B-400163, Commonwealth Home Health Care, Inc., July 24, 2008

B-400163 Jul 24, 2008 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Commonwealth Home Health Care, Inc. protests the terms of request for proposals (RFP) No. VA-247-08-RP-0160, issued by the Department of Veterans Affairs (VA) for supplies and services supporting the provision of oxygen to veterans in Decatur, Georgia and the surrounding area. Commonwealth argues that the solicitation was improperly restricted to small business concerns and was improperly categorized as a "supply" contract, as opposed to a contract for "services." We deny the protest. View Decision B-400163, Commonwealth Home Health Care, Inc., July 24, 2008 Decision Matter of: Commonwealth Home Health Care, Inc. File: B-400163 Date: July 24, 2008 Robert A. Giannini for the protester. Harold W. Askins III, Esq., Department of Veterans Affairs, for the agency. Edward Goldstein, Esq., and Christine S. Melody, Esq., Office of General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that agency improperly set aside procurement for small business concerns is denied where the agency performed market research and reasonably concluded that adequate small business competition could be expected. DECISION Commonwealth Home Health Care, Inc. protests the terms of request for proposals (RFP) No. VA-247-08-RP-0160, issued by the Department of Veterans Affairs (VA) for supplies and services supporting the provision of oxygen to veterans in Decatur, Georgia and the surrounding area. Commonwealth argues that the solicitation was improperly restricted to small business concerns and was improperly categorized as a –supply— contract, as opposed to a contract for –services.— We deny the protest. Commonwealth is the incumbent VA contractor providing home oxygen to veterans in the Decatur, Georgia area. The RFP provides for the award of a requirements contract to provide oxygen and rental oxygen equipment for a base year with 4 option years. In addition to the supply of oxygen and rental equipment, the contractor is to provide a variety of services, including equipment delivery and set-up, patient education, re-supply, emergency services (for delivery of oxygen), and reporting. RFP, Statement of Work, at 13-25. The VA states that it initially issued the RFP on an unrestricted basis. Subsequently, another firm filed a protest challenging the VA's issuance on an unrestricted basis of a similar solicitation for home oxygen in the area of Atlanta, Georgia; that protest prompted the VA to take corrective action in the form of conducting new market research to determine the potential for small business competition. See Eagle Home Medical Corp.--Costs, B-299821.3, Feb. 4, 2008, 2008 CPD para. 41. The contracting officer in this case then decided to conduct market research to gauge the potential for small business competition in the procurement at issue here, which included reviewing relevant small business databases, researching and contacting firms, and obtaining advice from the agency's Office of Small Disadvantaged Business Utilization. As a result of those efforts, the agency identified numerous small business firms which it believed were capable of meeting the solicitation requirements. The contracting officer subsequently re-issued the solicitation as a total small business set'aside, under NAICS Code 532291--Home oxygen equipment, with a size standard of $6.6 million. The agency also designated the solicitation as one for supplies, as opposed to services, thereby invoking the Small Business Act's –non-manufacturer rule.—[1] The record reflects that in making its set-aside determination, the agency specifically considered the impact of the non-manufacturer rule on the pool of potential small business competitors. Agency Report (AR), Tab 1, Contracting Officer's Statement; AR, Tab 4, Small Business Research. Commonwealth filed its protest challenging the set-aside decision and designation of the requirements as –supplies— prior to the solicitation closing date of May 30, 2008. Subsequently, the agency received offers from six small business concerns in response to the solicitation. Under Federal Acquisition Regulation (FAR) sect. 19.502-2(b), a procurement with an anticipated dollar value of more than $100,000, such as the one here, must be set aside for exclusive small business participation when there is a reasonable expectation that offers will be received from at least two responsible small business concerns and that award will be made at a fair market price. 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 small business competitors. National Linen Serv., B-285458, Aug. 22, 2000, 2000 CPD para. 138 at 2.