B-298730, ALATEC Inc., December 4, 2006

B-298730 Dec 08, 2006 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights ALATEC, Inc. protests the award of a contract to The Analysis Group, LLC (TAG) under request for proposals (RFP) No. W91QF4-05-R-0011, a total small business set-aside, issued by the Department of the Army, Fort Leavenworth, Kansas, for engineering and technical support services. ALATEC contends that its and TAG's proposals were unreasonably evaluated, and that TAG's contract should be terminated because the Small Business Administration (SBA) has determined that TAG is not a small business concern. We sustain the protest. View Decision B-298730, ALATEC Inc., December 4, 2006 DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Decision Matter of: ALATEC Inc. File: B-298730 Date: December 4, 2006 Gary L. Rigney, Esq., for the protester. Craig S. King, Esq., and Richard J. Webber, Esq., Arent Fox PLLC, for The Analysis Group, LLC, an intervenor. Capt. John J. Pritchard, Department of the Army, and John W. Klein, Esq., and Laura Mann Eyester, Esq., U.S. Small Business Administration, for the agencies. Charles W. Morrow, Esq., and James A. Spangenberg, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Where the Small Business Administration (SBA) determined, in response to a timely size protest, that the awardee under a procurement set aside for small businesses was other than small after the 10-day period during which the SBA was required to issue the size determination and the agency, therefore, proceeded with award, and there was a stay of contract performance because of a protest to GAO, during which the SBA Office of Hearings and Appeals affirmed that the awardee was other than small, the agency, in the absence of any legitimate countervailing reasons for not taking such action, should have terminated the large business's contract, since to allow the continuation of the contract award by a large business in such circumstances would be inconsistent with the integrity of the procurement system and the Small Business Act. DECISION ALATEC, Inc. protests the award of a contract to The Analysis Group, LLC (TAG) under request for proposals (RFP) No. W91QF4-05-R-0011, a total small business set'aside, issued by the Department of the Army, Fort Leavenworth, Kansas, for engineering and technical support services. ALATEC contends that its and TAG's proposals were unreasonably evaluated, and that TAG's contract should be terminated because the Small Business Administration (SBA) has determined that TAG is not a small business concern. We sustain the protest. The RFP, issued on August 30, 2005 as a small business set-aside, sought proposals for award of an indefinite-delivery/indefinite-quantity contract for engineering and technical support at the United States Army Training and Doctrine Command Analysis Center, White Sands Missile Range, New Mexico. The RFP provided for award of a contract for a 1-year base period beginning in February 2006, with four 1'year option periods, on a best-value basis considering price and four technical evaluation factors: (1) overall technical approach, (2) experience and technical qualifications of personnel, (3) organization and management, and (4) past performance. The Army designated North American Industry Classification System (NAICS) code 541710, –Research and Development in the Physical Engineering, and Life Sciences,— which is a 500-employee size standard, as the appropriate size standard for small business participation. On September 8, 2005, RhinoCorps Limited Company filed an appeal with the SBA Office of Hearings and Appeals (OHA), challenging this NAICS code designation. On October 7, the OHA determined that the assigned NAICS code was inappropriate and that NAICS code 541511, which is a $21 million annual receipts size standard, was applicable to this RFP. While the incumbent contractor, Advanced Systems Technology, Inc. (AST), apparently qualified as a small business concern under NAICS code 541710, it did not qualify as a small business concern under the $21 million annual receipts NAICS code found applicable by the SBA OHA. AST attempted to persuade the OHA to reconsider its determination in October, but in November, the OHA declined to change its determination. AST then challenged the SBA OHA's actions, initially at the United States District Court for the District of Columbia (which dismissed the suit for lack of jurisdiction), and then in the United States Court of Federal Claims (COFC). AST argued to the courts that it had not been permitted to participate in the OHA NAICS appeal. In response, on January 23, 2006, the COFC issued a preliminary injunction enjoining award of a contract under the RFP. Advanced Sys. Tech., Inc. v. United States, 69 Fed. Cl. 474 (2006).