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Generally, the decision whether to set aside a procurement for SDVOSB concerns is a business judgment within the contracting officers discretion, which we will not disturb absent a showing that it was unreasonable. The protesters primary complaint is that the agency unreasonably limited its market research to Minnesota, instead of considering SDVOSB couriers nationwide. Mountain West Helicopters, LLC; Trans Aero, Ltd., B-408150, B-408150.2, July 1, 2013, 2013 CPD 152 at 3. 8123 allows the agency to procure prosthetic appliances and services without considering whether to set aside the procurements for SDVOSBs. As stated above, the VA noted from its experience procuring these goods and services that it did not receive offers from any SDVOSBs over the past 10 years. We also noted that the VA's regulations implementing the 2006 VA Act provide in relevant part: (a) .
25274 (May 5, 2004) (The law limits use of SDVOSB procurement authority to procurements that would not otherwise be made from Federal Prison Industries (section 4124 or 4125 of title 18, United States Code) or the [JWOD] Act (41 U. In addition, the FAR addresses the priorities for use of certain mandatory sources and the use of other sources, such as the GSAs FSS. In response, the FAR Council stated that [t]he use of FSS is not required and the use of FSS is not mandatory; however, agencies are encouraged to consider using certain existing non-mandatory sources before considering sources in the open market. Thus, there is nothing in statute or regulation stating that it is unlawful for an agency to issue an SDVOSB sole-source award when the requirement could be satisfied through an order under the FSS, as long as all conditions for a sole-source award are met. Market Research The Small Business Act states that an agency may issue a sole-source SDVOSB award if the contracting officer does not have a reasonable expectation that 2 or more small business concerns owned and controlled by service-disabled veterans will submit offers for the contracting opportunity. AR, Tab 4, Justification for Other than Full and Open Competition; Tab 5, Market Research. 7, 2015, 2015 CPD 28 at 4; Hydroid LLC, B-299072, Jan. Here, the protester argues that publicly available information, but not anything on the face of ARG Tacticals proposal, calls into question its SDVOSB status. The record shows that the agency reviewed ARG Tacticals quotation and SAM profile prior to award, and both showed that ARG Tactical represented that it was an SDVOSB. Nonetheless, the agency maintains that because it needs a minimum of 14 contracts, the number of SDVOSB concerns capable of performing the required work was insufficient to meet its needs. Nothing in the language of the VA Act supports the agencys position that in the context of multiple-award contracts, the VA Acts Rule of Two requires set asides only when there will be two or more SDVOSB or VOSB offers per contract. We recognize it is within the agencys discretion to determine the number of IDIQ contracts required to satisfy its needs. that the A/E shall visit proposed project site, as required . Under the Veterans Benefits, Health Care, and Information Technology Act of 2006, 38 U. We conclude that the agencys market research and resulting set-aside decision were reasonable. After considering DLAs response to the protest, our Office solicited the views of VA and SBA. (Spur Design, LLC B-412245.3: Feb 24, 2016) (pdf) FRM asserts that it was unreasonable for the agency to limit the market research to the local geographic area because, according to the protester, the majority of the support requirements for this contract will be performed at the contractors own facility. The agency responds that: it was necessary to limit . The agency initially searched only in Washington state and found that there were no SDVOSB firms under the relevant NAICS code that perform valet parking services. Kingdomware in its comments on the agency report did not rebut the agency's responses regarding the MOBIS reference or the social media notification capability requirement. Both SBA and the Federal Acquisition Regulatory Council have implemented these statutory provisions in regulations, which state that an agency may not issue an SDVOSB sole-source award if the requirement can be satisfied using Federal Prison Industries, the JWOD Act, or is currently being performed under the authority of the SBAs 8(a) Business Development program. See Singleton Enters.-GMT Mech., A Joint Venture, B-310552, Jan. Since we conclude that the agencys decision not to set aside any of these contracts was inconsistent with the requirements set forth in the VA Act and its implementing regulations, we sustain the protest. market research to the states of Oregon, Washington and Idaho because the solicitation clearly stated under the heading Construction Period Services that site visits would be expected . As noted above, in conducting its market research, the agency used the NAICS code for parking lots and garages to search the Vet Biz database to identify potential SDVOSB firms, then researched the firms websites to determine whether the company performed valet parking services. With regard to setting aside procurements exclusively for veteran-owned small businesses (VOSBs) or SDVOSBs, 38 U. Significantly, Starlight concedes that two SDVOSB firms have experience servicing C-5 aircraft. To the extent that the protester contends that these SDVOSB firms may have limited experience, we find that the protester has not persuasively rebutted the agencys argument that the services being procured are not complex, do not involve specialized tasks, or otherwise require highly skilled labor, unique qualifications, or certifications. The VA responds that, pursuant to the specific authority accorded the agency in 38 U. The VA posted information concerning the task order on the Federal Procurement Data System (FPDS) website the same day. As noted above, the agency conducted market research from which it determined that there were a number of SDVOSBs that appeared capable and interested in performing these requirements. If it does, the matter ends there, for the unambiguous intent of Congress must be given effect. Moreover, we are not persuaded by the protester that it was unreasonable for the Air Force to consider experience providing services to C‑17, C-130, KC-135, and KC‑10 aircraft relevant to providing similar services to C-5 aircraft, and we disagree with the protester that the agency misled offerors in that regard. (Starlight Corporation, Inc., B-410471.2: Dec 30, 2014) (pdf)The protesters contend that the RFP should have been set aside for SDVOSBs, citing the Veterans Benefits, Health Care and Information Technology Act of 2006, 38 U. One year later, on August 1, 2012, the VA exercised an option to extend the task order, and posted the information on FPDS on August 2. While this Office has set forth its view of the 2006 VA Act in Aldevra and its progeny, as well as in testimony before the Congress, the VA has elected not to follow our recommendations. Generally, a procurement set-aside determination is a business judgment within the contracting officers discretion, which we will not disturb absent a showing that it was unreasonable. The agency also determined that there were small business manufacturers from which the VA had obtained the solicited items in the past, and from which non-manufacturing SDVOSBs could obtain the items for sale to the VA. As an initial matter, although the agency has defended numerous protests before our Office involving precisely this issue, this is the first time that the agency has raised these arguments. 8127(d) grants the agency discretion to decide that in some procurements the mandate in the statute will apply, and in other procurements it will not. 125.20(a); FAR 19.1406(a)(1) (SDVOSB sole-source is permitted when the contracting officer does not have a reasonable expectation that offers would be received from two or more service-disabled veteran-owned small business concerns). See, e.g., Crosstown Courier Serv., B‑407404, supra (courier services in a designated area); In and Out Valet Co., supra (valet parking services).
As noted by the agency, our cases have recognized that in appropriate circumstances an agency may focus its market research on the geographical area in which performance will take place after reasonably concluding that there is little likelihood that firms from outside the area would respond to the solicitation. The cases cited by the agency, however, are readily distinguished from the circumstances here, since they involved requirements that likely would be performed by local firms, such as those requirements necessitating a substantial, regular presence by the contractor at specific sites or a specific work area. 35 at 2; In & Out Valet Co., B-311141, April 3, 2008, 2008 CPD para. Subsection (b) provides that, for contracts with SDVOSBs for amounts less than the simplified acquisition threshold, the VA is also authorized to use noncompetitive procedures. In response to the allegation regarding the market research, DLA asserts that its market research was sufficient under the circumstances. Finally, in response to Aero Sages allegation regarding the contracting officers decision that the VA Acts Rule of Two had not been met, DLA states that because of the firms common ownership, the contracting officer did not view them to be independent. On this basis, VA requested that our Office deny the protest. SBA commented on DLAs market research as follows: [T]he agency limited its search to verified SDVOSBs that had Wisconsin included in their service area list. For the reasons that follow, we agree with DLA, VA, and SBA that Aero Sages protest should be denied. Finally, the agency removed all geographic restrictions and identified five other firms nationwide under the relevant NAICS code that perform valet parking services. Accordingly, it was not improper for the agency here not to set this requirement aside for SDVOSBs, and Kingdomware's arguments to the contrary provide no basis on which to sustain the protest. The agency further explains that the social media notification capability is useful for reaching employees when they are not in the workplace. Washington-Harris Group, B-401794, B-401794.2, Nov. Protest (B‑405492) at 1; Protest (B-405493) at 1; Comments at 1. Thus, she was concerned that since the only two SDVOSBs that were identified as being reasonably likely to submit quotations were under common ownership, there was not adequate price competition, and, therefore, there was not a reasonable expectation that award could be made at a fair and reasonable price. In response, VA commented that DLA adhered to the market research requirements of the VAAR by reviewing the VIP database to identify whether there were two SDVOSBs or VOSBs capable of meeting the requirement that were likely to submit a quotation at a fair and reasonable price. VA Comments at 1. The agency then expanded its search to the nearby states of Oregon, Idaho, and California, and found only one SDVOSB firm (located in California) under the relevant NAICS code that performs valet parking services. Consequently, we consider these protest grounds to be abandoned. 230 at 5 n.3; Strategic Res., Inc., B-287398, B-287398.2, June 18, 2001, 2001 CPD para. (Kingdomware Technologies, Inc., B-405533.2, November 10, 2011) (pdf) The protester contends that the sole-source awards are improper because the VA failed to consider other qualified SDVOSBs for award. The protester argues that the VA should have set aside these procurements for SDVOSBs--and not have awarded sole-source contracts--because two or more SDVOSBs would have submitted offers for the work. 46 et seq)). Therefore, there is nothing in the Small Business Act or implementing regulations that preclude an SDVOSB sole-source award if the requirement can be satisfied using the GSAs FSS. Here, DLA conducted market research, which included a sources sought notice, a review of all responses received expressing an interest in the acquisition, and a review of the prior procurement history. See Al-Razaq Computing Services, B-410491, B-410491.2, Jan. Here, there is no dispute in the record that the literal requirement as set forth in the VA Acts Rule of Two was satisfied. Further, in implementing the VA Act, the VA additionally required that [i]n determining the acquisition strategy applicable to an acquisition, the contracting officer shall consider, in the following order of priority, contracting preferences that ensure contracts will be awarded first to SDVOSB concerns, then VOSB concerns, to the extent the Rule of Two is met, prior to considering whether to award to any other category of small business contracting preferences, including small business concerns. We cannot find reasonable the agencys decision not to set aside this acquisition, or any portion of this acquisition, for SDVOSB or VOSB concerns because its market research yielded fewer of these concerns than the anticipated number of contract awards. In this regard, when the contracting officer, in reconsidering the set-aside decision after receiving the contract specialists expanded search results, indicated on May 4 that a 100% SDVOSB set aside may be necessary, id., the agency project engineer responded that he was definitely opposed to setting this solicitation aside for SDVOSB, due to the poor performance of the SDVOSB contractor in the VISN 6 and VISN 20 regions. It doesnt make any sense to hire someone who cannot do the job properly. In our view, however, such anecdotal evidence of poor performance by an SDVOSB contractor, unsupported by any detailed analysis indicating that a small business concern would be unlikely to possess the specific skills and resources needed to perform the specific work required under the contemplated contract, does not represent the reasonable exercise of informed business judgment required under the statute. Therefore, IOVC contends that the agency abused its discretion in failing to set the procurement aside for SDVOSBs. 8127, and the VAs implementing regulations, VA Acquisition Regulation (VAAR), 48 C. Crosstown Courier Serv., Inc., B-407404, supra, at 3. 8127(d) (emphasis added); see Buy Rite Transport, B-403729, B-403768, Oct. Although agencies need not use any particular methodology when conducting market research, measures such as prior procurement history, market surveys, and advice from the agencys small business specialist may all constitute adequate grounds for a contracting officers decision. 8, 2009, 2009 CPD 253 at 2 (an agency is not required to contact all potential sources when conducting market research regarding the feasibility of sole-source procurement). However, a limited exception applies where a protester argues that the awardees offer shows, on its face, that it is not eligible for award as a small business, or in this case as an SDVOSB; in those instances, we will review the reasonableness of the contracting officers decision not to refer the matter to the SBA. We will refer to this requirement, grounded in Title 38, as the VA Acts Rule of Two. Under the 2006 VA Act at issue here, the VA shall set aside its acquisitions for SDVOSB or VOSB concerns once the Rule of Two is satisfied. Under the Veterans Benefits, Health Care, and Information Technology Act of 2006, 38 U. Although the agency now argues that the inadequate number of SDVOSB A/E firms in the VISN 20 region warranted not setting aside the procurement for SDVOSB firms, the protest record suggests that agency officials may, in fact, have been concerned with presumed poor performance by an SDVOSB awardee. As noted, the engineer concluded that, [i]n my opinion, if we are going to be forced to set this aside for SDVOSB, then we should cancel the solicitation. Specifically, the protester notes that there are 46 SDVOSB firms nationwide registered under NAICS code 812930, and that four of those firms are currently performing contracts under that NAICS code. 819.7004, 819.7005, the VA is required to set aside acquisitions for SDVOSBs whenever it determines that there is a reasonable expectation that offers will be received from at least two SDVOSB firms and that award can be made at a fair and reasonable price. Crosstown Courier Serv., Inc., B-410936, supra; Flow Sense, LLC, B-310904, Mar. Further, we have held that, even where an RFP does not restrict competition to firms located in a particular geographical area, an agency may focus its market research on the geographical area in which performance will take place and consider the likelihood that firms from outside it would respond to the solicitation. Subsection (c), referred to in the above provision, provides the VA with authority to award sole-source contracts to SDVOSBs when: (1) such concern is determined to be a responsible source with respect to performance of such contract opportunity; (2) the anticipated award price of the contract (including options) will exceed the simplified acquisition threshold . When SBA issues a waiver of the nonmanufacturer rule, a firm can supply the product of any size business without regard to the place of manufacture. The agency was not required to make a determination of responsibility in the course of conducting market research. We similarly see no basis to question the contracting officers conclusion that due to Aero Sages and Sage Cares common ownership, the VA Acts Rule of Two had not been met. The agency conducted searches of the Vet Biz database, reasonably focused its market research on the geographical area in which performance will take place, and considered the likelihood that firms from outside it would respond to the RFQ. 819.7004, 819.7005, the VA is required to set aside acquisitions for SDVOSBs whenever it determines that there is a reasonable expectation that offers will be received from at least two SDVOSB concerns and that award can be made at a fair and reasonable price. Those searches identified only one Minnesota-based SDVOSB courier service vendor. The phrase for purposes of meeting the goals is part of an introductory clause that establishes exceptions to the mandate (those exceptions being when subsections (b) and (c) apply). In essence, the VA seeks Chevron deference for a rulemaking it has never performed. Based on this subsection, the agency argues that if a SDVOSB/VOSB is not a FSS contract holder, it cannot be viewed as meeting the same requirements of that contracting preference, the FSS program, and, therefore, is not entitled to any priority preference. We disagree with the VAs characterization of the FSS program as a contracting preference. In sum, we find unreasonable, and inconsistent with the statute, the agencys failure to determine whether two or more SDVOSB concerns can meet the requirement at a reasonable price before using FSS procedures. As an initial matter, we disagree that Kingdomware is not an interested party to challenge the agency's actions. sections 3551-3556 (2006) and our Bid Protest Regulations, 4 C. Here, Kingdomware protested the terms of the RFQ, arguing among other things that the VA had not reasonably determined whether the procurement should be set aside for SDVOSBs. Here, as in Aldevra, the VA has not conducted market research to determine if there are two or more eligible SDVOSBs capable of performing the agency's requirements.