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The protester challenged a set-aside decision. GAO sustained. The agency’s market research was deficient; the agency could not conclude that it would likely receive proposals from at least two responsible small businesses.
Knudsen Systems, Inc., GAO B-422433.2
- Solicitation Amendment – The agency’s RFP erroneously stated that the Nonmanufacturer Rule (FAR clause 52.219-33) was waived. The agency amended the RFP to include the nonmanufacture rule. With this new amendment, the protester was ineligible for the contract.
- Rule of Two – The protester claimed that if the agency had conducted its market research considering the amendment, it would have recognized that the Rule of Two could not be satisfied. GAO agreed. The agency failed to assess whether two or more small businesses could comply with the nonmanufacturer rule. Additionally, the market research and set-aside decisions were based on the agency’s mistaken assumption that the class waiver negated the nonmanufacturer rule.
- Flawed Set-Aside Decision – GAO concluded that an agency with flawed market research is incapable of knowing whether any small businesses could meet the requirements of the contract at a fair price. As such, the set-aside decision was unreasonable and the protest was sustained.
The protester is represented by Thomas M. Craig and Emily A. Spence of Fluet & Associates, PLLC. The agency is represented by Christopher Lybeck and Laura A. Whitten of the Department of Navy. Kyle E. Gilbertson and Peter H. Tran of GAO participated in the preparation of the decision.
–Case summary by Joshua Lim, Assistant Editor
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