MCI Diagnostic Center, LLC (W81K00-19-Q-1098)

B-417901.3 Mar 25, 2020 Jump To FULL REPORT VIEW DECISION RELATED PAGES GAO CONTACTS Highlights MCI Diagnostic Center, LLC, a service-disabled veteran-owned small business (SDVOSB) of Tulsa, Oklahoma, protests the terms of request for quotations (RFQ) No. W81K00-19-Q-0198, issued by the Department of the Army for blood donor testing services. MCI argues that the solicitation should have been set aside for small businesses. We deny the protest. View Decision Decision Matter of:  MCI Diagnostic Center, LLC File:  B-417901.3 Date:  March 25, 2020 Kathleen Henderson, for the protester. Scott N. Flesch, Esq., Major Wayne T. Branom, Lieutenant Colonel Stephen M. Hernandez, and Robert B. Neill, Esq., Department of the Army, for the agency. Heather Self, Esq., and Edward Goldstein, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest challenging agency’s decision not to set aside a procurement for small businesses is denied because the agency reasonably concluded from its market research that it did not have a reasonable expectation of receiving quotations from two or more small businesses at a fair market price. DECISION   MCI Diagnostic Center, LLC, a service-disabled veteran-owned small business (SDVOSB) of Tulsa, Oklahoma, protests the terms of request for quotations (RFQ) No. W81K00-19-Q-0198, issued by the Department of the Army for blood donor testing services.  MCI argues that the solicitation should have been set aside for small businesses. We deny the protest.  BACKGROUND In June and July of 2019, the agency conducted market research to assess the availability of small business concerns to perform blood donor testing services at government blood donor facilities located at Fort Hood, Texas, and Fort Leonard Wood, Missouri.  The agency’s market research included, among other things, issuance of a sources sought notice to gauge the capability of small businesses to perform the blood donor testing requirements, as well as their interest in performing the work.  Agency Report (AR), Tab 19, Market Research Memorandum, July 16, 2019; Tab 18, Small Business Administration (SBA) Market Search Records, June 10, 2019.  In response to the sources sought notice, the agency received two responses--one from a small business (MCI) and one from a large business.  AR, Tab 19, Market Research Memorandum, July 16, 2019, at 1.[1]  On July 24, 2019, based on the results of its market research, the agency issued the solicitation on an unrestricted basis.  AR, Tab 3, RFQ, at 1.  The solicitation contemplated issuance of a single fixed-price purchase order with a 1-year base period and four 1-year option periods to the lowest-priced technically acceptable vendor.  Id. at 3-13, 22. Following issuance of the RFQ, MCI contacted an SBA Procurement Center Representative to inquire why the RFQ had not been set aside for small businesses; MCI copied the agency on this communication.  Protest, exh. H, E-mail from MCI to SBA, July 26, 2019, at 5-6.  MCI represented that in addition to itself, it was “aware of other small businesses who responded” to the sources sought notice.  Id. at 5.  As a result of MCI’s inquiry, the agency discovered that a second small business--NEO Services, LLC--had submitted a response to the sources sought notice, but its response had been delayed within the agency’s information technology system.  Contracting Officer’s Statement (COS), at 1.  After discovering the second response, the agency conducted additional market research and learned that MCI and NEO appeared to have the same owner or chief executive officer.  COS at 1; AR, Tab 14, Internet Search Records for MCI and NEO, July 29, 2019, at 58, 120.  The record reflects that MCI represented to SBA that it and NEO are “affiliated by co-ownership” and share the same “owner/CEO [Chief Executive Officer],” but indicated that the two firms had separate contract managers, with MCI’s manager located in Tulsa, Oklahoma and NEO’s located in Dallas, Texas.  Protest, exh.H, email from MCI to SBA, Aug. 1, 2019, at 1.  After learning of the affiliation between MCI and NEO, the SBA Procurement Center Representative advised MCI that the agency’s decision not to set aside the procurement was appropriate because the only two small business concerns identified by the market research are commonly owned.  Protest, exh. J, E‑mail from SBA to MCI, Aug. 5, 2019, at 4.  The SBA Procurement Center Representative also advised MCI that the agency’s decision was consistent with a decision issued by our Office, AeroSage, LLC, B-414314, B-414314.2, May 5, 2017, 2017 CPD ¶ 137.  Id.  Following this communication, and prior to the August 26 time set for receipt of quotations, MCI protested the terms of the solicitation to our Office.  See COS at 2; AR, Tab 4, RFQ amend. No.