B-400157, Logistics Health, Inc., August 13, 2008

B-400157 Aug 13, 2008 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Logistics Health, Incorporated (LHI) protests the terms of request for proposals (RFP) No. W81K04-08-R-0036, a total small business set-aside, issued by the Department of the Army for a dental provider network. LHI, a large business, asserts that the agency improperly restricted the solicitation to small businesses. We deny the protest. View Decision B-400157, Logistics Health, Inc., August 13, 2008 Decision Matter of: Logistics Health, Inc. File: B-400157 Date: August 13, 2008 Tom Walch and Suzanne Witt-Botcher, Esq., for the protester. Maj. William J. Nelson, Department of the Army, for the agency. Paul E. Jordan, Esq., and John M. Melody, Esq., Office of General Counsel, GAO, participated in the preparation of the decision. DIGEST Agency determination to set aside dental services procurement for exclusive small business participation was reasonable where market research identified eight small businesses, at least two of which appeared responsible and capable of performing the contract requirements. DECISION Logistics Health, Incorporated (LHI) protests the terms of request for proposals (RFP) No. W81K04-08-R-0036, a total small business set-aside, issued by the Department of the Army for a dental provider network. LHI, a large business, asserts that the agency improperly restricted the solicitation to small businesses. We deny the protest. The Army operates soldier readiness processing (SRP) stations at mobilization locations throughout the continental United States. The primary purpose of the SRP dental stations is to process and validate the dental readiness of Army Reserve soldiers. Due to facility and personnel constraints, it is necessary to refer some Army and other military service members to civilian providers near the SRP stations. The RFP sought proposals for provision of a dental network to meet these requirements at up to 14 locations and contemplated the award of a fixed-price indefinite-delivery, indefinite-quantity contract for a period of 1 year, with 4 option years. LHI is currently providing a dental network under a sole-source contract, which was awarded in 2006 based on the agency's determination that it was the only responsible source available and that no other services would satisfy the agency's requirements. See Federal Acquisition Regulation (FAR) sect. 6.302'1. LHI protested an earlier solicitation for these services on the basis that it was improperly restricted to service disabled veteran-owned small businesses (SDVOSB). In response to that RFP, the agency received only one proposal--which was non-compliant--and it thus canceled the solicitation; we dismissed the protest as academic (B'310934, Jan. 11, 2008). When the agency reissued the RFP as a small business set-aside, LHI filed this protest challenging the propriety of the set-aside determination. LHI asserts that the set-aside is improper because it believes that there are not two small businesses with demonstrated qualifications or past performance that can provide the services requested at all mobilization site locations. An acquisition with an anticipated dollar value of more than $100,000 must be set aside for small business concerns if the agency determines that there is a reasonable expectation that offers will be received from two or more responsible small business concerns, and that award will be made at a fair market price. FAR sect. 19.502-2(b). The use of any particular method of assessing the availability of small businesses is not required so long as the agency undertakes reasonable efforts to locate responsible potential competitors. National Linen Serv., B-285458, Aug. 22, 2000, 2000 CPD para. 138 at 2. The decision whether to set aside a procurement may be based on an analysis of factors such as prior procurement history, recommendations of appropriate small business specialists, and market surveys that include responses to sources sought announcements. Id.; SAB Co., B'283883, Jan. 20, 2000, 2000 CPD para. 58 at 1-2. Generally, our Office regards such a determination as a matter of business judgment, and we will not disturb that determination absent a clear showing that it was unreasonable. National Linen Serv., supra, at 2. The agency's set-aside determination is unobjectionable. Prior to issuing the RFP, the contracting officer conducted market research using the small business dynamic search of the Central Contractor Registration database. This research revealed--under North American Industry Classification System (NAICS) code No. 621210 (offices of dentists)--two Section 8(a)-certified firms, two small disadvantaged firms, six SDVOSBs, nine veteran owned small businesses, and three woman-owned small businesses. Contracting Officer's Statement paras. 6-7. The contracting officer also posted a request for information (RFI) on the Federal Business Opportunities (FedBizOpps) website.