Hardcore DuPont Composites, L.L.C., B-278371, January 20,

B-278371 Jan 20, 1998 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Contracting agency's determination that small business set-aside offer is reasonably priced is legally unobjectionable where it was based on the agency's comparison of proposed prices received in response to the solicitation. The award price was lower than the protester's initial offer. The system is being procured in support of an intergovernmental agreement between the agency and the Greater New Orleans Expressway Commission. [1] We deny the protest. Which was rated highest and offered the lowest price. Was included in the competitive range. The Corps determined that Lancaster's proposal was the most advantageous to the government and awarded the contract to Lancaster at a price of $1. View Decision Matter of: Hardcore DuPont Composites, L.L.C. File: B-278371 Date: January 20, 1998 DIGEST Attorneys DECISION Hardcore DuPont Composites, L.L.C. protests the award of a firm, fixed-price contract to Lancaster Composites, Inc. under request for proposals (RFP) No. DACW39-97-R-0038, a total small business set-aside, issued by the U.S. Army Corps of Engineers, Waterways Experiment Station, for a composite fender pile system to be installed on both sides of a channel under the Lake Pontchartrain causeway bridge in Louisiana. The system is being procured in support of an intergovernmental agreement between the agency and the Greater New Orleans Expressway Commission. [1] We deny the protest. The Corps received six proposals, including Hardcore's and Lancaster's. As a result of the ensuing technical evaluation, Hardcore's proposal, which was rated highest and offered the lowest price, was included in the competitive range, along with two other acceptable proposals, including Lancaster's. In considering Hardcore for award, the contracting officer sought a size determination from the Small Business Administration (SBA) regarding Hardcore's status as a small business. SBA determined that Hardcore did not qualify as a small business for purposes of the procurement and the Corps did not further consider that firm's proposal for award. The contracting officer proceeded to conduct discussions with the remaining eligible offerors in the competitive range, including Lancaster. Hardcore referenced these discussions in an unsolicited letter to the contracting officer in which Hardcore revised its overall price downwards from its initial proposal price of $1,313,496.42 to $1,134,462.42 "to provide the Army Corps the greatest value and ability to determine 'fair market value' without a formal government estimate." Following receipt of best and final offers from the remaining offerors, the Corps determined that Lancaster's proposal was the most advantageous to the government and awarded the contract to Lancaster at a price of $1,298,984.48. Hardcore essentially contends that the contract was not awarded to Lancaster under the set-aside at a fair market price and that the set-aside should be withdrawn. In this regard, Hardcore argues that, in the absence of a government estimate, the contracting officer failed to properly perform the required price analysis by failing to give any weight to Hardcore's reduced price as a reliable indicator of fair market price. According to Hardcore, its revised price is 14.5 percent lower than Lancaster's price, and this difference is amplified by the technical superiority of Hardcore's system. Hardcore seeks resolicitation of the requirement on an unrestricted basis. Under Federal Acquisition Regulation (FAR) Sec. 19.506(a), a contracting officer may withdraw a set-aside before award if he or she determines that award to a small business concern would be detrimental to the public interest because, for example, the award would be at more than fair market price. The contracting officer has discretion to determine price reasonableness in a small business or other set-aside, and we will not disturb such a determination unless it is unreasonable. A. Hirsh, Inc., B-271829, July 26, 1996, 96-2 CPD Para. 55 at 2. In making a determination of price reasonableness in this context, the contracting officer may, among other things, perform a comparison of proposed prices received in response to the solicitation, including prices submitted by an otherwise ineligible large business. Id.; FAR Sec. 19.202-6(a), 15.805-2 (June 1997). However, in view of the congressional policy favoring small businesses, contracts may be awarded under small business set-aside procedures to small business firms at premium prices, so long as those prices are not unreasonable. Vitronics, Inc., 69 Comp.Gen. 170, 171 (1990), 90-1 CPD Para. 57 at 2, aff'd, B-237249.2, 90-1 CPD Para. 391.