RCG of North Carolina, LLC (36C776-21-AP-1740)

B-419691 Jun 24, 2021 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights RCG of North Carolina, LLC, a service-disabled veteran-owned small business (SDVOSB), of Raeford, North Carolina, protests the award of three short-term, sole-source contracts to RAS Enterprise, LLC, also an SDVOSB, of Gulfport, Mississippi, by the Department of Veterans Affairs (VA), for medical grade bulk liquid oxygen and associated services. The protester alleges that the sole-source awards violate procurement law, and the agency should have competed the requirements amongst SDVOSBs. 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:  RCG of North Carolina, LLC File:  B-419691 Date:  June 24, 2021 Alan Grayson, Esq., for the protester. Natica Chapman Neely, Esq., and Deborah K. Morrell, Esq., Department of Veterans Affairs, for the agency. Young H. Cho, Esq., and Peter H. Tran, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest of short-term, sole-source awards to a service-disabled veteran-owned small business by the Department of Veterans Affairs is denied where the awards were properly made under the authority of the Veterans First Contracting Program. DECISION RCG of North Carolina, LLC, a service-disabled veteran-owned small business (SDVOSB), of Raeford, North Carolina, protests the award of three short-term, sole‑source contracts to RAS Enterprise, LLC, also an SDVOSB, of Gulfport, Mississippi, by the Department of Veterans Affairs (VA), for medical grade bulk liquid oxygen and associated services.  The protester alleges that the sole-source awards violate procurement law, and the agency should have competed the requirements amongst SDVOSBs. We deny the protest. BACKGROUND The VA has a requirement for the provision of medical grade bulk liquid oxygen for medical facilities within its Veterans Integrated Service Networks (VISNs).  Contracting Officer’s Statement (COS) at 1.  According to the agency, medical facilities performing procedures such as surgery or colonoscopy--where the patient is either unconscious or sedated short of unconsciousness--need supplemental oxygen to maintain metabolism and organ function.  Id., attach. 1, Mission Impact Statement at ¶ 4.  Healthcare facilities use medical grade liquid oxygen, a concentrated pure form of oxygen without contaminants, to meet the patients’ needs.  Id.  Because these procedures are performed daily, medical facilities store a bulk form of this liquid oxygen in special containers--up to 20 feet in height and refilled regularly by special transportation trucks--as a reservoir for both planned and emergent procedures.  Id. at ¶¶ 4, 6c.  The requirements that are the subject of this protest include two components:  (1) the provision of medical grade bulk liquid oxygen; and (2) the provision of bulk liquid oxygen storage tank systems and backup tank systems, if the designated facilities do not have their own storage tank systems.  Agency Report (AR), Memorandum of Law (MOL) at 2.  Prior to 2020, the agency addressed its needs by issuing a single solicitation--covering multiple VISNs--and making awards to multiple SDVOSB firms.  COS at 1.  Under the prior solicitation, RAS was awarded contracts for VISNs 9, 15, and 16 in 2016.[1]  Id.  In 2020, the agency decided that it would solicit and award a single indefinite-delivery, indefinite-quantity (IDIQ) contract for each VISN.  Id. at 2.  The contracting officer performed market research for the VISN 9, 15, and 16 requirements.  Id.  RAS was the only SDVOSB firm that responded to the sources sought notice published on the beta.SAM.gov website.  Id.  The contracting officer, therefore, believed that the VA “rule of two” could not be satisfied because the agency did not have a reasonable expectation that at least two capable SDVOSB concerns would submit offers for any of the three VISNs.[2]  Id.  As a result, the contracting officer concluded that awarding three contracts to RAS--the incumbent contractor for those VISNs--on a sole-source basis rather than competing them, was in the best interest of the government.  Id.  On February 4, 2021, RCG filed a protest with our Office, challenging the agency’s award of the three contracts to RAS.  MOL at 4.  This protest was docketed as B‑419571.  In response to the protest, the agency advised that it would take corrective action by (1) terminating the three contracts; (2) reassessing the agency’s needs; and (3) performing additional market research.  Id.; RCG of North Carolina, LLC, B-419571, Feb.