AeroSage, LLC

B-414917 Oct 17, 2017 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights AeroSage, LLC, a service-disabled veteran-owned small business of Tampa, Florida, protests the terms of request for proposals (RFP) No. SPE600-17-R-0220, issued by the Defense Logistics Agency (DLA) for the supply of fuels to various installations and facilities in the Northeastern region of the United States. The protester argues that DLA improperly failed to set aside the entire procurement for exclusive small business participation, and that the agency improperly sought a waiver of the small business nonmanufacturer rule from the Small Business Administration (SBA) only for a portion, rather than all, of the solicitation's line items. We deny the protest. We deny the protest. View Decision Decision Matter of:  AeroSage, LLC File:  B-414917 Date:  October 17, 2017 David M. Snyder for the protester. Howard M. Kaufer, Esq., Jared M. Miller, Esq., and Journey L. Beard, Esq., Defense Logistics Agency, for the agency. Gabriel D. Soll, Esq., and Christina Sklarew, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest challenging an agency's decision not to set aside a procurement for small businesses is denied where the agency's market research did not demonstrate that the agency was likely to receive proposals at fair market prices from at least two small businesses capable of performing the required services. DECISION AeroSage, LLC, a service-disabled veteran-owned small business of Tampa, Florida, protests the terms of request for proposals (RFP) No. SPE600-17-R-0220, issued by the Defense Logistics Agency (DLA) for the supply of fuels to various installations and facilities in the Northeastern region of the United States. [1]  The protester argues that DLA improperly failed to set aside the entire procurement for exclusive small business participation, and that the agency improperly sought a waiver of the small business nonmanufacturer rule from the Small Business Administration (SBA) only for a portion, rather than all, of the solicitation's line items. We deny the protest. BACKGROUND DLA issued the RFP on June 21, 2017 as a combined synopsis/solicitation under the commercial item provisions of Federal Acquisition Regulation (FAR) part 12.  RFP at 1, 56.  The RFP seeks proposals to deliver various types of fuel to Department of Defense and civilian agency customers in the Customer Organized Group 2 (COG 2) program, which consists of locations in Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont.  Agency Report (AR), at 2. [2]  The RFP includes over 600 contract line item numbers (CLINs), each of which is for a type of fuel to be a delivered to a specific location.  Id.  The agency assigned North American Industry Classification System (NAICS) code 324110 to the solicitation, which applies to petroleum refineries.  AR, at 2; RFP at 1.  The RFP states that the agency intends to award multiple fixed-price with economic price adjustment requirements contracts with an ordering period of three and one-half years.  RFP at 3, 76.  The total estimated value of all CLINs is $265.5 million.  AR at 1. In October, 2016, DLA states that it conducted market research to determine the availability of small businesses to fulfill the requirement.  Supp. AR, at 2.  The agency issued a sources-sought notice seeking capability statements from small businesses that either manufacture or supply the specific fuels required in the States comprising the COG 2.  Id.  DLA received a single response, from a firm that did not represent whether it would supply fuel from a small business refinery.  Id.  After deliberating within the agency and conducting additional internet research, DLA concluded that it could not expect proposals from two or more small businesses capable of providing products manufactured by small business refineries at fair market prices.  Id. at 3.  Based on the market research results, DLA issued the RFP as a partial set aside, reserving for service-disabled veteran-owned small businesses (SDVOSBs) only the CLINs for fuel delivery to the Department of Veterans Affairs (VA) locations.  Id. at 2; RFP at 2.  The agency states that it took this action in consideration of its customer-agency's obligations under the Veterans Benefits, Health Care, and Information Technology Act of 2006 (38 U.S.C. §§ 8127-8128), among other things.  Supp.