Protest Against Small Business Set-Aside

B-194414.3: Mar 24, 1980

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

A firm protested a decision by the General Services Administration (GSA) to set aside an item in a multiple award negotiated procurement for competition among small businesses. Offerers were informed of the set-aside by way of an amendment to the request for proposals (RFP) issued after the date set for submission of initial proposals. Although itself a small business concern, the protester offered to supply a product manufactured by a large business. The protester alleged that: (1) there was no compelling reason for GSA to issue the amendments; (2) the set-aside was in violation of the Small Business Act because GSA did not ensure that a sufficient number of small businesses could compete to fill the government's needs at reasonable prices, and the Small Business Administration (SBA) refused to concur in the set-aside; and (3) no basis exists in law for a small business set-aside on a multiple award procurement where the needs of the user agencies and the quality of small business equipment have not been evaluated. There is no requirement that an agency have a compelling reason for issuing an amendment to an RFP; only when an agency seeks to cancel an invitation for bids after bid opening is the compelling reason standard applied. In a negotiated procurement, the procurng agency need only show that it had a reasonable basis to issue the amendment to the RFP. The record showed that there was a reasonable basis to set aside the item in question. Two categories of equipment under the item were originally set aside for small business competition; however, a firm protested that all of the categories of equipment under the item were obtainable from small businesses. An investigation supported the protester's claim, and the contracting officer properly determined that further set-asides would be appropriate. While the Small Business Act does not prohibit contracting officers from setting aside procurements without the concurrence of SBA, the point was moot since the record showed that SBA encouraged GSA officials to obtain the item in question under a small business set-aside. Finally, there is no requirement that GSA perform an in-depth evaluation of each individual user's or agency's needs and the quality of equipment available from potential small business suppliers before setting aside a multiple award procurement for small business competition. Accordingly, the protest was denied.