B-299407, International Filter Manufacturing, Inc., April 10, 2007

B-299407 Apr 10, 2007 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights International Filter Manufacturing Corp. (IFM) protests the decision of the Defense Logistics Agency, Defense Supply Center Columbus (DSCC) to issue requests for quotations (RFQ) No. SPM7M0-07-Q-0194 for part kits on an unrestricted basis rather than as a historically underutilized business zone (HUBZone) set-aside. We deny the protest. View Decision B-299407, International Filter Manufacturing, Inc., April 10, 2007 Decision Matter of: International Filter Manufacturing, Inc. File: B-299407 Date: April 10, 2007 William Blakely, Esq., and Lauren P. DeSantis-Then, Esq., Polsinelli Shalton Welte Suelthaus PC, for the protester. Michael Walters, Esq., and Matthew Geary, Esq., Defense Logistics Agency, and John W. Klein, Esq., and Kenneth Dodds, Esq., Small Business Administration, for the agencies. Sharon L. Larkin, Esq., and James A. Spangenberg, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that agency should have issued a solicitation for part kits as a set-aside for historically underutilized business zone (HUBZone) small business concerns is denied, where the acquisition was below the simplified acquisition threshold and thus was not required to be set aside for HUBZone small business concerns; in any case, the agency's market research did not reveal that the agency could reasonably anticipate receiving offers from two or more HUBZone small business concerns. DECISION International Filter Manufacturing Corp. (IFM) protests the decision of the Defense Logistics Agency, Defense Supply Center Columbus (DSCC) to issue request for quotations (RFQ) No. SPM7M0-07-Q-0194 for part kits on an unrestricted basis rather than as a historically underutilized business zone (HUBZone) set-aside. We deny the protest. IFM is a small disadvantaged, woman-owned, minority-owned, HUBZone business concern that manufactures filters and assembles part kits. In the past, IFM has provided fluid pressure filter part kits to the agency that included its manufactured filters under a HUBZone set-aside contract. The contract was set aside for HUBZone contractors because the filter, which constituted a large portion of the kit, was manufactured by HUBZone small business concerns, including IFM. The RFP sought 2,970 fluid pressure filter part kits, National Stock Number (NSN) 4330'01'495-6900. The kit was comprised of the same group of 20 NSNs as under the previous HUBZone set'aside contract, except that the filter was now going to be provided by the agency as –government furnished material.— The acquisition was issued on the basis of urgency, pursuant to the special emergency procurement authority (SEPA) granted in 41 U.S.C. sect. 428a (Supp. IV 2004). This statute provides emergency authority to procure property or services –in support of a contingency operation,— which is defined elsewhere as a –military operation . . . in which members of the armed forces are or may become involved in military actions, operations, or hostilities against an enemy of the United States.— 41 U.S.C. sect. 428a(a)(1); see 10 U.S.C. sect. 101(a)(13) (2000). The SEPA statute also increased the simplified acquisition threshold for any awarded contract to $250,000. 41 U.S.C. sect. 428a(b)(2)(A). The agency invoked SEPA here because the kit is the –number one backordered item in the DSCC Maritime Supply Chain— and, of these pending backorders, 52 percent are needed to support urgent requirements in Southwest Asia (Iraq, Kuwait, and Afghanistan), and because the estimated value of this proposed acquisition was $249,925.50. Contracting Officer's Statement at 1. Before issuing the RFQ on an unrestricted basis, the agency considered whether this acquisition should have been set aside for small business or HUBZone concerns. The agency requested that the small business programs office at the Defense Supply Center Philadelphia (DSCP) examine the procurement history of the NSNs listed on a drawing of the kit to determine whether any of the NSNs had been manufactured by small businesses or HUBZone small business concerns. Of the 19 NSNs listed (excluding the filter), DSCP determined that 3 had been previously provided by small businesses, 1 had been previously provided by HUBZone small businesses, and the remaining 15 had been provided by large businesses. Id. at 2; Agency Report, Tab 3, DSCP Analysis. The contracting officer's supervisor analyzed DSCP's results using the standard unit price list for the NSNs that make up the kit and determined that only 5 percent of the cost of the NSNs in the kit were procured from HUBZone small business concerns, and 15 percent of the costs were procured from small businesses. Contracting Officer's Statement at 3.