Schwegman Constructors and Engineers, Inc.

B-272223 Aug 28, 1996 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Protest challenging solicitation's inclusion of evaluation preference for small disadvantaged business concerns in construction acquisitions pursuant to Department of Defense test program on ground that the preference contravenes the Small Business Competitiveness Demonstration Program (SBCDP) Act's mandate for full and open competition is denied. Since the evaluation preference does not limit the sources that are permitted to compete. General Accounting Office will not consider allegation that evaluation preference for small disadvantaged business concerns in construction acquisitions pursuant to Department of Defense test program is unconstitutional in light of Adarand Constructors. Schwegman contends that the solicitation's inclusion of an evaluation preference for small and disadvantaged business (SDB) concerns is improper. View Decision Matter of: Schwegman Constructors and Engineers, Inc. File: B-272223 Date: August 28, 1996 Protest challenging solicitation's inclusion of evaluation preference for small disadvantaged business concerns in construction acquisitions pursuant to Department of Defense test program on ground that the preference contravenes the Small Business Competitiveness Demonstration Program (SBCDP) Act's mandate for full and open competition is denied; since the evaluation preference does not limit the sources that are permitted to compete, the competition remains "full and open" and does not violate the SBCDP Act. General Accounting Office will not consider allegation that evaluation preference for small disadvantaged business concerns in construction acquisitions pursuant to Department of Defense test program is unconstitutional in light of Adarand Constructors, Inc. v. Pena and City of Richmond v. Croson Co. because neither decision constitutes clear judicial precedent on the constitutionality or legality of this test program and its evaluation preference. Attorneys DECISION Schwegman Constructors and Engineers, Inc. protests the terms of invitation for bids (IFB) No. F22600-96-B-0031, issued by the Department of the Air Force to replace chillers at Keesler Air Force Base, Mississippi. Schwegman contends that the solicitation's inclusion of an evaluation preference for small and disadvantaged business (SDB) concerns is improper. We deny the protest. In Adarand Constructors, Inc. v. Pena, 115 S.Ct. 2097 (1995), the Supreme Court held that racial classifications must be subject to strict scrutiny and must serve a compelling governmental interest and be narrowly tailored to further that interest. The Department of Defense (DOD) subsequently suspended those sections of the Defense Federal Acquisition Regulation Supplement (DFARS) which prescribed the set-aside of acquisitions for SDB concerns in order to take account of the Adarand decision while an interagency government-wide review of affirmative action programs was conducted. 60 Fed. Reg. 54,954 (Oct. 27, 1995). On April 29, 1996, DOD issued its final rule amending the DFARS to implement initiatives designed to facilitate awards to SDB concerns in consideration of the Adarand decision. 61 Fed. Reg. 18,686 (Apr. 29, 1996). Relevant to this protest, DOD established a test program to ensure that offers from SDB concerns would be given an evaluation preference in most construction acquisitions whose value exceeds the simplified acquisition threshold. Id. at 18,688. Under the test program, set forth at DFARS Subpart 219.72, offerors are required to separately state their bond costs where a solicitation requires bonding. Offers will first be evaluated on the basis of total price. If the apparently successful offeror is an SDB concern, no preference will be applied. If the apparently successful offeror is not an SDB concern, offers will be evaluated based upon total price minus bond costs. If, after the exclusion of bond costs, the apparently successful offeror is an SDB concern, bond costs will be added back to all offers, and SDB concerns will be given an evaluation preference by adding a factor of 10 percent to the total price of all other offers. The clause at DFARS Sec. 252.219-7008, which explains this procedure, is to be included in all solicitations to which the test program applies. On May 6, the Air Force issued this solicitation as an unrestricted procurement. The work to be performed is classified as construction work with a value in excess of $25,000. After amendment No. 0001 was issued to incorporate the clause at DFARS Sec. 252.219-7008 into the solicitation, Schwegman filed this protest. Schwegman principally argues that the solicitation's inclusion of the clause violates the Small Business Competitiveness Demonstration Program (SBCDP) Act of 1988, 15 U.S.C. Sec.