Intermark, Inc., B-290925, October 23, 2002

B-290925 Oct 23, 2002 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Which is not a small business concern. Agency is required to consult with Secretary of Education with a view to making award to SLA under the RSA if its proposal is in competitive range. There is no basis for eliminating the set-aside altogether. Since agency can serve the purpose of the RSA by issuing a solicitation that is generally restricted to small businesses but also provides for participation by the SLA in the procurement. Is the incumbent contractor. Since the SLA was. Not a small business because it is not an entity operated for profit. The agency concluded that it was required to withdraw the small business set-aside. Because the requirements for a small business set-aside were met. View Decision Intermark, Inc., B-290925, October 23, 2002 DIGEST Attorneys DECISION Intermark, Inc. protests the terms of request for proposals (RFP) No. DABT01-02-R-0003, issued by the Department of the Army to acquire full food services at Fort Rucker, Alabama. Intermark maintains that the agency has improperly issued the solicitation on an unrestricted basis rather than as a small business set-aside. We sustain the protest. The agency has in the past procured this requirement using small business set-aside procedures and Intermark, a small business, is the incumbent contractor. On February 21, 2002, the Army issued a presolicitation notice indicating that the requirement would again be satisfied using small business set-aside procedures. Subsequent to this initial notice, however, the Randolph-Sheppard Act (RSA) State Licensing Agency (SLA) /1/ for the State of Alabama received notice of the requirement, and expressed interest in competing for the contract. Since the SLA was, by definition, not a small business because it is not an entity operated for profit, see 13 C.F.R. Sec. 121.105(a) (2002), the agency concluded that it was required to withdraw the small business set-aside, and issue the solicitation using full and open competitive procedures, in order to permit the SLA to compete. On June 4, the agency issued the RFP on an unrestricted basis. This protest followed. Intermark maintains that the agency improperly issued the solicitation on an unrestricted basis because the requirement had previously been successfully fulfilled using a small business set-aside, and because the requirements for a small business set-aside were met--the agency reasonably could anticipate receiving proposals at fair market prices from at least two responsible small businesses. Intermark notes that Federal Acquisition Regulation (FAR) Sec. 19.502-2 states that an agency "shall" set aside an acquisition under these circumstances. The agency does not dispute that the conditions under which a small business set-aside normally is required are present; rather, it argues only that, because the RSA requires that it afford the SLA an opportunity to compete, and because the SLA is not a small business, it cannot set the acquisition aside. We agree with the protester that there was no proper basis for withdrawing the small business set-aside here. Although the preference embodied in the RSA takes precedence over small business preferences, see Department of the Air Force--Recon., B-250465.6 et al., June 4, 1993, 93-1 CPD Para. 431 at 13; see also Automated Communication Sys., Inc. v. United States, 49 Fed. Cl. 570, 578 (2001), the small business set-aside here need not be eliminated altogether in order to give effect to the RSA. Rather, we see no reason why the solicitation cannot be fashioned to accommodate both preferences. This approach is consistent with the Court of Federal Claims' (COFC) recent decision in Automated Communication. Sys., Inc. v. United States, supra, in which the court considered the interrelationship between the preferences afforded by the RSA and the Historically Underutilized Business Zone (HUBZone) Act, 15 U.S.C. Sec. 657a (2000); FAR subpart 19.13. The court stated: There is no "conflict" requiring the [contracting officer] to reconcile competing provisions. [The protester] will receive the [10 percent] price preference to which it is entitled [as a qualified HUBZone concern], and should [the SLA] submit a bid and the [contracting officer] decide to conduct negotiations, the [SLA] will be given its priority should it qualify for the competitive range. Contrary to [the protester's] contentions, the preferences are not incompatible. Each preference can be given its due. The fact that the RSA preference or priority, if triggered, is superior to the others, does not mean that the various preferences conflict. The fact that one preference is of greater value than the others does not mean that each cannot be fully applied before the contract award is made. The court finds that such is the case here, and there is no inherent conflict between the competing preferences. Id. at 578.