TITLE: B-311244, IBV, Ltd., February 21, 2008
BNUMBER: B-311244
DATE: February 21, 2008
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B-311244, IBV, Ltd., February 21, 2008

   Decision

   Matter of: IBV, Ltd.

   File: B-311244

   Date: February 21, 2008

   H. Wendell Gardner for the protester.

   Maj. John G. Terra, and Col. Neil S. Whiteman, Department of the Air
   Force, for the agency.

   Paul E. Jordan, Esq., and John M. Melody, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Decision to set aside procurement for small business participation instead
   of service-disabled veteran-owned small business concerns (SDVOSBC) was
   unobjectionable where, prior to making decision, contracting officer
   concluded that agency would not receive fair market price in offers from
   SDVOSBCs and conclusion was confirmed when all SDVOSBC proposals received,
   including protester's, significantly exceeded agency's estimate and prices
   proposed by non-SDVOSBCs.

   DECISION

   IBV, Ltd. protests the Department of the Air Force's decision to issue
   request for proposals (RFP) No. FA4416-08-R-0003, for collection and
   removal of solid waste, as a total small business set-aside. IBV, a
   service-disabled veteran-owned small business concern (SDVOSBC), asserts
   that the agency should have set aside the procurement for SDVOSBCs or
   awarded the firm a contract on a sole-source basis.

   We deny the protest.

   The RFP contemplated the award of a fixed-price contract for non-hazardous
   waste refuse collection, transportation, and disposal services at Andrews
   Air Force Base, Maryland, and related sites, for a period of 8 months,
   with 4 option years. The incumbent contractor is a small business and the
   contracting officer, with the concurrence of the agency's small business
   specialist, determined to set the RFP aside for small business concerns.
   In order to enhance competition, the contracting officer decided not to
   further restrict the procurement to SDVOSBCs. Based on her knowledge of
   the market, the contracting officer was concerned that SDVOSBCs would not
   provide fair market prices. Contracting Officer's Declaration, para. 5.
   The RFP, as amended, advised prospective offerors that the annual
   estimated price range for all requirements was $3-$8 million. Prior to the
   closing time for receipt of proposals, IBV filed this protest.

   Under the SDVOSBC procurement program, a contracting officer may restrict
   competition to SDVOSBCs if he or she has a reasonable expectation that not
   fewer than two such firms will submit offers and that the award can be
   made at a fair market price. 15 U.S.C. sect. 657f(b) (Supp. IV 2004);
   Federal Acquisition Regulation (FAR) sect. 19.1405(a), (b). Prior to
   proceeding with a small business set-aside, a procuring agency is required
   to make reasonable efforts to ascertain whether an SDVOSBC set-aside is
   appropriate. MCS Portable Restroom Serv., B-299291, Mar. 28, 2007, 2007
   CPD para. 55 at 5. Although the use of any particular method of assessing
   the availability of firms for a set-aside is not required, 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 to set aside, or not to set aside, a
   procurement. National Linen Serv., B-285458, Aug. 22, 2000, 2000 CPD
   para. 138 at 2. Generally, our Office regards such a determination as a
   matter of business judgment that we will not disturb absent a clear
   showing that it has been abused. Id.

   IBV asserts that the contracting officer did not make a reasonable effort
   to ascertain whether an SDVOSBC set-aside was suitable. This argument is
   without merit. While the record shows that at least two SDVOSBC firms were
   available and interested in competing on this requirement, this is only
   the first of two considerations that go into a set-aside decision. In
   addition, the contracting officer must have a reasonable expectation that
   award will be made at a fair market price. 15 U.S.C. sect. 657f(b); FAR
   sect. 19.1405(a), (b). Here, as noted above, the contracting officer did
   not set the requirement aside because she did not expect to receive fair
   market prices from SDVOSBCs, and there is nothing in the record to
   demonstrate that her expectations were unreasonable. In this regard, while
   IBV disagrees with her decision, it has not provided any evidence that it
   and at least one other SDVOSBC would or could have provided fair market
   prices. IBV's mere disagreement with the agency's assessment does not
   demonstrate that the agency's judgment was unreasonable. Bahan Dennis
   Inc., B-249496.3, Mar. 3, 1994, 94-1 CPD para. 184 at 5.

   Moreover, even if we agreed with IBV that the set-aside determination was
   not adequately supported at the time it was made, we would not object to
   the determination under the circumstances here. In this regard, while the
   agency received multiple proposals from SDVOSBCs, the contracting
   officer's concern that they would not propose fair market pricing was
   confirmed by the pricing of those proposals; all of the SDVOSBC proposals
   received were priced at more than double the independent government
   estimate, and all exceeded the RFP's estimated price range. Further, IBV's
   price was the highest of all proposals received, including those of the
   other SDVOSBCs, and was more than double the prices of the three
   lowest-priced non-SDVOSBC small business proposals. [1] Agency Report at
   30. Under these circumstances, the agency's set-aside decision was
   reasonable. See The Atlantic Co. of Am., Inc., B-293974, July 1, 2004,
   2004 CPD para. 182 at 2 (GAO will consider proposals actually received in
   determining whether set-aside decision was reasonable (HUBZone
   set-aside)); York Int'l Corp., B-244748, Sept. 30, 1991, 91-2 CPD
   para. 282 at 7 (small business set-aside); Litton Electron Devices,
   B-225012, Feb. 13, 1987, 87-1 CPD para. 164 at 2-3 (small business
   set-aside).

   We reach the same conclusion with regard to IBV's assertion that the
   agency should have considered awarding it a contract on a sole-source
   basis. While an agency may make a sole-source award to an SDVOSBC, four
   conditions must be met: only one SDVOSBC can satisfy the requirement;
   where, as here, the requirement falls under a nonmanufacturing NAICS code,
   the anticipated award price will not exceed $3 million; the SDVOSBC has
   been determined responsible with respect to performance; and award can be
   made at a fair and reasonable price. FAR sect. 19.406. Three of the four
   provisions are not met here. The record shows that there are multiple
   SDVOSBCs available to compete; the anticipated award exceeds the
   $3 million limit; and, as discussed above, award could not be made to an
   SDVOSBC at a fair market price. Accordingly, the contracting officer
   reasonably did not consider IBV for a sole-source award.

   In its comments on the agency report, IBV complains that its price was
   higher than necessary due to RFP requirements and because the agency did
   not provide certain information. Specifically, IBV notes that there is a
   potential for an increase of $160,000 in dump fees before the agency would
   consider an equitable adjustment; there is no provision for fuel cost
   increases; offerors were required to purchase $250,000 in new containers;
   and there was no disclosure of the frequency of most pickups or the number
   of trucks and personnel under the current contract. Matters such as this
   that concern alleged improprieties on the face of a solicitation must be
   filed prior to the deadline for receipt of offers. Bid Protest
   Regulations, 4 C.F.R. sect. 21.2(a)(1) (2007). Thus, IBV's protest on
   these grounds is untimely.

   The protest is denied.

   Gary L. Kepplinger
   General Counsel

   ------------------------

   [1] IBV proceeded with its protest pro se, and therefore did not have an
   attorney who could obtain access to nonpublic information pursuant to the
   terms of a protective order. Accordingly, our discussion of some aspects
   of the procurement is necessarily general in nature in order to avoid
   reference to nonpublic information. Our conclusions, however, are based on
   our review of the entire record, including nonpublic information.