EAA Capital Company, LLC, B-282377.2, June 23, 1999

B-282377.2 Jun 23, 1999 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Contracting agency was not required by Federal Acquisition Regulation (FAR) Sec. 19.502-2(a) to issue a purchase order to the protester as the only responsible small business submitting an acceptable quotation where the agency inadvertently set aside the request for quotations for small business and the FAR set-aside provisions do not apply because the requirement does not involve the expenditure of appropriated funds. HUD should have selected EAA and issued it the purchase order for the requirement. The synopsis stated that the requirement would be solicited under simplified acquisition procedures and that no appropriated funds are involved. The synopsis did not specify that the acquisition was set aside for small business. View Decision Matter of: EAA Capital Company, LLC File: B-282377.2 Date: June 23, 1999 DIGEST Attorneys DECISION EAA Capital Company, LLC, protests the Department of Housing and Urban Development's (HUD) issuance, without a small business set-aside, of request for quotations (RFQ) No. TESTING 002 for a National Testing Administrator to provide examinations to Federal Housing Administration (FHA) real estate appraisers in all 50 states and U.S. territories. /1/ HUD issued the RFQ without a small business set-aside after it determined that it had inadvertently set aside the identical requirement in an earlier RFQ (No. TESTING 001), following EAA's earlier protest of HUD's selection of Sylvan Prometric, a large business, to be the National Testing Administrator. The protester contends that as the only responsible small business submitting an acceptable quotation under RFQ No. TESTING 001, HUD should have selected EAA and issued it the purchase order for the requirement. We deny the protest. On February 5, 1999, HUD synopsized its requirement for the National Testing Administrator in the Commerce Business Daily. The synopsis stated that the requirement would be solicited under simplified acquisition procedures and that no appropriated funds are involved. The synopsis did not specify that the acquisition was set aside for small business. HUD issued RFQ No. TESTING 001 on February 24. The RFQ cover form was marked to indicate that the requirement was set aside for small business. The cover form also stated that the value of the requirement was anticipated to be under $100,000. The RFQ included a "Notice of Small Business-Small Purchase Set-Aside," which informed vendors that quotations were solicited from small business concerns only and that quotations received from concerns that were not small businesses would not be considered. The RFQ explained that the contract would be funded from the fees to be charged the test takers by the National Test Administrator, with no expenditure of government funds involved. The RFQ listed the following evaluation criteria: the frequency the vendor offered the examination (dates and times); the vendor's capability to administer the FHA appraisal testing on a national basis; the number and location of the vendor's testing centers; the frequency and duration of the vendor's test advertising methodology; and the registration methods to be used by the vendor. The RFQ also listed as evaluation criteria the reasonableness of the vendor's proposed fees to be paid by the test takers. Under the RFQ's evaluation scheme, the vendor's proposed fees were considered of secondary importance to the technical factors. Two vendors--the protester and Sylvan--submitted quotations by the RFQ's March 2 due date. In a letter dated March 22, HUD informed the protester that it had issued a purchase order for the requirement to Sylvan "based upon the highest technical evaluation with cost being secondary." Protest, exh. 6. On March 25, EAA filed protests with the contracting officer, the Small Business Administration (SBA) and our Office against HUD's issuance of the purchase order to Sylvan. EAA contended that Sylvan should not have been selected because its affiliation with a large business rendered it ineligible for award under the RFQ's small business set-aside provision. Our Office dismissed EAA's protest on March 30, on the basis that the Small Business Act gives the SBA, not our Office, the conclusive authority to determine matters of small business size status for federal procurements. In response to EAA's March 25 protests, the contracting officer realized that the RFQ had been issued erroneously as a small business set-aside. According to the contracting officer, the requirement was never intended to have been restricted to small business because a market survey had revealed that no small business could provide the services required. Agency Report, exh. 9., Summary of Procurement Actions, at 1st unnumbered page. The contracting officer canceled the purchase order with Sylvan and on April 15 issued a replacement RFQ (No.