CDS Services, Inc. (36C25620Q0069)

B-418376.2 Jun 04, 2020 Jump To FULL REPORT VIEW DECISION RELATED PAGES GAO CONTACTS Highlights CDS Services, Inc., of Murrieta, California, a small business, protests the rejection of its quotation and the withdrawal of the agency's decision to set aside the procurement for service-disabled veteran-owned small businesses (SDVOSB) under request for quotations (RFQ) No. 36C25620Q0069, issued by the Department of Veterans Affairs (VA). The agency issued the RFQ for pest control services for four VA outpatient clinics in Mississippi and Florida. CDS argues that the VA unreasonably rejected its quotation on the basis that its price was not fair and reasonable, and failed to award it a contract as provided by applicable regulations. We deny the protest. View Decision DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Decision Matter of:  CDS Services, Inc. File:  B-418376.2 Date:  June 4, 2020 Alan Grayson, Esq., Law Office of Alan Grayson, for the protester. Deborah K. Morrell, Esq., Department of Veterans Affairs, for the agency. Paul N. Wengert, Esq., and Tania Calhoun, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision.  DIGEST Protest that agency improperly withdrew a service-disabled veteran-owned small business set-aside determination is denied, where the agency withdrew the determination because the protester, the only competitor, submitted a price that the agency concluded was not fair and reasonable based on a government estimate that was reasonably supported by the record, and where there is no evidence of bad faith by the agency.  DECISION CDS Services, Inc., of Murrieta, California, a small business, protests the rejection of its quotation and the withdrawal of the agency’s decision to set aside the procurement for service-disabled veteran-owned small businesses (SDVOSB) under request for quotations (RFQ) No. 36C25620Q0069, issued by the Department of Veterans Affairs (VA).  The agency issued the RFQ for pest control services for four VA outpatient clinics in Mississippi and Florida.  CDS argues that the VA unreasonably rejected its quotation on the basis that its price was not fair and reasonable, and failed to award it a contract as provided by applicable regulations.  We deny the protest.  BACKGROUND The RFQ, issued November 27, 2019, sought quotations from SDVOSBs to provide commercial pest control services for a base year and four option years.  The VA received one quotation, from CDS, doing business as Legion Pest Management.  Contracting Officer’s Statement (COS) at 1.  The VA evaluated CDS’s quotation as unacceptable and canceled the RFQ.  After informing CDS of the cancellation, the VA provided the firm a debriefing in which it explained that, even if CDS’s quotation had been acceptable, its price was not fair and reasonable.  Id. at 3.  CDS filed a protest with our Office challenging the VA’s actions, and the VA announced that it would take corrective action.  The January 24, 2020, corrective action announcement indicated that the VA would review the requirement, reissue the solicitation, and negotiate with CDS to enable it to submit a technically acceptable quotation.  Our Office dismissed the protest as academic based on the announced corrective action.  CDS Servs., Inc., B-418376, Jan. 27, 2020 (unpublished decision).  As anticipated by the corrective action, CDS submitted a revised quotation that included a lower price of $1.2 million.[1]  Agency Report (AR), Tab 7a, CDS Revised Quotation Excerpt, at 5.  The VA also obtained a quotation from the incumbent contractor, prepared an agency estimate, and compared CDS’s revised quotation to the estimate.[2]  On March 3, the VA notified CDS that it had concluded that the price was not fair and reasonable.  As a result, the agency decided to continue with its plan to cancel the RFQ and resolicit the requirement as a small business set-aside.  This protest followed.  DISCUSSION  CDS argues that the VA improperly failed to award it the contract, in violation of Federal Acquisition Regulation (FAR) 19.1405(c) and Department of Veterans Affairs Acquisition Regulation (VAAR) 819.7005, because the agency unreasonably determined that the firm’s most recent quotation did not offer a fair and reasonable price.  Protest at 4-5.  CDS contends that the VA’s decision relied on an unreasonable government estimate, and that the VA should have awarded the contract to CDS.