Protest challenging agency’s evaluation of the protester’s eligibility for award under the Stafford Act is denied, where the CO reasonably concluded that the protester had only recently established temporary offices within a disaster-affected area and did not have a permanent presence nor derive at least half of its income from the area during the normal course of its business.
Falken USVI LLC protested the Federal Emergency Management Agency’s award of a contract for security guard services at various U.S. Virgin Island locations to Ranger American of the VI Inc., arguing that FEMA failed to reasonably evaluate quotations in relation to their eligibility for award under the Robert T. Stafford Disaster Relief and Emergency Assistance Act.
After a major disaster declaration was issued for the Virgin Islands after Hurricane Maria, FEMA exercised its authority under the Stafford Act to begin offering assistance to the area, including the requirement for armed security guards in contention. Under the Stafford Act, FEMA is obligated to set aside work for local businesses residing in or primarily doing business in the affected areas. In this regard, FEMA conducted an analysis to determine whether offerors for the procurement resided in the area affected by the hurricane, and concluded that Falken dd not meet the criteria.
Falken challenged this determination. While its quotation stated that Falken Industries LLC is located in Virginia, it also noted the firm as offices in St. Croix and St. Thomas and therefore asserted that it is based within the Virgin Islands. Falken also specified that it would hire all guards from within the set-aside area.
However, the CO concluded that Falken did not have a main office in the set-aside area that generated at least half of the offeror’s gross revenues and employed at least half of the offeror’s permanent employees. While Falken had two operating offices in the region, both had been recently established. The CO also noted that Falken’s licenses were not issued until October 2017 after the company’s establishment in the U.S. Virgin Islands on October 13, 2017. The CO also found that Falken’s local business relationships were only recently established and that Falken had not demonstrated that at least half its income was derived from the set-aside area. Moreover, most of this revenue came from a FEMA contract awarded in February 2018. Based on these findings, the CO concluded that Falken was a long-term US-based company that had established a temporary, post-disaster presence in the Virgin Islands.
In contrast, the CO found that Ranger filed its Articles of Incorporation in 1993, which were certified by the Lieutenant Government for the Virgin Islands. The contracting officer also noted that Ranger has two long-standing, permanent offices in the set-aside area, as well as 204 current permanent employees and current, relevant licenses. The CO also noted that Ranger filed its tax returns in the Virgin Islands. Based on this information, the CO concluded Ranger was eligible for award.
GAO found this evaluation reasonable. While the CO initially concluded that neither offeror was eligible, the additional information provided by Ranger confirmed its presence in the Virgin Islands to the CO’s satisfaction. GAO found the evaluation thorough and well-documented, and denied the protest as a general disagreement with the outcome.
Falken also alleged the CO treated the firms unequally, but GAO found the protester failed to support these allegations with proof of disparate treatment.
Falken USVI LLC is represented by Kenneth A. Martin of The Martin Law Firm PLLC. Ranger American of the VI Inc. is represented by Jonathan D. Shaffer, John S. Pachter, Mary Pat Buckenmeyer, and Julia S. Shagovac of Smith Pachter McWhorter PLC. The government is represented by Hillary J. Freund and Rina Martinez, Department of Homeland Security. GAO attorneys Nora K. Adkins and Amy B. Pereira participated in the preparation of the decision.
