B-299342, Alliance Detective & Security Service, Inc., April 13, 2007

B-299342 Apr 13, 2007 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Alliance Detective & Security Service, Inc. protests the award of two contracts to C&D Security Management, Inc. under request for proposals (RFP) Nos. HSCEBW-06-R-F00005 and HSCEBW-06-R-F00006, issued as small business set‑asides by the Department of Homeland Security (DHS), Immigration and Customs Enforcement, for guard services in Massachusetts, Rhode Island, and Connecticut. Alliance contends that C&D's contracts should be terminated because the Small Business Administration (SBA) has determined that C&D is not a small business concern. We sustain the protest. View Decision B-299342, Alliance Detective & Security Service, Inc., April 13, 2007 Decision Matter of: Alliance Detective & Security Service, Inc. File: B-299342 Date: April 13, 2007 Mary Ann Chase, Esq., for the protester. Kenneth B. Weckstein, Esq., Epstein Becker & Green, P.C., for C&D Security Management, Inc., an intervenor. Scarlett D. Grose, Esq., Department of Homeland Security, and John W. Klein and Kenneth Dodds, Small Business Administration, for the agencies. Nora K. Adkins, Esq., and James Spangenberg, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST In the absence of any countervailing reasons, agency should not exercise options under contracts set aside for small business concerns, where award was improperly made before referring pre-award size protests to the Small Business Administration (SBA) and to a firm that has been determined to be other than a small business by the SBA, and where the agency lifted a stay on contract performance, even though performance was not to commence for 3 months, it had been apprised of the SBA size protest, and all evidence indicated that the awardee was a large business. DECISION Alliance Detective & Security Service, Inc. protests the award of two contracts to C&D Security Management, Inc. under request for proposals (RFP) Nos. HSCEBW-06-R-F00005 and HSCEBW-06-R-F00006, issued as small business set'asides by the Department of Homeland Security (DHS), Immigration and Customs Enforcement, for guard services in Massachusetts, Rhode Island, and Connecticut.[1] Alliance contends that C&D's contracts should be terminated because the Small Business Administration (SBA) has determined that C&D is not a small business concern. We sustain the protest. The RFPs were issued on April 4, 2006, as small business set-asides, with proposals due on May 19, 2006. The RFPs designated North American Industry Classification System (NAICS) code 561612 –Security Guards and Patrol Services,— which has an average annual revenue ceiling of $11.5 million, as the appropriate size standard for small business participation.[2] RFPs sect. A, at 3. The base term of the contracts originally was from December 1, 2006 through November 30, 2007, with four yearly options. RFPs, amend. 1, at 3. DHS received 21 proposals in response to the RFPs, and C&D's proposal was determined to be the best value under each of the RFPs. On September 20, the contracting officer sent, via e-mail to all offerors, a notice of intent to award the contracts to C&D. The notice informed offerors that they had the opportunity to challenge the small business size status of C&D and that [t]he protest may be made orally, but must be confirmed in writing and shall contain the basis for the protest with specific, detailed evidence to support the allegation that C&D . . . is not a small business. Agency Report (AR), Tab A, Notice of Intent to Award, at 1. On September 22, DHS received an e-mail with two attachments from American Sentry, LLC, an offeror under both RFPs, questioning C&D's small business status. The attachments included calculations suggesting that C&D's revenues exceeded $11.5 million, an article from The Colorado Spring Business Journal posted on C&D's website that provided information regarding C&D's growth in the security firm services area, and a request that the contracting officer review this information. AR, Tab B, American Sentry E'mail to Contracting Officer. The contracting officer did not interpret this correspondence as an official protest and did not forward it to the SBA. Contracting Officer's Statement (COS) at 1. On September 25, American Sentry again contacted the contracting officer, via telephone, to determine if she had reviewed the information and C&D's website. During the conversation, the contracting officer asked whether American Sentry was protesting C&D's size based on the information provided. American Sentry replied affirmatively, and on September 29 submitted a written protest letter –formally, clearly, and unequivocally challenging the size of— C&D. Id.; AR, Tab F, American Sentry Size Protest. Meanwhile, on September 27, DHS received what it considered to be a written size protest from Alliance, another offeror under the RFPs. COS at 2.