, but
for the agency's actions, it would have had a substantial chance of
receiving the award. McDonald-Bradley, B-270126, Feb. 8, 1996, 96-1
CPD para. 54 at 3; see Statistica, Inc. v. Christopher, 102 F.3d 1577,
1581 (Fed. Cir. 1996). Here, if GSA had properly notified SBA of
SCG's interest, SCG could have been awarded the contract. Thus, SCG
obviously was prejudiced by what occurred here. Accordingly, we
sustain its protests. Comint Sys. Corp., supra at 7.
In light of GSA's prejudicial failure to comply with the regulatory
requirement to provide SBA with complete and accurate information
regarding the proposed offering and in light of SBA's becoming aware
of SCG's interest through the protest process, we recommend that SBA
reopen the process of accepting GSA's requirement on behalf of an 8(a)
concern. In this regard, SBA should consider the qualifications of
both SCG and HGSS. Depending on the results of SBA's reopened
process, the contract with HGSS should be continued or terminated with
award made to SCG, as appropriate. We also recommend that SCG be
reimbursed its costs of filing and pursuing its protests, including
reasonable attorneys' fees, by GSA. Bid Protest Regulations, 4 C.F.R. sec.
21.8(d)(1) (1997). SCG should submit its certified claim for costs to
GSA within 60 days of receiving this decision. 4 C.F.R. sec. 21.8(f)(1).
The protests are sustained.
Comptroller General
of the United States
1. SBA characterizes this acquisition as an "open requirement," that
is, SBA, as opposed to the contracting agency, chooses a qualified
8(a) concern to perform the requirement. 13 C.F.R. sec. 124.308(f)
(1997). Since this procurement was for a non-construction
requirement, SBA may select any eligible, responsible 8(a) concern
nationally to perform the requirement. 13 C.F.R. sec. 124.308(f)(2).
2. GSA reports that it telephonically notified SBA of SCG's interest
prior to sending the offering letter to SBA. SBA's regulation
provides for use of the written offering letter, not telephonic
identification of interested 8(a) concerns, 13 C.F.R. sec. 124.308(c),
(d), and SBA's contract negotiator denies being telephonically
notified by GSA of SCG's specific existence and interest. Under these
circumstances, where SBA denies being orally advised by GSA of what
was required by regulation to be in writing, we cannot conclude that
SBA was aware of SCG's interest. See I.E. Levick and Assocs.,
B-214648, Dec. 26, 1984, 84-2 CPD para. 695 at 3. (GSA also reports that
on two occasions it forwarded to SBA correspondence from SCG in which
the firm, among other things, expressed its interest in performing
GSA's requirement. The record shows, however, that both of these
occasions were weeks after SBA accepted the requirement on behalf of
HGSS.)