As indicated above, Agriculture concedes that the services here had previously been acquired under a small business set-aside so that the decision not to set aside this procurement could be considered a withdrawal of the set-aside, requiring compliance with FAR § 19.506. See FAR § 19.501(g). FAR § 19.506 requires the procuring agency to give both the agency's small and disadvantaged business utilization specialist and the SBA PCR a written statement of the reasons for the withdrawal. See U.S. Constructors, Inc.; Eletech, Inc., B-248329; B-248605, Aug. 19, 1992, 92-2 CPD ¶ 112. Agriculture also requires that its acquisition offices in the Washington, D.C., area notify and make available for review by the SBA PCR all of its proposed acquisitions in excess of $10,000 that are not set aside for small business, with no limitation on whether or not the services had been previously procured under a small business set-aside. 48 C.F.R. § 419.402(b); see also 13 C.F.R. § 125.6(a)(2) (the SBA PCR is responsible for screening procurements that are not recommended for a set-aside to ascertain whether they can be recommended for set-aside action). FAR § 19.505 provides a process whereby the SBA PCR can appeal to a higher agency official any decision of a contracting officer not to accept the SBA PCR's recommendation on such matters as a decision to issue a procurement on an unrestricted basis instead of as a small business set-aside as recommended by the SBA PCR. It is clear that the foregoing regulations contemplate interaction between the contracting officer and SBA PCR in deciding whether a procurement should be set aside. We think that small businesses are prejudiced when agencies withdraw repetitive small business set-asides without the benefit of the required PCR advice because the PCR, as an outside reviewer, is in a position to forcefully bring a point of view contrary to the contracting officer's to the attention of the agency's upper echelons before the solicitation is issued. This is particularly important where the agency admits the existence of a sufficient number of small businesses interested in the work and capable of performing it, and the only question is the likelihood of receiving bids at a "fair market price." See Library Sys. & Servs./Internet Sys., Inc., B-244432, Oct. 16, 1991, 91-2 CPD ¶| 337. In this case, Agriculture did not notify the SBA PCR of its decision to withdraw the set-aside, contending that notice was not necessary because the agency had obtained the approval of Agriculture's small and disadvantaged business specialist. While the Agriculture regulations only refer to disputes between the contracting officer and the small and disadvantaged business specialist on decisions to withdraw a set-aside, see 48 C.F.R. § 419.506, those regulations also specifically require the SBA PCR to be notified of all unrestricted procurements of this size. 48 C.F.R. § 419.402(b). FAR § 19.506, as set out above, provides procedures for the SBA PCR to present his or her views to cognizant agency officials regarding such decisions. Here, the SBA PCR could not avail himself of these procedures being unaware of the procurement action. In response to our request, SBA has presented its views on Agriculture's decision not to set aside this requirement for small business. SBA states that it was not notified of this procurement, even though the form sent to the Agriculture small and disadvantaged business specialist had a space for the SBA PCR's con currence, and applicable regulations required notification so the SBA PCR could present his or her views on the decision not to set aside the procurement. SBA has also reviewed the record and found that Agriculture's decision not to set aside the procurement for small business was not supported and was unreasonable. SBA notes that Agriculture no longer relies on the justification given in obtaining the consent of the small and disadvantaged business specialist, i.e., poor past performance and lack of capability of the incumbent small businesses, and that Agriculture now admits that there are sufficient responsible small business court reporting firms that could provide the service. SBA notes that Agriculture has not supported its contention that it will not obtain fair and reasonable prices from small businesses and asserts that Agriculture has not made a reasonable effort to survey the awards of any of the other agencies who obtain the same services under small business set-asides to ascertain their similarity and pricing. SBA finally notes that a fair market price need not be the lowest possible price and that Agriculture has not supported its argument that similar awards by other agencies were not at fair market prices. From our review, we agree with SBA that Agriculture has not provided a reasonable basis for its determination that it does not have a reasonable expectation of making award at a fair and reasonable price. In this regard, we generally give great weight to the views of SBA in these matters. Neal R. Gross & Co., Inc., supra; see also Library Sys. and Servs./Internet Sys., Inc., supra (protest against failure to set aside a procurement with which the SBA PCR took issue is sustained); U.S. Constructors, Inc.; Eletech, Inc., supra (protest against withdrawal of set-aside is denied where the SBA PCR elected not to appeal the agency's decision). 6 Agriculture's contention that the other agencies who obtain these services from small businesses are not paying a fair and reasonable price is simply unsupported by the record; it appears that Agriculture, which initially advanced other reasons for its decision not to set aside the procurement, did not make a reasonable effort to confirm whether fair and reasonable prices were obtained for similar services from small businesses, but simply relied upon the disputed assertions of a large business court reporter that it could offer lower prices. See Neal R. Gross & Co., Inc., supra (procuring agency did not make reasonable effort to survey the marketplace to determine if there were sufficient responsible small business firms to provide stenographic court reporter services). The fact that the services are to be performed on a nationwide basis, which may entail subcontracting by small businesses, also does not mean that fair and reasonable prices will not be obtained, since more than two small business court reporting companies currently provide nationwide services and have offices in several cities. See id. (where we rejected the same agency argument defending its decision to not set aside a procurement of nationwide court reporter services). 6 The protesters assert that the large business's pricing is misleading and does not demonstrate that the numerous small businesses will not offer fair and reasonable prices. The protests are sustained. We recommend that the current solicitation be canceled and the requirement be issued as a small business set-aside. We also find that the protesters are entitled to be reimbursed their costs of pursuing the protest, including reasonable attorneys' fees. 4 C.F.R. § 21.6(d)(1) (1992). B-247363.6, October 23, 1992 Procurement Bid Protests ■GAO procedures Protest timeliness 10-day rule Procurement Contractor Qualification Standards The General Accounting Office will consider timely protest that agency improperly waived certain qualification requirements in listing the awardee's product on a qualified products list in the context of a protest of a sealed bid procurement for the qualified product. Procurement Contractor Qualification Waiver In a sealed bid procurement for tank track components that were required to be qualified for inclusion on a qualified products list (QPL) prior to award, a protest allegation that award was made to an offeror whose product was improperly placed on the QPL is sustained where the agency waived material qualification requirements to qualify the awardee's product. Procurement Contractor Qualification Approved sources Alternate sources ☐☐☐ Approval Procurement Contractor Qualification Alternatives ■■■Pre-qualification ☐☐☐☐ Testing Although Department of Defense (DOD) Federal Acquisition Regulation Supplement § 225.872-3(f)(1) and a memorandum of understanding with a qualifying country require a DOD agency to consider for qualification the products of a qualifying country that have been tested by that country, the agency may not accept the product for listing on a qualified products list (QPL), based on the qualified country's certified test results, unless the DOD agency is reasonably assured the tests were performed in accordance with the QPL requirements. Matter of: Goodyear Tire & Rubber Co. John B. Denniston, Esq., and Thomas W. Krause, Esq., Covington & Burling, for the protester. Thomas A. Cocciardi, Esq., McDonald, Cocciardi and Christman, and Paul Dembling, Esq., Robert Evers, Esq., and Dennis Adelson, Esq., of Schnader, Harrison, Segal & Lewis, for Varec N.V., an interested party. Craig E. Hodge, Esq., Michael W. Lonsberry, and Joseph M. Shemke, Esq., Department of the Army, for the agency. Guy R. Pietrovito, Esq., and James A. Spangenberg, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. Goodyear Tire & Rubber Co. protests the award of a contract to Varec N.V. under invitation for bids (IFB) No. DAAC79-92-B-0022, issued by the Red River Army Depot (RRAD), Department of the Army, for pin assemblies for the T-156 tank track shoe assembly. Goodyear essentially protests that Varec's pin assemblies were not properly qualified, as required by the IFB, so that its bid offering this product could not be accepted for award. We sustain the protest. The IFB was issued on December 9, 1991, with a bid opening date of January 14, 1992, and contemplated the award of a 12-month requirements contract for pin assemblies with bushings for delivery to RRAD to be used in rebuilding the T-156 track shoe. The T-156 track shoe is used on the Abrams Main Battle Tank. RRAD is currently the only facility rebuilding T-156 track shoes. In rebuilding the track shoes, RRAD replaces the old pin assemblies with new ones. Because the pin assembly affects the tank's mobility, it is considered a critical item. The IFB provided that the pin assemblies must conform to MIL-T-11891B, amendment 3, and be previously tested and approved for inclusion on the applicable qualified products list (QPL) by the U.S. Army Tank-Automotive Command (TACOM). The IFB contained the standard "Qualifications Requirements" clause, as set forth in Federal Acquisition Regulation (FAR) § 52.209-1, which provides notice that award is limited to bidders offering products on a specified QPL. The clause also states that (1) products must be qualified at the time of award whether or not the product is actually listed on the QPL and (2) if, after the award, the contracting officer learns that an applicable qualification requirement has not been met at the time of award, the contracting officer may either terminate the contract for default or allow performance if that is in the government's best interest and adequate consideration is offered. Goodyear's and Varec's products were identified in the IFB as qualified; however, at bid opening, only Goodyear's product was listed on the QPL. Although Varec's product had previously been considered qualified by TACOM, the product was actually added to the QPL on January 23. At the January 14 bid opening, the following bids were received from Goodyear, Varec, and Florida Ordnance Corporation (FOC): The Army notified FOC that it intended to reject its bid because FOC's product had not been qualified, although it was currently undergoing qualification testing. FOC protested to our Office on January 9, but withdrew its protest based upon a January 28 agreement with the agency that the agency would allow FOC an additional 8 weeks to qualify its product. On January 22, Goodyear learned that the qualification tests of Varec's product had been performed and certified by the Belgian ministry of defense. On January 22, Goodyear protested Varec's qualification to us, arguing that Varec's product should not have been included on the QPL because it had not been qualified in accordance with MIL-T-11891B and applicable Department of Defense (DOD) requirements. Goodyear withdrew its protest to file an agency-level protest with the Army on February 4, within 10 working days of the date that Goodyear learned how Varec's product had been qualified. The Army denied Goodyear's protest on March 4, and Goodyear refiled its protest with us on March 17, within 10 working days of the denial of its agency-level protest. We dismissed Goodyear's protest because Goodyear had not protested an award to FOC, which was undergoing qualification testing, and, therefore, a protest of an award to Varec, the second low bidder, was premature. Goodyear requested reconsideration of the dismissal, which we denied on March 23. |