NVT Technologies, Inc., B-292302.3, October 20, 2003

B-292302.3 Oct 20, 2003 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Where the agency reasonably determined that the bonds were necessary to protect substantial and mission-critical infrastructure that will be entrusted by the agency to the contractor in order to perform the contract. NVT is a small business concern currently performing real property management services at an HHS facility in North Carolina. The agency has improperly bundled requirements for real property management services that are currently being performed by small businesses. The RFP was issued on an unrestricted basis on May 15. The amended closing date for receipt of initial proposals was July 29. Protest at 3. /1/ FAR Para. 7.107(e) states as follows: Substantial bundling is any bundling that results in a contract with an average annual value of $10 million or more. View Decision NVT Technologies, Inc., B-292302.3, October 20, 2003 DIGEST Attorneys DECISION NVT Technologies, Inc. protests the terms of request for proposals (RFP) No. 263-03-P(BC)-0044, issued by the Department of Health and Human Services (HHS) pursuant to Office of Management and Budget Circular A-76 and the Circular's Revised Supplemental Handbook, to determine whether it would be more economical to perform a broad range of real property management services in-house at five HHS facilities in the states of Maryland, North Carolina, and Montana, or to contract for these services under the referenced solicitation. NVT is a small business concern currently performing real property management services at an HHS facility in North Carolina. NVT argues that under this RFP, the agency has improperly bundled requirements for real property management services that are currently being performed by small businesses, like itself, and has imposed unreasonable bond requirements which unduly restrict small business participation in this procurement. We deny the protest. The RFP was issued on an unrestricted basis on May 15, 2003. Under the RFP, if a private-sector offeror successfully competed against the government's "most efficient organization," i.e., the government's in-house staffing plan, the agency would award a contract for a 2-year base period and three 1-year option periods. As relevant here, the RFP contained requirements for performance and payment bonds, with each bond having to be in an amount equal to 50 percent of the original contract price. The agency has estimated the annual acquisition value to be $100 million. Contracting Officer's Statement at 4. The amended closing date for receipt of initial proposals was July 29. NVT did not submit a proposal. BUNDLING ISSUE In its protest filed with our Office on July 29, NVT argued that the agency failed to justify its decision to bundle in accordance with the "substantial bundling" analysis required by Federal Acquisition Regulation (FAR) Sec. 7.107(e). Protest at 3. /1/ FAR Para. 7.107(e) states as follows: Substantial bundling is any bundling that results in a contract with an average annual value of $10 million or more. When the proposed acquisition strategy involves substantial bundling, the acquisition strategy must- (1) Identify the specific benefits anticipated to be derived from bundling; (2) Include an assessment of the specific impediments to participation by small business concerns as contractors that result from bundling; (3) Specify actions designed to maximize small business participation as contractors, including provisions that encourage small business teaming; (4) Specify actions designed to maximize small business participation as subcontractors (including suppliers) at any tier under the contract or contracts that may be awarded to meet the requirements; and (5) Include a specific determination that the anticipated benefits of the proposed bundled contract justify its use. /2/ On July 31, the agency sent to the protester a 5-page determination and findings document that was captioned "Documentation of Acquisition Strategy Relating to Substantial Bundling as Required by FAR [Sec.] 7.107(e)." In this document, the agency addressed each provision of FAR Sec. 7.107(e), as set forth above. (This document was executed in May 2003, a few days after the RFP was issued; this document was signed by the contracting officer, the HHS small business specialist, and the Small Business Administration procurement center representative.) By letter dated July 31, the protester advised our Office that the agency "ha[d] satisfied NVT's Document Production Request through the submission of documents on this date." Letter from Protester to GAO, July 31, 2003. On August 29, the agency filed its administrative report, which included a copy of the May 2003 substantial bundling analysis document previously provided to NVT on July 31. The agency pointed out that contrary to NVT's position, the agency did in fact comply with FAR Sec. 7.107(e) by performing a substantial bundling analysis.