B-400163, Commonwealth Home Health Care, Inc., July 24, 2008
Protest that agency improperly set aside procurement for small business concerns is denied where the agency performed market research and reasonably concluded that adequate small business competition could be expected.
Commonwealth Home Health Care,
Inc. protests the terms of request for proposals (RFP) No. VA-247-08-RP-0160,
issued by the Department of Veterans Affairs (VA) for supplies and services
supporting the provision of oxygen to veterans in
Commonwealth is the incumbent VA contractor providing home
oxygen to veterans in the
The VA states that it initially issued the RFP on an
unrestricted basis. Subsequently,
another firm filed a protest challenging the VA’s issuance on an unrestricted
basis of a similar solicitation for home oxygen in the area of
Commonwealth filed its protest challenging the set-aside
decision and designation of the requirements as “supplies” prior to the solicitation
closing date of
Under Federal Acquisition Regulation (FAR) sect. 19.502-2(b),
a procurement with an anticipated dollar value of more than $100,000, such as
the one here, must be set aside for exclusive small business participation when
there is a reasonable expectation that offers will be received from at least
two responsible small business concerns and that award will be made at a fair
market price. The use of any particular
method of assessing the availability of small businesses is not required so
long as the agency undertakes reasonable efforts to locate
responsible small business competitors. National Linen Serv., B-285458,
Here, the protester questions the accuracy and reliability
of the agency’s market research and opines that it is simply not possible for a
small business concern meeting the designated size standard to perform the
contract from a financial or operational standpoint. Protester’s Comments at 2. The record, however, establishes that the
agency did in fact conduct adequate market research to determine whether it was
reasonable to set aside the requirement for small business concerns, and, based
upon the results of this research, reasonably determined that it could expect small
business competition. While the protester argues that the set-aside determination was unreasonable because it does
not believe that a small business is capable of performing the work, this
argument reflects nothing more than the protester’s disagreement with the
agency’s judgment regarding the viability of a set-aside, which does not establish
a basis for our Office to question the agency’s determination. IBV, Ltd., B-311244,
The protester also challenges the agency’s decision to classify the solicitation as one for supplies as opposed to services. However, given our conclusion that the procurement was properly set aside for small business concerns, the protester is not eligible to compete under the RFP, and therefore is not an interested party to raise this issue. See Bid Protest Regulations, 4 C.F.R. sections 21.0(a), 21.1(a) (2008).
The protest is denied.
Gary L. Kepplinger
The Small Business Act’s non-manufacturer rule provides that the offer of a non‑manufacturer
small business concern under a small business set-aside for “any procurement
contract for the supply of a product” can be considered, provided, among other
things, that the small business concern represents that it will supply the
product of a domestic small business manufacturer or processor, or a waiver of
this requirement is granted by the Small Business Administration (SBA). 15 U.S.C. sect. 637(a)(17) (2000). This rule is also included in the SBA’s
regulations. 13 C.F.R. sect. 121.406 (2007). Following the decision of the United States
Court of Federal Claims in Rotech Healthcare, Inc. v.
 In this regard, we note that the agency’s conclusions regarding the potential for obtaining competitive proposals from small businesses appear to have been validated by the fact that it received offers from six small business firms in response to the solicitation.
 The protester does not argue that changing the classification of the solicitation from supplies to services would have reduced the pool of eligible small business firms and thereby affected the agency’s set-aside determination. Rather, the protester suggests just the opposite, that by categorizing the requirement as “supplies”--and thereby triggering application of the SBA’s non-manufacturer rule—it is more difficult for small business concerns to perform the work.