TITLE: B-299241, Shirlington Limousine & Transport, Inc., March 13, 2007
BNUMBER: B-299241
DATE: March 13, 2007
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B-299241, Shirlington Limousine & Transport, Inc., March 13, 2007
Decision
Matter of: Shirlington Limousine & Transport, Inc.
File: B-299241
Date: March 13, 2007
David J. Taylor, Esq., Spriggs & Hollingsworth, for the protester.
Rose J. Anderson, Esq., Department of Homeland Security, and Lara H.
Hudson, Esq., Small Business Administration, for the agencies.
Kenneth Kilgour, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protest that solicitation requirements that secured storage facility
contain an electronic access control system, that the contractor supply
sedans, and that all shuttle buses be equipped with wheel chair lifts are
unduly restrictive of competition is denied where the record establishes
that requirement was reasonably designed to ensure that the government's
needs would be met.
2. Protest challenging agency decision not to set aside procurement for
Historically Underutilized Business Zone (HUBZone) small businesses is
denied where the decision was based on sufficient facts to establish
reasonableness of agency's conclusion that there was not a reasonable
expectation that offers would be received from two or more HUBZone
business concerns.
DECISION
Shirlington Limousine & Transport, Inc. protests the terms of request for
proposals (RFP) No. HSHQDC-07-R-00009, issued by the Department of
Homeland Security (DHS) for agency-wide transportation services.
Shirlington asserts that the solicitation is unduly restrictive of
competition because it requires the secured storage facility to be
accessed by an electronic access control system, that the contractor
supply sedans, and that all shuttle buses be equipped with wheelchair
lifts. Shirlington also asserts that the solicitation, issued as a small
business set-aside, instead should have been set aside for Historically
Underutilized Business Zone (HUBZone) small business concerns.
We deny the protest.
BACKGROUND
In June 2006, DHS decided to revise the way in which it procured
transportation services with the goal of improving the quality of service
and promoting the more efficient use of resources. The existing DHS
transportation contract has a total value of $21.8 million over 5 years,
and the agency estimate for the new solicitation is $41 million over 5
years. Agency Report (AR), Tab 11, Affidavit of Director of the Office of
Procurement Operations (OPO), at 2. Under the existing contract,
Shirlington operates shuttle buses that transport agency employees between
various agency offices and provides executive sedan service to transport
authorized staff to and from any location in the Washington, DC
metropolitan area. Shirlington provides the shuttle buses, and the
government provides the sedans. From the record, it appears that the
higher cost of the contract stems primarily from the shift of
responsibility for the sedans and the storage facility from the government
to the contractor.
On June 23, the agency issued a request for information (RFI) on the
FedBizOpps website to determine the level of interest in a DHS-wide
transportation services contract. The RFI stated that the "[c]ontractor is
responsible for maintaining a cleared facility for parking the sedans and
buses." AR, Tab 3, RFI, at 1-2. Interested firms were asked to submit a
capability package that identified the following: core services; corporate
experience, including relevant contracts; type of business; current
security clearance level for overnight parking of vehicles; and drivers
with suitability determinations.
The agency received responses from 11 small businesses, all of which were
located in Maryland, Virginia, or Washington, DC, and four of which
claimed to be HUBZone-certified. On October 10, the agency issued an
amendment to the RFI informing interested parties that the agency would
require the contractor to have a Defense Industrial Security Clearance
Office (DISCO)-cleared facility at the time of contract award. AR, Tab 5,
RFP amend. 1, at 1. That amendment advised offerors that it was for
"informational purposes ONLY" and a "response to [the amendment was] NOT
required or expected." Id.
According to the agency, it conducted an internal review of the available
potential offerors for the requirement to determine whether it should be
set aside for either HUBZone firms or small businesses. The OPO Director
and the Director of the Office of Small and Disadvantaged Business
Utilization (OSDBU) reviewed the history of the two previous
transportation contracts at DHS, noting that the upcoming solicitation
would place a significantly greater burden on the contractor than did the
prior two contracts: previously, the agency did not require security
clearances for storage facilities because the sedans were stored at agency
facilities; the contractor-supplied dispatching service was housed at the
agency; and the agency provided all sedans. The OSDBU Director
characterized the competition under the first of the previous agency
transportation contracts as "very limited," with only one HUBZone firm,
the incumbent contractor Shirlington, submitting an offer.[1] AR, Tab 10,
Affidavit of OSDBU Director, at 1. Under the second contract, two HUBZone
firms submitted proposals, one of which was rated marginal and could not
be considered for award. The Directors concluded that the agency failed to
receive proposals from two or more qualified HUBZone businesses in either
of the two previous agency transportation solicitations, both of which
contained considerably less stringent requirements than the proposed
solicitation.
The agency states that these two Directors also evaluated the four
responses to the RFI that were submitted by HUBZone firms, using
information provided by each of the firms, previous experience with two of
the firms, and additional research conducted on the Consolidated
Contractor Registration (CCR) database. One firm was the incumbent and
protester, Shirlington. Another was the HUBZone firm that had submitted a
marginal proposal under a previous transportation solicitation. The third
firm, the agency notes, indicated "that its experience was limited to
shuttle/bus services as a subcontractor to commercial activities and it
did not appear to have experience providing executive sedan services." Id.
at 2. The fourth firm was determined not to be a HUBZone-certified firm.
Of the three actual HUBZone firms, only one had performed a contract that
was similar to the existing requirement, and none had performed a contract
of the scope of the new agency-wide contract that was contemplated.
The OSDBU and OPO Directors concluded that the increased scope and breadth
of the requirement rendered the contract too difficult and
capital-intensive to be performed by a HUBZone firm. In the Directors'
estimation, if the solicitation was set aside for HUBZone firms, there
would be a high degree of risk to the government that the agency would not
receive adequate proposals. AR, Tab 11, Affidavit of OPO Director, at 3.
The two Directors then concluded, based on the prior procurements and the
responses to the RFI, that small businesses were interested and could
fulfill the requirements. As noted above, the RFP subsequently was issued
as a small business set-aside on November 20.
ANALYSIS
The solicitation contained the following electronic access control
requirement:
The vehicle storage facility gate access will have a minimum of [two][2]
electronic access control keypads. . . . The electronic access control
keypad will create a history for every vehicle's entry and departure
that can be accessed any time in the future. Electronic access control
can also be set up strategically to create security zones within the
vehicle storage area. . . . The electronic access control system will
have all doors integrated into one system. . . . Program of the access
control system will be done through a computer based system.
AR, Tab 6, RFP attach. 4, at 1. The solicitation also required that closed
circuit television (CCTV) cameras be mounted throughout the vehicle
storage area "to provide a record of all activities, persons, and
operators inside and outside the facility." Id. at 2.
The protester asserts that the solicitation requirement that the secured
storage facility be accessed by an electronic access control system is
unduly restrictive of competition, "cannot be deemed necessary" to
security, and is "superfluous." Protest at 6.
The Competition in Contracting Act of 1984 requires that agencies specify
their needs and solicit offers in a manner designed to achieve full and
open competition, so that all responsible sources are permitted to
compete; solicitations may include restrictive requirements only to the
extent they are necessary to satisfy the agency's legitimate needs. 41
U.S.C. sect. 253a(a)(1)(A), (2)(B) (2000). The determination of a
contracting agency's needs and the best method for accommodating them is a
matter primarily within the agency's discretion. Tucson Mobilephone, Inc.,
B- 250389, Jan. 29, 1993, 93-1 CPD para. 79 at 2, recon. denied,
B-250389.2, June 21, 1993, 93-1 CPD para. 472. Where a requirement relates
to human safety and security, an agency has the discretion to define
solicitation requirements to achieve not just reasonable results, but the
highest level of reliability and effectiveness. Caswell Int'l Corp.,
B-278103, Dec. 29, 1997, 98-1 CPD para. 6 at 2.
Where a protester challenges a specification as unduly restrictive, the
procuring agency has the responsibility of establishing that the
specification is reasonably necessary to meet its needs. The adequacy of
the agency's justification is ascertained through examining whether the
agency's explanation is reasonable, that is, whether the explanation can
withstand logical scrutiny. Chadwick-Helmuth Co., Inc., B-279621.2, Aug.
17, 1998, 98-2 CPD para. 44 at 3.
The language of the solicitation, quoted above, identifies several
advantages inherent in an electronic access control system. An electronic
access control system creates a history of every vehicle's entry and exit
from the garage, has the potential to create security zones within the
storage area, and has the ability to have all garage doors integrated into
one system and to have access programmed through a computer-based system.
According to the agency, DHS's Office of Security, which has the
responsibility to review and approve all solicitations, provided the
specifications for the securing of the vehicles. AR, Tab 11, Affidavit of
OPO Director, at 2. The Chief of the agency's Physical Security Division
stated that the solicitation requirements "are drawn from recommended
minimum security standards and security best practices for Federal
facilities." AR, Tab 11, attach. 1, Memorandum from Chief, Physical
Security Division, to CO, Jan. 3, 2007. The Chief states that an
"electronic access control with an intrusion detection capability is
required to compensate for the inherent vulnerabilities in physical lock
and key control systems." Id. Electronic access control systems, the Chief
asserts, enable the system operator to "track and control access,
immediately suspend access, and maintain an audit capability for
inspection or investigative purposes." Id.
The protester disagrees that the solicitation requirement at issue is
reasonable. Shirlington argues that the advantages of the electronic
access control system cannot be achieved because there is no solicitation
requirement that it be monitored full-time. However, Shirlington does not
explain why an automated system requires 24-hour monitoring. The protester
also argues that the required CCTV cameras alone are sufficient. While the
CCTV cameras may be a partially redundant system, the record shows that
they record valuable data the electronic access system does not, and
likewise the electronic access system supplies information the CCTV
cameras are unable to provide. In the interest of human safety and
security, the agency has specified a system that produces not just
reasonable results, but higher levels of safety and efficiency. Although
Shirlington disagrees with the agency's judgment with respect to its
needs, it has not shown the requirement to be unreasonable. Kastle Sys.,
Inc., B-231990, Oct. 31, 1988, 88-2 CPD para. 415 at 8. Consequently, we
have no basis upon which to object to the agency's inclusion of the
electronic access control system requirement in the RFP.
In its protest, Shirlington notes two additional "flaws" in the
solicitation: that the contractor must supply the sedans, and that all
shuttle buses to be supplied by the contractor must comply with the
Americans with Disabilities Act (ADA), 42 U.S.C. sect. 12101 et seq.
(1994). Protest at 3. With respect to the latter argument, we note first
that the solicitation does not require compliance with the ADA, but rather
requires that the shuttle buses accommodate wheelchairs and that
"reasonable accommodation for official transportation in the Washington DC
area is made for [passengers requiring assistance] on a case-by-case
basis." AR, Tab 8, RFP amend. 2, at 6. The agency defends the requirement
that all shuttle buses have wheelchair lifts by noting that there may be
federal employees and other authorized riders with disabilities who do not
have specified routes. Moreover, the shuttle bus services under the
solicitation are made available without authorized users having to reserve
the service in advance. We think it is reasonable for the agency to
structure the solicitation to make shuttle bus service available at all
times to all authorized riders with disabilities.
With respect to the requirement that the contractor provide all the
required vehicles (shuttle buses with wheelchair lifts and sedans), the
protester asserts that since doing so will be very expensive for a
contractor, the government should supply the vehicles instead. Without
more, the allegation that a requirement is costly is not sufficient to
show that the requirement is unduly restrictive of competition. Supreme
Edgelight Devices, Inc., B-261667, Sept. 28, 1995, 95-2 CPD para. 153 at
3; see Madison Servs., Inc., B-278962, Apr. 17, 1998, 98-1 CPD para. 113
at 2-3 (solicitation may impose substantial risk on the contractor and
minimal administrative burden on the agency).
The protester also argues that the government could save money by leasing
the sedans and supplying them to the contractor, rather than having the
contractor supply the sedans. The general rule that the determination of
the government's needs and the best method of accommodating those needs is
primarily the concern of the contracting agency is no less applicable when
the government is deciding who should own the equipment required for
contract performance. See Crown Laundry and Cleaners, Inc., B-213796,
B-213810, May 9, 1984, 84-1 CPD para. 516 at 2-3. The agency argues that
it has structured the solicitation to obtain operational efficiencies, one
of which is to be free of the responsibility of procuring and owning the
sedans. The protester has not shown the requirement that the contractor
supply the sedans to be unreasonable.
The protester also asserts that the agency unreasonably determined not to
set the procurement aside for HUBZone small business concerns.
Acquisitions that exceed the simplified acquisition threshold must be set
aside for HUBZone small businesses if the agency makes two determinations,
only the first of which is at issue here: that there is a reasonable
expectation that offers will be received from two or more HUBZone small
business concerns, and that award will be made at a fair market price.
Federal Acquisition Regulation (FAR) sect. 19.1305(a), (b). Generally, our
Office regards a determination to set aside a procurement as a matter of
business judgment, within the agency's discretion. See York Int'l Corp.,
B-244748, Sept. 30, 1991, 91-2 CPD para. 282 at 6. An agency must make
reasonable efforts to ascertain whether it will receive offers from at
least two HUBZone small business concerns with the capability to perform
the work, and we will review a protest to determine whether the agency has
done so. Global Solutions Network, Inc., B-292568, Oct. 3, 2003, 2003 CPD
para. 174 at 3. While the use of any particular method of assessing the
availability of HUBZone small businesses is not required, and measures
such as prior procurement history, market surveys, and advice from the
agency's small business specialist may all constitute adequate grounds for
a contracting officer's decision not to set aside a procurement, American
Imaging Servs., Inc., B-246124.2, Feb. 13, 1992, 92-1 CPD para. 188 at 3,
the assessment must be based on sufficient facts so as to establish its
reasonableness. Rochester Optical Mfg. Co., B-292247; B-292247.2, Aug. 6,
2003, 2003 CPD para. 138 at 5.
Here, the record indicates that the agency employed several methods to
ascertain whether to set aside the procurement for HUBZone firms. The
agency's key small business official, the OSDBU Director, was integral to
the agency's decision-making process. That official, in cooperation with
the OPO Director, considered the responses the agency received to two
similar, although substantially smaller in scope, solicitations, noting
that in neither case did the agency receive two acceptable proposals from
HUBZone firms. The agency gauged the interest from possible HUBZone firms
by publishing an RFI and considered the responses to that RFI, discussed
in detail above. The agency then made a determination, based on a review
of the information provided by all of these sources, that it was unlikely
to receive adequate proposals from two or more HUBZone firms. Given the
record, including the protester's own apparent concerns with the
difficulty that it would have in performing this contract, we find that
the agency's decision not to set aside the procurement for HUBZone firms
was reasonable.[3]
We solicited the views of the SBA on whether the agency should have set
aside the procurement for HUBZone firms. The SBA concluded that the agency
should have done so, arguing that the agency offered no support for its
assertion that the four HUBZone firms that responded to the RFI "lacked
capacity."[4] SBA Comments at 11. On the contrary, the capability package
requested by the RFI contained a wealth of information on each of the
interested firms. After reviewing that data and information from other
sources, the agency articulated clearly why the three actual HUBZone
firms, in its business judgment, would not be able to successfully
complete the contract.
The SBA also argues that if the agency had conducted a search on CCR,
using the two applicable North American Industry Classification System
codes, the agency would have identified 33 HUBZone firms that might have
been potential offerors. As a preliminary matter, the actual number of
respondents is 31, because 2 firms appear in the results of both searches.
In any event, SBA's argument is not persuasive; the raw number of HubZone
firms generated by a CCR search reveals little about the capability of
those firms to perform as required under the RFP. A cursory review of the
list shows that many lack experience in the services called for; for
example, one listed firm is described as a construction contractor located
in Florida. Also, although all of the respondents to the RFI were local
firms and it appears from the record that the contract would be of primary
interest to local firms, only 5 of the 31 firms identified in the SBA's
search are local, and 3 of them had in fact responded to the RFI. Of the
two local firms not already identified by the agency, one delivers
products to government agencies and the other offers no narrative of its
capabilities. SBA simply points to the number of firms identified in the
CCR search as evidence of likely HubZone competition without in any way
examining whether--for the reasons set out above, among others--the firms
are viable competitors under the RFP here.
Finally, the protester asserts that the agency improperly assessed the
capability of the firms who responded to the RFI to provide the required
DISCO-cleared storage facility because the agency first informed potential
offerors of that requirement in an amendment to the RFI but discouraged
HUBZone firms from responding to the amendment. Comments at 7. The SBA
shares this concern. The agency specifically requested in the capability
package that interested firms describe their current security clearance
level for overnight parking of vehicles, thus putting interested firms on
notice that they should fully disclose the extent of their security
clearances. In fact, one of the responders specifically indicated that it
could provide a DISCO facility. Under these circumstances, we see no basis
to question the agency's assessment of the firms' capabilities on this
ground.
The protest is denied.
Gary L. Kepplinger
General Counsel
------------------------
[1] While Shirlington is the incumbent on the current contract, it is not
performing the expanded scope of work that would be required under the new
solicitation.
[2] The solicitation omits the minimum number of keypads required. The
context in which the omission appears makes it clear that the minimum
number required is two.
[3] As part of this protest ground, the protester alleges that the OSDBU
director failed to properly discharge his duties as required by the FAR.
Because we conclude that the agency's decision not to set aside this
procurement for HUBZone firms was reasonable and consistent with the FAR,
we need not address this allegation.
[4] In a related argument, the SBA asserts that the assessments of
potential HUBZone offerors performed by the agency amounted to
determinations of responsibility that should have been referred to the
SBA. SBA Comments at 7. Once again, a determination that a particular
procurement is to be set aside is basically a business judgment within the
broad discretion of the contracting officer. See York Int'l Corp., supra.
In making this determination, the contracting officer need not make
determinations tantamount to affirmative determinations of responsibility,
but rather need only make an informed business judgment that there is a
reasonable expectation of receiving acceptably priced offers from eligible
business concerns that are capable of performing the contract. See Admiral
Towing and Barge Co., B-291849, B-291849.2, Mar. 6, 2003, 2003 CPD para.
164 at 3. The record shows that is precisely the analysis DHS conducted.