Protest that the agency unreasonably refused to extend the deadline for submitting proposals to allow more time for the protester to become a verified SDVOSB is denied, where the agency publicized its intention to issue the solicitation as a set-aside nearly a year before the RFP was published and where it was the protester’s delay in forming a JV and seeking SBA approval of a mentor-protégé agreement that resulted in its failure to become verified by the deadline for proposals. A separate protest challenging the agency’s decision to set aside the procurement—filed by one member of the JV—is also denied, where the agency’s market research found that the Rule of Two could be met, and where the protester’s argument that it could not was belied by its own submission of a proposal.
HealthRev LLC and DLH Solutions Inc. protested the terms of a service-disabled veteran-owned small business set-aside issued by the Department of Veterans Affairs, arguing that the RFP unreasonably requires submission of proposals by a date that effectively precludes it from competing for the requirement. DLH separately argued that the agency unreasonably set aside the requirement for SDVOSBs.
The agency received thirteen proposals, including one submitted by HealthRev, a joint venture comprised of a verified SDVOSB concern named e-Revs Supply Chain LLC, and DLH, a large business and the current incumbent for the agency’s requirements.
HealthRev as a whole did not challenge VA’s decision to set aside the acquisition for SDVOSBs, but protested the agency’s refusal to extend the deadline for submitting proposals, maintaining that the agency did not allow an adequate amount of time for it to become a verified SDVOSB joint venture. Individually, DLH argued VA unreasonably set aside the acquisition for award to an SDVOSB, maintaining that there is no basis for the agency’s conclusion that there were at least two SDVOSBs that can perform the requirement at a fair and reasonable price.
GAO found that HealthRev applied for recognition as a qualifying mentor-protégé JV under SBA’s Mentor-Protégé program on June 6, and received the SBA’s approval of the joint venture on July 13. At the time it submitted its protest, HealthRev had not yet applied for verification of its joint venture by VA. HealthRev argued VA unreasonably declined to extend the deadline for submitting proposals beyond July 23. According to the protester, the short time between the announcement of the RFP on May 25 and the deadline for proposals did not allow it enough time to become a verified SDVOSB in VA’s Vendor Information Pages database, as required by the RFP.
HealthRev maintained that it first learned the agency would solicit the requirement as a total SDVOSB set-aside on May 25. The protester also noted that VA’s website for verifying its status as an eligible SDVOSB was not available for a large portion of that time period. HealthRev argued it would have been reasonable for the agency to extend the deadline for proposals to allow it to become certified.
However, GAO found these arguments without merit. GAO noted the agency began its market research in October 2016 and held a virtual industry day in June 2017, during which both JV partners participated. VA explained that the entire purpose of the industry event was to present information about VA’s plan to acquire the requirement as a single SDVOSB contract award and to allow SBA to provide information about establishing teaming and other types of relationships, and obtaining approval of mentor-protégé relationships.
Therefore, GAO found both offerors knew of VA’s intent to pursue an SDVOSB set aside no later than June 2017. The agency also published a pre-solicitation notice on April 30, 2018, outlining its plans further. However, HealthRev did not begin taking action to establish its JV or seek SBA’s approval until June 6, 2018. GAO rejected HealthRev’s complaint about the unavailability of VA’s verification website, because the down periods occurred before HealthRev’s JV was approved by VA and therefore could not have affected its ability to become verified. Overall, GAO concluded that HealthRev’s poor planning, not VA’s website or its refusal to extend the proposal deadline, led to the protester’s ineligibility for award.
Separately, JV member DLH argued VA acted unreasonably in setting the acquisition aside for SDVOSB concerns. DLH argued the agency had no expectation of receiving proposals from at least two SDVOSBs and that even if it had, it would not receive proposals at fair and reasonable prices.
However, GAO found VA’s market research had identified five SDVOSBs capable of meeting the requirements and that adequate competition would allow the agency to make award at a fair and reasonable price. In fact, at least 11 of the 13 proposals submitted to the agency came from eligible SDVOSBs. Because DLH had no idea which firms had submitted its proposals, it protest generally amounted to speculation. Further, GAO noted that DLH’s speculation is inconsistent with its actions, as its JV had submitted a proposal that it clearly believed would meet the agency’s requirements at a fair and reasonable price.
The protesters are represented by Richard J. Conway, Michael J. Slattery, and Ioana Cristei of Blank Rome LLP. The government is represented by David W. Altieri and Donald C. Mobly, Department of Veterans Affairs. GAO attorneys Scott H. Riback and Tania Calhoun participated in the preparation of the decision.