B-247556, May 12, 1992

B-247556, May 12, 1992

PROCUREMENT - Competitive Negotiation - Requests for proposals - Terms - Foreign currencies DIGEST: 1. Protest that solicitation for embassy guard services calling for payment to the contractor to be made in local currency rather than dollars violates 22 U.S.C. Sec. 4864(c)(2) (Supp. II 1990) is denied since the protested provision is not the type covered by the statute, which requires the Department of State to establish procedures to ensure that appropriate measures are taken to assure that United States persons are not disadvantaged during the solicitation and bid evaluation process due to their distance from the post. PROCUREMENT - Socio-Economic Policies - Small business set-asides - Use - Administrative discretion 2. Contracting agency's decision not to set aside a procurement for embassy guard services for small business concerns is proper where there is no reasonable expectation of receiving offers from at least two responsible small business concerns.

Attorneys

Pro-Tech Security Services, Inc.:

Pro-Tech Security Services, Inc. protests the terms of request for proposals (RFP) No. 92-008, issued by the Department of State (DOS) for guard services for the United States Embassy in Manila. Pro-Tech contends that the agency's decision to include in the RFP a requirement that the contractor accept payment in Philippine currency, and the contracting officer's failure to set the procurement aside for small business concerns, are improper because both actions violate 22 U.S.C. Sec. 4864 (Supp. II 1990), which contains provisions intended to increase participation of United States contractors in local guard contracts abroad under the diplomatic security program.

The solicitation, issued on February 10, 1992, contemplated the award of a firm, fixed-price contract for guard services at Embassy facilities for a 1-year period, with two 1-year options. The solicitation advised offerors that their prices should be quoted in U.S. dollars; however, payment would be made in Philippine currency.

The statute at issue, 22 U.S.C. Sec. 4864, contains specific findings by Congress with respect to DOS' policy concerning the advertising of security contracts at Foreign Service buildings. Congress found that because some foreign missions chose only to advertise locally, many United States security firms that provide local guard services abroad have been unaware that contracts were available and have been disadvantaged as a result. Congress concluded that United States security firms would be interested in bidding on more local guard contracts abroad if they knew of the opportunities. The stated objective of the statute is to improve the "efficiency of the local guard programs abroad administered by the Bureau of Diplomatic Security" of DOS and to "ensure maximum competition for local guard contracts abroad concerning Foreign Service buildings." order to meet this objective, 22 U.S.C. Sec. 4864(c)(2) provides that with respect to local guard contracts for Foreign Service buildings which exceed $250,000, the Secretary of State shall "establish procedures to ensure that appropriate measures are taken by diplomatic and consular post management to assure that United States persons and qualified United States joint venture persons are not disadvantaged during the solicitation and bid evaluation process due to their distance from post."

Pro-Tech argues that the RFP provision for payment to the contractor to be made in Philippine currency violates section (c)(2) of the statute because it disadvantages United States contractors. Pro-Tech maintains that American companies are not as aware of the intricacies of exchange rate fluctuations as foreign local companies] American companies incur all of their administrative overhead costs in dollars rather than local currency; and American companies are prohibited by law from holding foreign currencies in their accounts in the United States.

At issue here is what type of measures 22 U.S.C. Sec. 4864(c)(2) requires DOS to take to ensure that United States persons are not disadvantaged during the solicitation and bid evaluation process due to their distance from the post. DOS states that giving offerors sufficient time to prepare and submit responses to the solicitation and any amendment thereto is sufficient to meet its statutory obligations.

While the protester maintains that having to accept payment in foreign currencies disadvantages American offerors, this is not the type of disadvantage that section (c)(2) seeks to eliminate. The statute does not require elimination of all possible disadvantages that American offerors may have compared to local foreign offerors; rather, the provision addresses disadvantages American offerors may have during the solicitation and evaluation process because of their location away from the Embassy sites. Section (c)(2) thus generally pertains to procedural matters in the solicitation process; the provision protested here is not the type covered by this section. U.S. Def. Sys., Inc., B-246719, Mar. 18, 1992, 92-1 CPD Para. ***.

Pro-Tech also contends that the contracting officer's failure to set the procurement aside for small business concerns violates section (f) of the statute, which provides that "not less than 10 percent of the amount of funds obligated for local guard contracts for Foreign Service buildings subject to subsection (c) shall be allocated to the extent practicable for contracts with United States small business contractors."

While the protester maintains that section (f) requires the agency to set aside this solicitation for small business participation, the protester's interpretation of the language contained in the provision is incorrect. The language does not require DOS to set aside any particular solicitation for small business concerns. Rather, the provision directs DOS "to the extent practicable" to allocate at least 10 percent of the funds obligated for local guard contracts for small business set-asides.

The decision whether to set aside a particular procurement for small business concerns is governed by Federal Acquisition Regulation (FAR) Sec. 19.502-2. This provision states that a set-aside shall not be made if the contracting officer does not have a reasonable expectation of receiving offers from at least two responsible small business concerns at reasonable prices. Since the decision to set aside a procurement is a matter of business judgment within the contracting officer's discretion, we will not disturb it absent a showing that it was unreasonable. RBC, Inc., B-233589; B-233589.2, Mar. 28, 1989, 89-1 CPD Para. 316. Here, the agency asserts, and the protester does not refute, that the protester was the only small business contractor that had expressed an interest in this procurement. In light of these circumstances, the contracting officer had a reasonable basis for not setting aside the procurement. /1/

The protest is denied.

/1/ With regard to the protester's contention that DOS has improperly failed to set aside any local guard services procurements for small businesses, DOS states that it is gathering information on potential small business competitors and is seeking to identify those posts where its needs can be met by small businesses. Regardless of whether DOS has been sufficiently aggressive in carrying out the general policy of section (f), there clearly was no basis for setting aside this particular procurement.