TITLE: B-311420, DAV Prime, Inc., May 1, 2008
BNUMBER: B-311420
DATE: May 1, 2008
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B-311420, DAV Prime, Inc., May 1, 2008
Decision
Matter of: DAV Prime, Inc.
File: B-311420
Date: May 1, 2008
Brian Finley for the protester.
Elin M. Dugan, Esq., Department of Agriculture, Forest Service, for the
agency.
Cherie J. Owen, Esq., and Ralph O. White, Esq., Office of the General
Counsel, GAO participated in the preparation of the decision.
DIGEST
Protest that agency failed to restrict its solicitation to
service-disabled veteran-owned small business concerns (SDVOSBCs) is
dismissed because the law providing for SDVOSBC set-asides is permissive,
not mandatory, and does not require an agency to set aside contracts for
SDVOSBCs.
DECISION
DAV Prime, Inc., a service-disabled veteran-owned small business concern
(SDVOSBC) protests the terms of solicitation No. AG-024B-S-07-0005, issued
by the Department of Agriculture, U.S. Forest Service, for portable
latrines. DAV argues that this work should have been reserved for SDVOSB
companies. It contends a set-aside is required because the agency has
violated the Small Business Act, as amended by sect. 36 of the Veterans
Benefits Act of 2003, Pub. L. No. 108-183, 117 Stat. 2651, 2662 (2003), 15
U.S.C. sect. 657f (Supp. IV 2004), by failing to meet its stated goal of
awarding 3 percent of its annual contracts to SDVOSBCs, and by failing to
conduct a market survey to determine whether an SDVOSBC set-aside is
appropriate. Protest at 2; Response to Motion to Dismiss at 1.
We dismiss the protest because it does not establish a valid basis for
challenging the agency's action.
Section 36 of the Veterans Benefits Act of 2003 provides:
In accordance with this section, a contracting officer may award
contracts on the basis of competition restricted to [SDVOSBCs] if the
contracting officer has a reasonable expectation that not less than 2
[SDVOSBCs] will submit offers and that the award can be made at a fair
market price.
15 U.S.C. sect. 657f(b).
In our view, the language of the Act is clearly discretionary. As such, it
permits, but does not require, a contracting officer to restrict
competition to SDVOSBCs if certain conditions are satisfied.
With regard to the protester's argument that our holding in MCS Portable
Restroom Serv., B-299291, Mar. 28, 2007, 2007 CPD para. 55, requires a
different result, the protester's reliance on that case is misplaced. MCS
stands for the proposition that, although a contracting officer is not
required to undertake the analysis set forth in the Act, if he or she does
conduct such an analysis, his or her analysis must be reasonable.
In MCS, the contracting officer conducted a market survey to determine
whether the criteria of the Act were met. Id. at 1. After searching the
CCR database for the proper NAICS code and locating 28 SDVOSBCs that
potentially could perform the work, the agency sent e-mails to these firms
and received responses from two SDVOSBCs, (MCS and a Florida-based
company). Id. Two months later, the agency posted a "sources sought"
notice on FedBizOps and only one SDVOSBC (MCS) responded. Id. After
considering this market research, the contracting officer concluded that
she did not have a reasonable expectation of receiving two or more bids
from SDVOSBCs. Id. Therefore, the solicitation was posted as a small
business set-aside. Id.
MCS protested the contracting officer's conclusion, arguing that it was
not reasonable, given the results of the contracting officer's market
research. Id. at 2. The Small Business Administration (SBA) agreed that
the contracting officer's analysis of the market research was not
reasonable. Id. at 3. The SBA noted that the agency's disregard of the
Florida SDVOSBC's expression of interest (which was based upon the
assumption that the firm was no longer interested because it did not also
respond to the "sources sought" notice) was unreasonable because the firm
may not have seen the notice or it may have believed a response was
unnecessary given that it had already expressed interest. Id. at 3. After
considering the results of the contracting officer's market research and
the SBA's opinion, we held that the contracting officer's assessment of
the criteria set forth in the Act was not reasonable and we sustained the
MCS protest. Id. at 4.
Here, unlike the case cited by the protester, DAV does not claim that the
agency undertook the analysis outlined in the Act and reached an
unreasonable conclusion. Rather, protester argues that the agency violated
the Act simply because it failed to conduct a market survey. Response to
Motion to Dismiss at 1. This argument is not supported by the plain
language of the statute, nor is it supported by our holding in MCS.
Our holding here also requires us to clarify our recent decision in IBV,
Ltd., B-311244, Feb. 21, 2008, 2008 CPD para. 47. In that decision we
cited MCS for the proposition that "[p]rior to proceeding with a small
business set-aside, a procuring agency is required to make reasonable
efforts to ascertain whether an SBVOSBC set-aside is appropriate," which,
upon further reflection, we think overstates both the holding in MCS and
the requirements of the Act. Though our decision in IBV remains unchanged,
we think a proper explanation of the Act and the MCS decision is that
there is no requirement to set-aside a procurement for SDVOSBCs. That
said, when an agency undertakes an SDVOSBC set-aside analysis, the
conclusions it draws from the analysis must be reasonable.
As a result, we think DAV's protest does not include sufficient
information to establish the likelihood that the agency in this case
violated applicable procurement laws or regulations. The protest therefore
is dismissed without further action. See Bid Protest Regulations, 4 C.F.R.
sect. 21.5(f) (2007).
The protest is dismissed.
Gary L. Kepplinger
General Counsel