Kingdomware Technologies; SDV Security, LLC

Decision

Matter of: Kingdomware Technologies; SDV Security, LLC

File: B-406122; B-406122.2

Date: February 13, 2012

DIGEST

Protest that agency was required to set aside solicitation for service-disabled veteran-owned small businesses is denied where agency reasonably estimated the value of the procurement as below the simplified acquisition threshold and properly set the solicitation aside for small business concerns.

Kingdomware Technologies and SDV Security, LLC protest the terms of request for quotations (RFQ) No. M67001-12-Q-0020, issued by the United States Marine Corps for web-based mass emergency notification services. The protesters contend that the agency improperly failed to set the procurement aside for service-disabled veteran-owned small business concerns (SDVOSB).

We deny the protest.

The RFQ, issued on October 21, 2011 under a combined synopsis/solicitation, was issued as a small business set-aside for the procurement of “Mass Emergency Notification Service for Marine Corps Base Camp Lejeune.” Agency Request for Dismissal, at 1. Prior to the solicitation closing date, Kingdomware contacted the agency to learn why the solicitation had not been set aside for SDVOSBs. The agency advised Kingdomware that a small business set-aside was appropriate since the anticipated dollar value of the procurement did not exceed the simplified acquisition threshold of $150,000, established by Federal Acquisition Regulation § 2.101. Thereafter, the protesters filed the subject protest challenging the agency’s set-aside decision.

The protesters, both SDVOSB firms, argue that the agency’s estimate of the dollar value of the procurement is unreasonable--they contend that the estimated value of the procurement should have been in excess of $150,000. Accordingly, the protesters maintain that the agency was required to first consider a SDVOSB set-aside before issuing the solicitation as a small business set-aside. See 13 C.F.R. § 125.19(b)(2); Federal Acquisition Regulation (FAR) § 19.203(c) (establishing that a contracting officer “shall first” consider setting aside a procurement for 8(a), HUBZone, SDVOSB, or woman-owned small business concerns, where the acquisition has a value above the simplified acquisition threshold ($150,000)).[1] As discussed below, we have no basis to question the reasonableness of the agency’s estimated value of the procurement; thus, the protesters’ contention that the agency should have first considered setting aside the solicitation for SDVOSB firms is without merit.[2]

The record reflects that in calculating the anticipated value of the current procurement, the agency considered the value of the prior delivery order for these services, which was issued in 2008 for $160,170, and concluded that this follow-on procurement had an estimated value of less than $150,000 based on several factors.[3] Specifically, the agency identified market changes and changes in requirements which would drive down costs. In this regard, for instance, the agency noted that a caller identification function, which was considered a special feature in 2008, which drove up costs, is now an industry standard. In addition, the current solicitation does not allow for training-related travel costs, it deleted certain start-up data compilation work, and it reduced from 70,000 to 60,000 the number of minutes of notification services required.[4] Moreover, based on its market research, the agency expected significantly more robust competition, as compared to 2008--the price of the prior procurement was based on the agency’s receipt of a single quote.

In challenging the agency’s estimate, the protesters principally contend that the agency failed to consider required start-up and training costs. Although the agency initially indicated, generally, that start-up and training costs were inapplicable to the current procurement, it clarified the record to reflect that only specific start-up and training costs were deleted from its calculation of the estimated procurement value. Specifically, the agency deleted costs associated with data compilation work, which is not required under the current solicitation, as well as certain training-related travel expenses, which, unlike the 2008 delivery order, will not be reimbursed under the current delivery order.[5] According to the agency, no other start-up or training costs were deleted in the agency’s calculations. Moreover, to the extent the protesters suggest that vendors would value and submit quotes in excess of the $150,000 simplified acquisition threshold, the agency reports that it received a substantial number of quotes in response to the RFQ, and that most quotes were less than $150,000. Given this record, we have no basis to question the reasonableness of the agency’s determination that the current procurement has an estimated value below the simplified acquisition threshold, or its decision to set the procurement aside for small businesses, as opposed to SDVOSB concerns, based on that estimated value.

The protests are denied.

Lynn H. Gibson
General Counsel