How Many Unacceptable SDVOSB Proposals Must an Agency Receive Before It Can Nix the Set-Aside Decision and Hold an Unrestricted Competition?

The agency tried, with two different solicitations, to procure its requirements from SDVOSBs. But it didn’t receive acceptable proposals from SDVOSBs, so the agency issued a new solicitation on an unrestricted basis. The protester alleged the decision to open up the procurement was unreasonable. GAO found that two failed set-asides were enough. Given that SDVOSBs could not submit acceptable proposals, it would’ve been unreasonable for the agency to not open up the procurement.

Tech62, Inc., GAO B-420883, B-420883.2

Background

The Department of Veterans Affairs needed radiation oncology services. The VA conducted market research and determined that it had a reasonable expectation of receiving two or more quotations from SDVOSBs. Accordingly, the agency issued a solicitation for the oncology services set aside for SDVOSBs. Six vendors submitted quotations, but only one was acceptable. The VA canceled the solicitation because the only acceptable vendor couldn’t get liability insurance.

After conducting additional market research, the VA posted a new solicitation, which was issued as a small business set-aside with a tiered preference for SDVOSBs. The VA received three quotations, all from SDVOSBs. None of the quotations were acceptable. The VA canceled the solicitation again. 

Based on the unsuccessful procurement history, the VA issued a new solicitation as an unrestricted procurement. Tech62, an SDVOSB, which had submitted quotations in the previous two procurements, filed a protest, challenging the agency’s decision to open up the competition. 

Analysis

Unrestricted Procurement

Tech62 argued that the VA’s market research and reliance on the prior solicitation efforts did not support the decision to open up the procurement. GAO found this argument meritless. An agency may base a decision to set-aside or not aside a procurement on market surveys and prior procurement history. The agency tried repeatedly to procure its requirements from small businesses but didn’t receive acceptable proposals. Indeed, in the absence of any awardable proposals form SDVOSBs, it would have been unreasonable for the agency to keep setting aside the procurement.

Ambiguous Provision

Tech62 also argued that the solicitation contained ambiguous terms that prevented offerors from competing intelligently. The solicitation required offerors to provide a therapeutic medical physicist with three years of continuous experience and five years experience with certain procedures and equipment. Tech62 contended that it was not clear whether this position needed three years or five years of experience.

But GAO didn’t find this requirement confusing. The solicitation simply required the position to meet two distinct requirements: (1) three years of continuous experience obtained in the last five years, and (2) five years of experience with procedures and equipment without any requirement that the experience be recent.

Tech62 is represented by Jonathan D. Perrone and Timothy J. Turner of Whitcomb Selinsky, P.C. The agency is represented by Deborah K. Morrell of the Department of Veterans Affairs. GAO attorneys Uri K. Yoo and Alexander O. Levine participated in the preparation of the decision.

–Case summary by Craig LaChance, Senior Editor