ACCU-Lab Medical Testing

B-270259 Feb 20, 1996 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights ACCU-Lab asserts that the solicitation should have been set aside for exclusive small business participation. The solicitation was set aside for exclusive small business participation. Before bids were submitted. A determination that is required by the Economy Act. Renewing its assertion that the solicitation should have remained set aside for small businesses. ACCU-Lab contends that there are numerous capable small businesses which can offer the solicited drug testing services at fair market prices. An acquisition of services must be set aside for exclusive small business participation if the contracting officer determines that there is a reasonable expectation that offers will be received from at least two responsible small business concerns and that award will be made at a fair market price. View Decision Matter of: ACCU-Lab Medical Testing File: B-270259 Date: February 20, 1996 Agency improperly withdrew small business set-aside for drug testing services, notwithstanding its receipt of 21 expressions of interest from small businesses, where the agency did not perform an adequate market survey to determine whether it could reasonably expect 2 or more responsible small businesses to submit bids at fair market prices, but simply relied on prior procurement history that did not itself justify the decision to withdraw the set-aside. Attorneys DECISION ACCU-Lab Medical Testing protests the issuance of invitation for bids (IFB) No. 100-0575-5 by the Department of Justice, Federal Bureau of Prisons, for inmate drug testing services. ACCU-Lab asserts that the solicitation should have been set aside for exclusive small business participation. We sustain the protest. As originally issued by the Bureau in September 1994, the solicitation was set aside for exclusive small business participation. Twenty-one small businesses responded to the synopsis in the Commerce Business Daily (CBD) by requesting copies of the IFB. Before bids were submitted, the Bureau determined that the Department of Veterans Affairs (VA) Medical Center in Dallas, Texas, would be able to provide the drug testing services less expensively than the incumbent contractor. Instead of continuing with the procurement, the Bureau entered into an inter-agency agreement with the VA for the solicited drug testing services with performance commencing on July 13, 1995. Pharmchem, the incumbent contractor, then filed an action in the United States District Court to enjoin the Bureau from obtaining the drug testing services from the VA. Pharmchem alleged, among other things, that the Bureau had improperly determined that the VA could provide the services more conveniently or cheaply than a commercial enterprise, a determination that is required by the Economy Act, 31 U.S.C. Sec. 1535(a)(4) (1994), prior to entering into an inter-agency agreement. The Bureau decided to resolve the matter by agreeing to reissue the solicitation for the inmate drug testing services and, on that basis, the court dismissed Pharmchem's motion. When it reissued the solicitation, the Bureau announced in an August 23, 1995, CBD notice that the acquisition would no longer be restricted to small businesses. [1] ACCU-Lab, a small business, filed an agency-level protest objecting to the Bureau's withdrawal of the set-aside restriction. After it received the Bureau's denial of its protest, ACCU-Lab filed a timely protest with our Office, renewing its assertion that the solicitation should have remained set aside for small businesses. ACCU-Lab contends that there are numerous capable small businesses which can offer the solicited drug testing services at fair market prices. An acquisition of services must be set aside for exclusive small business participation if the contracting officer determines that there is a reasonable expectation that offers will be received from at least two responsible small business concerns and that award will be made at a fair market price. Federal Acquisition Regulation (FAR) Sec. 19.502-2(b). For the most part, we view this determination as a business judgment within the contracting officer's discretion. Bollinger Mach. Shop and Shipyard, Inc., B-258563; B-259265, Jan. 31, 1995, 95-1 CPD Para. 56. The use of any particular method of assessing the availability of small businesses is not required so long as the agency undertakes reasonable efforts to locate responsible small business competitors. CardioMetrix, B-261327, Aug. 30, 1995, 95-2 CPD Para. 96. Where, as here, a set-aside is withdrawn, the contracting officer is required to give written notice to the agency's small business specialist and the Small Business Administration (SBA) procurement center representative, if one is assigned, stating the reasons for the withdrawal. FAR Sec.