Protest of IFB Issuance as Small Business Set-Aside

A large business protested the Defense Logistics Agency's decision to issue an invitation for bids as a total small business set-aside. The firm principally contended that, given the depressed state of the product's industry, the contracting officer abused his discretion in setting aside this requirement for small business. Both the Small Business Act and the Armed Services Procurement Act of 1947 reflect a congressional policy of aiding small business by requiring the procurement of a fair proportion of Government property and services from small business concerns. Under Defense Acquisition Regulations, a procurement must be set aside for small business whenever the contracting officer reasonably expects bids from at least two responsible small business concerns and that the award will be made at a reasonable price. Contracting officers are not required to consider industry conditions or any other similar factors in making set-aside determinations. Here, the contracting officer made the requisite determination based on earlier expressions of interest by two small business manufacturers. The small business low bidder offered prices which were deemed reasonable. Under these circumstances, GAO found no basis for questioning the setting aside of the procurement. The mere fact that small business may receive a significant proportion of Government contracts in a particular industry does not necessarily mean that more than a fair proportion of the Government's total contracts has been awarded to small business. Accordingly, the protest was denied.