BFI Medical Waste Systems of Arizona, Inc.

B-270881 May 10, 1996 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Protest of decision to set a procurement aside for small businesses is sustained where the record does not support the agency's determination that there was a reasonable expectation of bids from at least two responsible small businesses. Federal Acquisition Regulation (FAR) Sec. 19.502 requires that a solicitation be set aside for small business participation when there is a reasonable expectation that offers will be obtained from at least two responsible small business concerns. That award will be made at a fair market price. IHS set the procurement aside after the IHS small and disadvantaged business utilization specialist (SADBUS) and the contracting officer agreed that a set-aside was warranted under the FAR criteria. View Decision Matter of: BFI Medical Waste Systems of Arizona, Inc. File: B-270881 Date: May 10, 1996 Protest of decision to set a procurement aside for small businesses is sustained where the record does not support the agency's determination that there was a reasonable expectation of bids from at least two responsible small businesses. Attorneys DECISION BFI Medical Waste Systems of Arizona, Inc., protests the decision by the Phoenix Area Office of the Indian Health Service (IHS), Department of Health & Human Services (HHS), to set aside for small businesses invitation for bids (IFB) No. 5015 for the collection and disposal of medical waste. We sustain the protest. Federal Acquisition Regulation (FAR) Sec. 19.502 requires that a solicitation be set aside for small business participation when there is a reasonable expectation that offers will be obtained from at least two responsible small business concerns, and that award will be made at a fair market price. IHS set the procurement aside after the IHS small and disadvantaged business utilization specialist (SADBUS) and the contracting officer agreed that a set-aside was warranted under the FAR criteria. IHS mailed out 11 copies of the solicitation and received two bids in response, one from a small business, Arizona Medical Waste Management, Inc. ($152,496 total for a base year and 4 option years), and one from an ineligible large business ($230,828 total). BFI, which timely protested before bids were opened, argues that IHS made virtually no initial effort to determine whether the criteria in the FAR for a set-aside were met, and did not investigate the matter even after BFI raised the issue with the contracting officer. [1] BFI argues that a proper investigation in fact would have shown that a set-aside was not appropriate. BFI also maintains that Arizona Medical--the only small business to have responded to the IFB--cannot be found a responsible concern because some of the medical waste will have to be disposed of by incineration, which the firm is not equipped to do. As a general rule, the decision whether to set aside a particular procurement is within the discretion of the contracting agency. York Int'l Corp., B-244748, Sept. 30, 1991, 91-2 CPD para. 282. However, an agency must undertake reasonable efforts to ascertain whether it is likely that the agency will receive offers from at least two small businesses capable of performing the work. Library Sys. & Servs./Internet Sys., Inc., B-244432, Oct. 16, 1991, 91-2 CPD para. 337. There is no particular method prescribed for assessing the availability of small businesses, although we have recognized it appropriate to refer to factors such as prior procurement history, nature of the contract, type of contract, market surveys, and/or advice from the agency's technical specialists. See FKW Inc., B-249189, Oct. 22, 1992, 92-2 CPD para. 270. Our Office will object to a set-aside decision that does not have a reasonable basis. York Int'l Corp., supra. We agree with BFI that the record in this case does not support the set-aside. The record includes only three agency comments concerning the determination to restrict the procurement. In the protest report, HHS states: "[T]he contracting officer conferred with the IHS small and disadvantaged business utilization specialist, who had personal knowledge of other medical waste disposal contracts in the state being performed by small businesses.