Protest of Agency Determination Not To Procure Services Under Section 8(a) of Small Business Act

B-203108: Jun 8, 1981

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A firm protested the Army's refusal to procure certain instruction services for socially and economically disadvantaged small business concerns covered by the Small Business Act. The protester questioned the Government estimate upon which the Army based its determination that it would be less costly to perform the services in-house than to acquire the protester's services under the Act. The Army had solicited a price from the protester to compare with the Government in-house estimate to determine whether to contract under the Act. The Act authorizes the Small Business Administration (SBA) to enter into contracts with Government agencies and to arrange for the performance of such contracts by letting subcontracts to socially and economically disadvantaged small business concerns. However, by the terms of the Act, a Government contracting officer is authorized, in his discretion, to let the contract to SBA upon terms and conditions the agency and SBA agree to. Therefore, contracting agencies have broad discretionary authority in this area, and GAO will not review a determination whether to contract under the Act or the judgmental decisions involved unless the protester presents prima facie evidence of fraud or bad faith on the part of procurement officials. Such evidence must include a showing that the agency had a specific intent to injure the protester. The protester did not allege fraud or bad faith, but that the Army's estimate was unreasonable. Thus, GAO has no legal basis to review the protest. Accordingly, the protest was dismissed.

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