B-298201.2, Veteran Enterprise Technology Services, LLC, July 13, 2006

B-298201.2 Jul 13, 2006 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Veteran Enterprise Technology Services, LLC (VETS) protests the Department of the Army's decision to permit Wexford Group International, Inc. (WGI) to continue performing a contract awarded under request for proposals (RFP) No. W9124Q-06-R-0002, issued as a service-disabled veteran-owned (SDVO) small business set-aside, for support services for the Rapid Equipping Force (REF). VETS contends that the Army must terminate the contract because the Small Business Administration (SBA) has determined that WGI is not an SDVO small business concern. We deny the protest. View Decision B-298201.2, Veteran Enterprise Technology Services, LLC, July 13, 2006 Decision Matter of: Veteran Enterprise Technology Services, LLC File: B-298201.2 Date: July 13, 2006 Marc Goldschmitt for the protester. Capt. Peter G. Hartman, Department of the Army, for the agency. Peter D. Verchinski, Esq., and John M. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Agency is not required to terminate contract awarded under service-disabled veteran-owned (SDVO) small business set-aside, despite Small Business Administration's determination in response to SDVO protest that awardee was not an SDVO concern, where agency awarded contract after making a reasonable urgency determination, as allowed by the Federal Acquisition Regulation. DECISION Veteran Enterprise Technology Services, LLC (VETS) protests the Department of the Army's decision to permit Wexford Group International, Inc. (WGI) to continue performing a contract awarded under request for proposals (RFP) No. W9124Q-06-R-0002, issued as a service-disabled veteran-owned (SDVO) small business set-aside, for support services for the Rapid Equipping Force (REF). VETS contends that the Army must terminate the contract because the Small Business Administration (SBA) has determined that WGI is not an SDVO small business concern. We deny the protest. On February 7, 2006, the Army issued the RFP to acquire various support services, including management, operations, logistical, administrative, and project support, for the REF, which develops strategies and methodologies to swiftly introduce material innovations into the Army. The Army received several proposals, including VETS's and WGI's, and ultimately selected WGI for award. On March 10, the contracting officer determined that award should be made without delay,[1] and thus executed a written determination, pursuant to Federal Acquisition Regulation (FAR) sect. 15.503(a)(2)(iii), that urgency necessitated award to WGI without providing the other offerors the required pre'award notice of the intended awardee.[2] Shortly thereafter, the Army made award to WGI. Upon learning of the award, VETS filed a protest with the Army (which forwarded the allegations to SBA) challenging WGI's SDVO and small business size status. On April 26, SBA held that WGI did not qualify as an SDVO small business.[3] On the basis of that determination, VETS requests that our Office recommend that the Army terminate WGI's contract and make award to VETS.[4] The Army takes the position that, since it properly proceeded with the award following an urgency determination, and VETS's SDVO status protest was not filed until after award, SBA's determination applies to future procurements only. We agree with the Army. SBA's regulations regarding SDVO small business protests are found at 13 C.F.R. sect. 125.24-28. Section 125.27(g) of those regulations describes the effect of an SBA determination on SDVO status as follows: (g) Effect of determination. SBA's determination is effective immediately and is final unless overturned by OHA on appeal. If SBA sustains the protest, and the contract has not yet been awarded, then the protested concern is ineligible for an SDVO SBC [(small business concern)] contract award. If a contract has already been awarded, and SBA sustains the protest, then the contracting officer cannot count the award as an award to an SDVO SBC and the concern cannot submit another offer as an SDVO SBC on a future SDVO SBC procurement unless it overcomes the reasons for the protest (e.g., it changes its ownership to satisfy the definition of an SDVO SBC set forth in sect. 125.8). The regulation thus explicitly differentiates between a determination's effect when issued before versus after award. Specifically, while the regulation expressly states that SBA's determination affects the current solicitation if award has not been made at the time of the determination--it precludes award to the protested firm--it does not similarly provide for termination if award has already been made.