BNUMBER:  B-277241.20; B-277241.21 
DATE:  July 1, 1998
TITLE: Aalco Forwarding, Inc., et al., B-277241.20; B-277241.21,
July 1, 1998
**********************************************************************

Matter of:Aalco Forwarding, Inc., et al.

File:     B-277241.20; B-277241.21

Date:July 1, 1998

Alan F. Wohlstetter, Esq., and Stanley I. Goldman, Esq., Denning & 
Wohlstetter, and Thomas M. Auchincloss, Jr., Esq., and Brian L. 
Troiano, Esq., Rea, Cross & Auchincloss, for the protesters.
G. Jerry Shaw, Esq., and Susan E. Shaw, Esq., Shaw, Bransford & 
O'Rourke, for Cendant Mobility Services Corporation, an intervenor.
Maj. Jonathan C. Guden and Ramon Morales, Esq., Department of the 
Army, for the agency.
David R. Kohler, Esq., and Timothy C. Treanor, Esq., for the U.S. 
Small Business Administration.
Adam Vodraska, Esq., and James A. Spangenberg, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

In a solicitation implementing a pilot program to reengineer the 
Department of Defense's current interstate and international program 
for the shipment and storage of the personal property of military 
service members and civilian employees, the contracting officer's 
decision to set aside 17 of 53 traffic channels in their entirety for 
exclusive small business participation is unobjectionable.

DECISION

Aalco Forwarding, Inc. and 98 other self-certified small business 
concerns protest the sufficiency of the small business set-aside in 
request for proposals (RFP) No. DAMT01-97-R-3001, issued by the 
Military Traffic Management Command (MTMC), Department of the Army, 
for a pilot program reengineering the Department of Defense's (DOD) 
current interstate and international program for shipping and storing 
the personal property of its military service members and civilian 
employees.[1] 

We deny the protests.

These protests arose from the contracting agency's implementation of 
our recommendation in Aalco Forwarding, Inc., et al., B-277241.16, 
Mar. 11, 1998, 98-1 CPD  para.  75, in which we sustained protests by most 
of these protesters of the solicitation's partial small business 
set-aside.[2]

The RFP, issued March 14, 1997, calls for the contractor(s) to provide 
all personnel, equipment, materials, supervision, and other items 
necessary to provide transportation and transportation-related 
services for 50 percent of the eligible DOD and U.S. Coast Guard 
sponsored personal property shipments from North Carolina, South 
Carolina, and Florida, to any or all of 13 destination regions in the 
continental United States and/or any or all of 5 destination regions 
in Europe.  RFP schedule at 2; RFP performance work statement (PWS) at 
3, 7, and attachments 1 and 2.  Award will be made to one or more 
contractors for each origin state to destination region "traffic 
channel."  RFP at 36.  There are 53 traffic channels included in this 
RFP.  RFP schedule; PWS attachments 1 and 2.

The RFP provides that offers may be submitted on any or all traffic 
channels from any one or all of the origin states to any one or all 
destination regions, or any combination thereof.  PWS at 3 and 
attachment 2.  Offerors are to list in their proposals for each 
traffic channel for which they submit an offer the daily capacity (in 
pounds) that they are committing to each of the various personal 
property shipping offices in an origin state for the base year and 
each option year.  RFP attachment 3; PWS at 19.  The committed daily 
capacities will be used by MTMC to determine the number of contracts 
to be awarded for each traffic channel and to obligate the contractors 
to provide requested services up to their committed daily capacities.  
PWS at 19.  Although a minimum committed daily capacity is not 
specified, the RFP states that committed daily capacities must be 
reasonable, based on historical tonnage data.  Id.  An attachment to 
the RFP provides historical monthly/yearly tonnage data and numbers of 
shipments for each traffic channel (from each personal property 
shipping office) for fiscal years 1994, 1995, and 1996.  RFP 
attachment 4.

In an amendment issued May 14, MTMC set aside 12 percent of the 
traffic volume of 27 designated high traffic volume channels for 
exclusive small business participation.  According to the amendment, 
based on historical data, the 27 channels selected for the set-aside 
represented approximately 85 percent of the total traffic moving under 
the pilot program, and the 12 percent of traffic volume of the 27 
set-aside channels represented approximately 10 percent of the total 
estimated dollar value of the contracts to be let under the pilot 
program.

Following the contracting officer's decision to partially set aside 
the procurement, the Small Business Administration (SBA) Procurement 
Center Representative (PCR) recommended to the contracting officer 
that the solicitation's partial set-aside be increased to 50 percent 
of the total contract value, given that small business concerns 
constitute much of the moving industry's carrier-agent market.  The 
contracting officer rejected the PCR's recommendation.  In accordance 
with FAR  sec.  19.505, the PCR appealed the contracting officer's decision 
to the head of the contracting activity, MTMC's commander, who upheld 
the contracting officer's earlier rejection of the PCR's 
recommendation.  The SBA then appealed to the Secretary of the Army, 
whose designee, the Director of the Army's Office of Small and 
Disadvantaged Business Utilization, denied the SBA's appeal.

Two firms, not parties here, protested to our Office that the 
solicitation should be set aside in its entirety for exclusive small 
business participation.  Numerous other protesters, including most of 
the protesters here, protested to our Office that the partial 
set-aside was not an economic production run or reasonable lot, as 
required, and was otherwise deficient.

In Aalco Forwarding, Inc., et al., B-277241.16, supra, at 7, we found 
unobjectionable the contracting officer's determination that a total 
set-aside of the entire pilot program was inappropriate.  We explained 
that, notwithstanding the considerable interest expressed by small 
businesses in the solicitation, the contracting officer concluded that 
the expressions of interest did not warrant a reasonable expectation 
that two or more interested small business concerns would have the 
capacity to service all the traffic in each channel, particularly the 
higher traffic volume channels, given the significant new requirements 
imposed by the pilot program on contractors.  Id.  Because the 
contracting officer did not find that small businesses were capable of 
performing the requirements of any one traffic channel, she could not 
determine that small businesses were capable of performing the total 
solicitation requirements, which encompass all traffic channels.  Id.

However, we found that the partial set-aside in the RFP did not ensure 
an economic production run or reasonable lot of shipments for small 
business concerns, as required by FAR  sec.  19.502-3(b), because it did 
not meaningfully consider the impact of the relatively small number of 
shipments available on many of the channels under the set-aside or the 
significant obligations, such as committed daily capacity, imposed on 
small business contractors by the solicitation.  We recommended that:

     the agency reexamine its partial set-aside determination under 
     the criteria of FAR  sec.  19.502-3.  In this regard, the agency 
     should first estimate what is an economic production run or 
     reasonable lot of shipments, considering the committed daily 
     capacity obligations and the other significant obligations 
     imposed on contractors by the solicitation.  The agency should 
     then decide if and how the requirement can reasonably be divided 
     into such economic production runs or reasonable lots; for 
     example, the agency could consider entire channels, or a higher 
     proportion of shipments on set-aside channels, as a basis for the 
     partial set-aside.  (It may be that some of the current higher 
     volume set-aside channels could be shown to be an economic 
     production run or reasonable lot.)  Assuming the pilot program is 
     apportionable into a set-aside and a non-set-aside portion, each 
     of which is an economic production run or reasonable lot, the 
     agency should determine whether one or more small business 
     concerns are expected to have the competence and capacity to 
     satisfy the set-aside portion at a reasonable price.  

Aalco Forwarding, Inc., et al., B-277241.16, supra, at 15-16 (footnote 
omitted).

In response to our recommendation, MTMC determined that 260 shipments 
per year per channel constitutes an economic production run or 
reasonable lot of shipments, based on a prior analysis of the shipping 
volume of the channels which concluded that the "break-even point for 
sufficient volume" was 260 shipments or more in a channel (an average 
of a shipment per day based on a 5-day workweek).  The reasonable lot 
having been established, MTMC interpreted our recommendation as 
permitting it to award either entire channels for small business 
set-asides or set-aside percentages within channels, so long as the 
set-aside portion contained a reasonable lot.  According to the 
agency, our Office's guidance rendered "unworkable" the approach it 
had previously adopted of setting aside a fixed percentage of 
estimated shipments in designated channels because, to constitute a 
reasonable lot, the percentages set aside would have to differ from 
channel to channel, even within one origin state and "[t]his would 
result in a dramatic, and unacceptable, increase in the complexity of 
the required record keeping at the Personal Property Shipping Office . 
. . level."[3]

MTMC instead identified each channel in the pilot program with an 
estimated shipment volume of more than 260 shipments as a reasonable 
lot, and consequently, a candidate for a set-aside.[4]  Given previous 
concerns expressed by industry about the ability of small business 
concerns to handle high traffic volumes, MTMC determined that setting 
aside channels with more than 520 estimated shipments per year 
represented an unacceptably high risk to the government that small 
businesses would not be capable of satisfying all those channels' 
traffic.  The contracting officer states that this assessment was also 
based on the fact that some small business offerors appeared to have 
overextended their capabilities by submitting offers on numerous 
channels with significantly high total committed daily capacities.  As 
an example, she points out that many of the small business offerors 
submitted proposals for all channels in the solicitation, apparently 
in anticipation of receiving awards on fewer channels than proposed, 
and that this is a strategy used by many carriers in the current 
personal property program; MTMC believes offerors' continued use of 
this strategy under the current solicitation evidences a 
misunderstanding of the pilot program.  This, coupled with the 
inherent risks associated with carrier affiliations that may render 
some of the offerors ineligible for award, provided what the 
contracting officer considered too great a level of risk to the 
government to allow the highest volume channels to be appropriate for 
a total set aside.  

MTMC therefore selected for the set-aside the channels with estimated 
shipments per year ranging between 260 and 520.  MTMC determined that 
there were 17 such channels based on fiscal year 1995 shipping data, 
which it considered the most complete information available.  The 
agency then reviewed the proposals that had been submitted by 
self-certified small business offerors on the identified channels, and 
concluded there was sufficient interest from qualified and capable 
small businesses, who offered enough capacity to satisfy the expected 
number of shipments in these channels.  MTMC considered the 
performance and financial capability of the small business offerors 
and any affiliations they may have with large businesses or each 
other, and concluded that the level of risk to the government in 
setting aside these 17 channels was acceptable.  MTMC also determined 
that the prices previously submitted by small business offerors were 
fair and reasonable on these channels, and concluded that most of the 
offers submitted by small businesses indicated that the concerns have 
the technical competence and productive capacity to satisfy the 
proposed set-aside channels at a fair market price.

Accordingly, MTMC issued amendment No. 9 on April 3, 1998, which, 
among other things, eliminated the previous partial set-aside and 
designated 17 channels (15 domestic, 2 international) as 100-percent 
small business set-asides.[5]  According to the amendment: 

     These channels represent one hundred percent (100%) of the 
     traffic volume of each channel, and approximately thirty-six 
     percent (36%) of the total estimated contract value (i.e., 
     dollars, based on historical data).  The 17 channels selected 
     represent approximately thirty-six percent (36%) of the total 
     traffic based on historical data.[6]

Offerors were allowed to revise their existing proposals, and other 
interested vendors could submit initial proposals if they had not 
already done so, by the
April 28 due date established by the amendment.

The protesters contend that MTMC has failed to establish that all of 
the 17 set-aside channels provide sufficient numbers of shipments to 
be considered economic production runs or reasonable lots for each 
small business contract awardee.  In this regard, the protesters 
allege that in setting aside these channels, the agency failed to 
consider the prospect of multiple awards per channel, the requirement 
for committed daily capacity, and the possible award of more than one 
channel per contractor.  The protesters argue that establishing the 
overall set-aside at
36 percent of the total traffic is not based on any measure of small 
business capability and does not maximize small business capacity as 
required.  Further, in contending that the agency's selection of the 
17 channels is devoid of rational basis, the protesters point out that 
the percentage of shipments set aside varies significantly depending 
on the origin state, that the agency's set-aside criteria ignored the 
operational requirements confronting small businesses where the 
destination regions are distant from the origin state(s),[7] and that 
in some instances the channels selected for the set-aside would change 
if MTMC used the most recent historical shipping data.  The protesters 
also claim that MTMC failed to take into account the impact of the 
expansion of the Navy's Service Member Arranged Move program on one of 
the set-aside channels as well as the impact of nonrecurring mass 
moves that assertedly inflated the numbers of shipments used in 
establishing the set-asides.

Because the 17 channels specified in amendment No. 9 were each set 
aside in their entirety, MTMC has effectively reversed its earlier 
determination not to make total set-asides of entire channels.  As 
small business offerors on the RFP can submit offers on any or all 
traffic channels, or any combination thereof, and need not submit 
proposals on the non-set-aside channels in order to submit proposals 
on the set-aside channels, we view each set-aside channel as a total 
set-aside within the context of the set-aside portion of the overall 
procurement.[8]  See FAR  sec.  19.502;
38 Comp. Gen. 744, 746 (1959) (total set-aside of the entire 
requirements on only one item of a multiple item procurement does not 
make the set-aside action on the one item a partial set-aside, but is 
properly classified as a total set-aside, where the items are 
independent of each other); Midland Transp., Co., B-201319, Aug. 4, 
1981, 81-2 CPD  para.  89 at 3, aff'd, B-201319.2, Dec. 11, 1981, 81-2 CPD  para.  
459 (solicitation encompassing several items, some of which were set 
aside in their entirety for small business and others which were not, 
was not "partial small business set-aside," which is "term of art" 
describing the situation where a severable portion or quantity of the 
same item or class of items is set aside exclusively for small 
business and the other portion is not).[9]  

Since the channels set aside constitute total set-asides, MTMC is not 
required to demonstrate that these channels constitute economic 
production runs or reasonable lots of shipments, as contended by the 
protesters, because the requirements of FAR  sec.  19.502-3, establishing 
the criteria for partial set-asides, do not apply to total set-aside 
determinations.  See FAR  sec.  19.502-2.  Accordingly, we need not 
consider the various arguments described above advanced by the 
protesters as to why the set-aside channels do not properly constitute 
economic production runs or reasonable lots of shipments or why the 
selection of those channels was not rationally based under that 
standard.

While some protesters appear to suggest that at least some of the 17 
set-aside channels should not have been set aside, inasmuch as they 
may not be economic production runs or reasonable lots sufficient to 
support small business concerns, the contracting officer concluded 
that she had a reasonable expectation of receiving offers from at 
least two responsible small business concerns on the 17 channels 
considered for total set-asides and that awards will be made at fair 
market prices, as required for a total set-aside.  See FAR  sec.  
19.502-2(b); PR Newswire, B-279216, Apr. 23, 1998, 98-1 CPD  para.  118 at 
2.  

Specifically, MTMC reviewed the various proposals submitted by 
self-certified small business concerns for the earlier partial 
set-aside, and concluded that there was sufficient small business 
interest from responsible and capable concerns on each of the channels 
being considered for a total set-aside.  MTMC determined, that, 
cumulatively, small businesses offered enough committed daily capacity 
to satisfy the expected traffic volume of the proposed set-aside 
channels and that the vast majority of the small business offerors 
demonstrated that they have the performance and financial capability 
to perform the solicitation requirements at a satisfactory or better 
level in at least one of the channels in which they submitted offers.  
MTMC also considered the price analysis previously performed on the 
initial offers, and concluded that the pricing in the proposals of 
small business offerors for the channels was fair and reasonable and 
that there was no reason to expect that this analysis would be 
different for the revised set-aside channels.  

Consequently, MTMC's set-aside analysis satisfied all criteria for a 
total set-aside under FAR  sec.  19.502-2(b), and the contracting officer's 
resulting determination to set aside the 17 selected channels in their 
entirety for exclusive small business participation is 
unobjectionable.  While this was not the only way MTMC could have 
revised the former partial set-aside in accordance with our 
recommendation, we do not view it as inconsistent with our 
recommendation.

As to the remaining 36 channels in the pilot program, the protesters 
did not protest MTMC's decision not to set aside the 26 channels with 
shipping volumes lower than the set-aside channels.[10]  

With regard to the 10 channels with higher traffic volumes than the 
set-aside channels, we continue to find unobjectionable the agency's 
position first taken in its initial set-aside determination that there 
was no reasonable expectation of receiving offers from at least two 
responsible small business concerns on these channels, given the 
agency's concerns about small business capabilities to handle the 
pilot program's new requirements, particularly on these channels with 
the highest traffic volumes, as described in our earlier decision, 
Aalco Forwarding, Inc., et al., B-277241.16, supra, at 6-7.  Moreover, 
the agency supplemented its previous analysis by reviewing the offers 
submitted by small business concerns on this RFP, and concluded that 
there was an unacceptable risk in setting aside the highest volume 
channels, considering the very high committed daily capacities offered 
by some of these proposals over the various channels and the inherent 
risks associated with carrier affiliations that may render some of the 
offerors ineligible for award.  The protesters have not shown the 
agency's analysis lacked a reasonable basis.  Particularly in light of 
the experimental nature of this program, we find the agency's decision 
not to set aside the 10 highest volume traffic channels for exclusive 
small business participation to be reasonable.[11]

Some of the protesters, as well as SBA, contend that in issuing this 
solicitation, MTMC failed to comply with the procedures of the Small 
Business Act as recently amended by the Small Business Reauthorization 
Act of 1997 to avoid unnecessary and unjustified bundling of contract 
requirements that precludes small business participation in 
procurements as prime contractors.  See Pub. L. No. 105-135,  sec.  
411-417, 111 Stat. 2592, 2617-20 (to be codified, in relevant part, at 
15 U.S.C.  sec.  631(j), 632(o), and 644(e)).  The protesters and SBA 
argue that these recent amendments to the Small Business Act require 
the application of a stricter standard for the justification of 
bundling contract requirements than was applied in our earlier 
decision, Aalco Forwarding Inc., et al., B-277241.12; B-277241.13, 
supra, in which we denied their previous protests that the RFP 
impermissibly restricts competition by bundling certain contract 
requirements to the detriment of small business concerns.[12]  
According to the protesters, as the solicitation was superseded in its 
entirety after the effective date of the Small Business 
Reauthorization Act of 1997, the legislation's stricter standard for 
justifying bundling now applies, and MTMC has failed to apply this 
standard to justify the solicitation's bundling of contract 
requirements. 

We view this contention as essentially an untimely request for 
reconsideration of our earlier decision on the bundling issue.  The 
Small Business Reauthorization Act of 1997, enacted December 2, 1997, 
was effective October 1, 1997.  Pub. L. No. 105-135,  sec.  3, 111 Stat. 
2592, 2593.  The protesters could have requested our consideration of 
their view that this legislation applies to this solicitation during 
the pendency of the earlier protests or at least requested 
reconsideration of the resulting decision on the basis of the 
legislation's applicability to the solicitation within 10 days of the 
issuance of our decision.  They did not, and we dismiss this 
contention as untimely.  4 C.F.R.  sec.  21.14(c); see Logitek, 
Inc.--Recon., B-241639.4, Aug. 30, 1991, 91-2 CPD  para.  221.[13]

The protests are denied.

Comptroller General
of the United States

1. This decision is made under our express option procedures, 4 C.F.R.  sec.  
21.10 (1998).  The protesters are:  Aalco Forwarding, Inc.; AAAA 
Forwarding, Inc.; A Advantage Forwarders, Inc.; Air Van Lines 
International, Inc.; Allstates Worldwide Movers; Aloha Worldwide 
Forwarders, Inc.; Alumni International, Inc.; American Heritage 
International Forwarding, Inc.; American Shipping, Inc.; American 
World Forwarders, Inc.; Apollo Forwarders, Inc.; Arnold International 
Movers, Inc.; Astron Forwarding Company; BINL Incorporated; Burnham 
Service Company, Inc.; Cavalier Forwarding, Inc.; Classic Forwarding, 
Inc.; Davidson Forwarding Co.; Deseret Forwarding International, Inc.; 
Foremost Forwarders, Inc.; Great American
Forwarders, Inc.; Hi-Line Forwarders, Inc.; International Services, 
Inc.; Island Forwarding, Inc.; Katy Van Lines, Inc.; Lincoln Moving & 
Storage; Miller Forwarding, Inc.; Northwest Consolidators; Ocean Air 
International, Inc.; Senate Forwarding, Inc.; Sentinel International 
Forwarding, Inc.; Shoreline International, Inc.; Stevens Forwarders, 
Inc.; T.R.A.C.E. International, Inc.; Von Der Ahe International, Inc.; 
Wold International, Inc.; Zenith Forwarders, Inc.; Acorn International 
Forwarding Company; AAA Systems, Inc.; A.C.E. International 
Forwarders; Apex Forwarding Company, Inc.; Armstrong International, 
Inc.; Art International Forwarding, Inc.; Coast Transfer Company, 
Inc.; Crystal Forwarding, Inc.; CTC Forwarding Company, Inc.; Diamond 
Forwarding, Inc.; Dyer International, Inc.; Harbour Forwarding 
Company, Inc.; HC&D Forwarders International, Inc.; Jag International, 
Inc.; The Kenderes Group, Inc.; Pearl Forwarding, Inc.; Rainier 
Overseas, Inc.; Rivers Forwarding, Inc.; Ryans's World; Sequoia 
Forwarding Company, Inc.; A-1 Relocation, Inc. d/b/a A-1 Movers of 
America, Inc.; A-1 Moving & Storage, Inc.; Able Forwarders, Inc.; 
American Van Services, Inc.; A. Arnold & Son Transfer & Storage Co., 
Inc.; Art and Paul Moving & Storage; Associated Forwarding, Inc.; 
Associated Storage and Van, Inc.; Carlyle Van Lines, Inc.; Carrier 
Transport International, Inc.; Coastal Moving Co., Inc.; Conrad Group, 
Inc.; Davidson Transfer & Storage Co., Inc.; Denoyer Brothers Moving & 
Storage Co.; Door To Door Moving & Storage Co.; Exhibit Transport, 
Inc.; Ferriss Warehouse & Storage Co., Inc.; Fogarty Van Lines, Inc.; 
Horne Storage Co., Inc.; Lift Forwarders, Inc.; Lynn Moving and 
Storage, Inc.; A.D. McMullen, Inc.; Mid-State Moving & Storage Inc.; 
Movers Unlimited, Inc.; Nilson Van & Storage; Northwest Consolidators, 
Inc.; Ogden Transfer & Storage Co.; OK Transfer & Storage, Inc.; Pan 
American Van Lines, Inc.; Riverbend Moving & Storage, Inc.; Royal 
Forwarding, Inc.; Sells Service, Inc.; South Hills Movers, Inc.; 
Stanley's Transfer Co., Inc.; Starck Van Lines, Inc.; StarTrans 
International, Inc.; Stearns Forwarders, Inc.; Stearns Moving & 
Storage of Kokomo, Inc.; Terminal Storage Co., Inc.; Von Der Ahe Van 
Lines, Inc.; Wainwright Transfer Co. of Fayetteville, Inc.; and 
Weathers Bros. Transfer Co.-NC.

2. This procurement was also the subject of prior decisions in Aalco 
Forwarding, Inc., et al., B-277241.8, B-277241.9, Oct. 21, 1997, 97-2 
CPD  para.  110, which denied various protests primarily against the 
acquisition of these services under the Federal Acquisition Regulation 
(FAR) part 12 commercial item procedures; in Aalco Forwarding Inc., et 
al., B-277241.12, B-277241.13, Dec. 29, 1997, 97-2 CPD  para.  175, which 
denied protests that the RFP impermissibly bundled contract 
requirements to the detriment of small business concerns; and in Aalco 
Forwarding Inc., et al., B-277241.15, Mar. 11, 1998, 98-1 CPD  para.  87, 
which denied protests of the RFP's stated contract minimum and 
maximums, price evaluation scheme, and Service Contract Act 
provisions.  These decisions contain much of the background for this 
procurement, which will not be repeated here.

3. MTMC's concern reflected the fact that 260 shipments might be 100 
percent of the shipments for one channel, 60 percent for another, and 
30 percent for yet another, depending on the total estimated shipments 
in the given channel.

4. MTMC did not regard any of the 26 channels with fewer than 260 
shipments per year as constituting an economic production run or 
reasonable lot of shipments.

5. The 17 channels were among the 27 channels previously partially set 
aside.

6. This set-aside approach was agreed to by the SBA procurement center 
representative (PCR), the contracting officer, and the agency's small 
business specialist.  See FAR  sec.  19.501(b).  The PCR later retracted 
his concurrence and, on his behalf, another PCR recommended, among 
other things, that MTMC "structure a new solicitation to include 
meaningful set aside provisions which will maximize small business 
opportunities in a resultant contract."  Because, as SBA concedes, 
this later recommendation was untimely made under FAR  sec.  19.402(c)(2), 
the contracting officer takes the position that the set-aside 
determination is not subject to the appeals procedures of FAR  sec.  19.505 
through which the earlier set-aside had been appealed, as described 
above.

7. Several protesters provided statements detailing the particular 
operational difficulties they faced, e.g., consolidating shipments to 
the distant destination regions on some set-aside channels.

8. This is consistent with the view of SBA and some of the protesters 
that each channel should be considered a separate acquisition for 
set-aside purposes.

9. Unlike Midland, this RFP's inclusion of partial set-aside 
instructions did not render the solicitation's basis for award 
"confusing and ambiguous" because it is apparent from reading the RFP 
as a whole that the submission of a proposal for the non-set-aside 
channels was not a necessary prerequisite to offering on the set-aside 
channels.  See Defense Group Inc., B-257366, B-257366.2, Sept. 26, 
1994, 94-2 CPD  para.  118 at 11-12.

10. It would seem that providing service on some of these low shipment 
volume channels may be feasible to a contractor only in conjunction 
with the award of other set-aside or non-set-aside channels, 
especially those from the same origin state utilizing the same agents 
and other resources.

11. In their comments filed after receipt of the agency report on the 
protests, some protesters suggest that the 10 highest volume channels 
could be the subject of a partial set-aside.  This contention was not 
made in, nor was it within the scope of, the initial protests.  Since 
this supplemental contention was first raised after the closing time 
for receipt of proposals, it is untimely and will not be considered.  
4 C.F.R.  sec.  21.2(a)(1) (1998); see A-1 Postage Meters and Shipping 
Sys., B-266219, Feb. 7, 1996, 96-1 CPD  para.  47 at 3 n. 1.  Although the 
SBA also now takes the position that the non-set-aside channels should 
have been considered for partial set-asides, it did not timely object 
to the contracting officer's set-aside determination, and we will not 
consider the matter further.  

12. We held that the challenged solicitation requirements that each 
contractor serve all points in a traffic channel and that each 
contractor provide both household goods and unaccompanied baggage 
transportation services do not constitute improper bundling of 
requirements where they reasonably reflected the agency's needs and 
are necessary to implement the pilot program's goals of reducing 
administrative burdens on the agency and improving the reliability and 
quality of service.  Id. at 6-8.  Although not mentioned in that 
decision, we were cognizant of these amendments to the Small Business 
Act, but found them inapplicable because the procurement strategy for 
the solicitation had been established before the amendments were 
enacted.

13. Although some protesters continue to object to the RFP's 
requirement that offerors commit to daily capacity at each personal 
property shipping office in an origin state, we previously found the 
solicitation's requirement for committed daily capacity to be 
reasonable.  Aalco Forwarding, Inc., et al., B-277241.8, B-277241.9, 
supra, at 20.