B-232303.3, Nov 1, 1988, 88-2 CPD 423

B-232303.3, Nov 1, 1988, 88-2 CPD 423

PROCUREMENT - Socio-Economic Policies - Small business set-asides - Use - Administrative discretion DIGEST: Agency is not required by Department of Defense Federal Acquisition Regulation Supplement DFARS Sec. 19.501(g) to issue solicitation as a repetitive small business set-aside where a previous small business set aside procurement included the services in issue as one element of a broader requirement but immediately preceding contract for the services was awarded through the section 8(a) program; the statutory and regulatory scheme suggest that a small business set-aside is not required in such circumstances.

Defense Services, Inc.:

Defense Services, Inc. DSI objects to the Department of the Army's decision to issue, as a small disadvantaged business SDB set-aside, solicitation No. DACH77-88-B-1058 for mess attendant services at Schofield Barracks, Hawaii. DSI contends that the set-aside for SDB is not permissible because this service previously has been acquired successfully by the contracting officer on the basis of a small business set-aside. DSI contends that Federal Acquisition Regulation (FAR) Sec. 19.501(g) FAC 84-37 prohibits an SDB set-aside in these circumstances. FAR Sec. 19.501(g) provides that once a product or service has been acquired successfully by a contracting office on the basis of a small business set- aside, all future requirements of that office for that particular product or service shall, if required by agency regulations, be acquired on the basis of a repetitive set aside. In this connection, Department of Defense DOD FAR Supplement DFARS Sec. 19.501(g) does so require. addition, DFARS Sec. 19.502 72(b)(1) 53 Fed. Reg. 5114, 5123, Feb. 19, 1988 specifically precludes the use of an SDB set-aside where the product or service has been previously successfully acquired under a small business set-aside.

The Army has advised our Office that the mess attendant services solicited under the above invitation for bids were not previously acquired under a small business set-aside, and for the last 2 years were separately satisfied by awards under the section 8(a) program. DSI, however, relies upon 1986 set-asides for full food services of which mess attendant services appear to have been a part.

We have previously dismissed two protests challenging this SDB set aside on the strength of the Army's advice that there had been previous section 8(a) awards for this service but no small business set-aside. See Logistical Support, Inc., B-232303.2, Sept. 13, 1988, 88-2 CPD Para. ***; MLB Professional Services, B-232303, Aug. 26, 1988, 88-2 CPD Para. 187. This is the first time we have been advised that mess attendant services previously were acquired at Schofield Barracks as part of a larger procurement that was set aside for small business.

The DFARS provisions applicable here implement section 1207 of Pub. L. No. 99-661, 100 Stat. 3816, 3973 1986, and section 806 of Pub. L. No. 100- 180,101 Stat. 1126-7 1987, which establish a DOD goal of awards to SDBs of 5 percent of the value of contracts to be awarded for fiscal years 1987- 89, but also provide that current levels of awards made pursuant to small business set-asides and to the section 8(a) program should be maintained. The DFARS implements these statutes in part by providing for SDB set- asides in certain circumstances but, as indicated above, precluding SDB set-asides where the product or service previously was successfully acquired through a small business set aside. The DFARS also precludes SDB set-asides when the Small Business Administration SBA timely requests that a new or follow-on requirement be reserved for the section 8(a) program and such an award is otherwise appropriate. See DFARS Sec. 219.803.

The protester's view is that since mess attendant services previously were acquired, albeit as part of a broader procurement, under a small business set-aside, the services may not now be acquired through an SDB set-aside. It is not at all clear, however, that the DFARS imposes such a limitation. Moreover, it is clear that the immediately preceding contracts for mess attendant services were awarded through the section 8(a) program. In this respect, the thrust of Pub. L. No. 100-180 and the DFARS is that the follow-on contracts for mess attendant services should be section 8(a) contracts if the SBA so requests, rather than small business set-aside contracts. Thus, the fact that the mess attendant services have been broken out from the previous small business set-aside procurement and subsequently acquired under the section 8(a) program suggests that the DFARS does not mandate the use of a small business set- aside in these circumstances. In addition, the record indicates that it was the SBA the agency with major responsibility for furthering the interests of small and disadvantaged business, declining a section 8(a) contract because the incumbent contractor graduated from the 8(a) program, that recommended the use of an SDB set-aside here in lieu of an 8(a) award.

Under the circumstances, the agency acted reasonably in deciding to use an SDB set-aside.

The protest is dismissed.