CardioMetrix, B-276912; B-276912.2, August 11, 1997

CardioMetrix, B-276912; B-276912.2, August 11, 1997 BNUMBER: B-276912; B-276912.2 DATE: August 11, 1997 TITLE: CardioMetrix, B-276912; B-276912.2, August 11, 1997 ********************************************************************** Matter of:CardioMetrix File: B-276912; B-276912.2 Date:August 11, 1997 Robert J. Loring, Ph.D. for the protester. Jan Rich, for CorVel Corp., an intervenor. Ann L. Chaney, Esq., and Henry Valiulis, Railroad Retirement Board, for the agency. Mary G. Curcio, Esq., and John M. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Contracting agency's determination not to set aside procurement for small business concerns was proper where, based on the procurement history for the solicited services, agency concluded that it could not reasonably expect to receive bids from at least two responsible small business concerns offering a fair market price. 2. Solicitation requirement that contractor provide additional medical examiners in cases where a claimant must travel more than 50 miles to an appointment is not improper where requirement reflects the agency's legitimate needs, even though costing the requirement for proposal purposes may be difficult for offerors, resulting in significant contractor risk. DECISION CardioMetrix protests certain terms of solicitation No. 97-B-2, issued by the Railroad Retirement Board (RRB) for disability examination services on a fixed-price, indefinite-quantity basis. CardioMetrix principally asserts that the solicitation should have been set aside for exclusive small business participation. We deny the protest. SET-ASIDE DECISION An acquisition of services over $100,000, such as the one at issue here, is required to be set aside for small business concerns where the contracting officer determines that 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 fair market prices. Federal Acquisition Regulation (FAR) sec. 19.502-2(b). Here, the contracting officer's decision not to set the solicitation aside was based on the procurement history for the same services which, he concluded, showed that it was unlikely that at least two small businesses would submit offers at a fair market price. Specifically, this information showed that three small businesses remained in the competitive range after best and final offers were submitted under the prior procurement, but that only one of those firms' offers was at a fair market price (the price was slightly higher than the government estimate). The remaining two offers were more than 50 percent higher than the low small-business offer and the government estimate. The contracting officer also considered that the current solicitation includes greater requirements for electronic data interchange (EDI)[1] and a lower guaranteed minimum dollar award than under the prior solicitation, and, unlike the prior solicitation, provided for award possibly on a regional rather than nationwide basis. Since these factors would require firms to incur the costs of implementing (or upgrading) EDI, and at the same time provide a smaller contract base over which to spread their costs, the contracting officer believed these factors would make it even more difficult for small businesses to offer fair market prices than under the prior solicitation. CardioMetrix takes issue with the agency's investigation into the feasibility of a set-aside. Specifically, it maintains that the agency should have taken additional steps, including attempting to procure a list of potential small businesses from the PASS database, contacting the three small businesses that responded to the earlier solicitation, and conferring with the Small Business Administration (SBA), which has agreed with CardioMetrix that the procurement should be set aside.[2] CardioMetrix also asserts that EDI in fact is cost effective, and that the inclusion of the supposedly too high-priced small business proposals in the competitive range (under the prior solicitation) suggests that they in fact were considered to offer fair market prices. The agency's determination was adequately supported. In determining whether to set aside a procurement for small business concerns, procuring agencies are permitted to rely on any of several types of relevant information, including past procurement history; agencies are not required to use any particular method in making their determination. CardioMetrix, B-256407, May 27, 1994, 94-1 CPD para. 334 at 2-3.