Protest challenging agency’s decision to set aside procurement for service-disabled, veteran-owned small businesses (SDVOSB) is denied. The protester argued the agency had not properly assessed whether SDVOSBs were capable of performing the requirements. GAO, however, reasoned that when making a set aside decision, an agency need not make a responsibility determination. The set aside decision fell within the discretion of the agency’s sound business judgment.
The Defense Logistics Agency (DLA) issued an RFQ to holders of the FSS contract for financial management services, seeking audit services. The RFQ was set aside for SVOSBs. DLA had decided to set the procurement aside after conducting market research and identifying at least four SDVOSBs capable of performing the contract.
KPMG filed a protest challenging the set aside decision. KPMG claimed the agency's market research was flawed because it failed to reflect the complexities of the agency’s requirements. GAO, however, reasoned that there is no required method for assessing the availability of SDVOSBs capable of performing the requirements. In making a set-aside decision, agencies need not make responsibility determination. They need only make an informed business judgment that there is a reasonable expectation of receiving acceptably priced offers from small businesses. Here, DLA appropriately exercised its business judgment.
KPMG also contended there were not enough SDVOSBs with the cumulative capacity to support DLA’s requirements. But GAO opined that agencies are not required to consider the cumulative capacity of prospective vendors in making a set-aside decision. Again, agencies only need to exercise informed business judgment. While KPMG may have disagreed with the agency’s judgment, disagreement is not enough to sustain a protest.
KPMG is represented by Dominique L. Casimir, MIchael J. Montalbano, and Samanta Barot of Blank Rome LLP. The agency is represented by David A. Evers of the Defense Logistics Agency. GAO attorney Young H. Cho and Christina Sklarew participated in the preparation of the decision.
GAO - KPMG LLP