Protest of Decision To Withdraw Small Business Set-Aside

A small business protested the withdrawal of a total small business set-aside under two requests for proposals (RFP) for the procurement of aircraft monitoring equipment. The set-aside was withdrawn after the contracting officer concluded that the prices offered by the protester, the only eligible offeror under the set-aside, were unreasonable. The protester contended that its prices were fair and reasonable when judged either against prior procurements for the same items or against the total minimum quantities established by the original RFP, and that it was improper for the contracting officer to use prices offered by a large business to judge the reasonableness of a small business offer under a total set-aside. The protester challenged the size status of the only other offeror under the original procurement. The Small Business Administration (SBA) determined that the other offeror was was not a small business and sustained the protest. However, because of the large difference between the prices offered by the protester and the larger business, the contracting officer withdrew the small business set-aside for the procurements with the approval of SBA. GAO will not question the withdrawal of a small business set-aside based upon a determination that prices received from a small business concern are unreasonable without a showing of unreasonableness, bad faith, or fraud. Further, large business offers on small business set-aside procurements may be considered in determining whether small business offers submitted on the same procurement are unreasonable. With respect to the protester's contention that its price was less than the prices in earlier contracts for the same equipment, it was noted that contracting officers are not limited to historical information in the consideration of prices. Thus, the decision to withdraw the set-aside was reasonable and proper. Accordingly, the protest was denied.