Monbo Group International (Not Applicable)

B-420217,B-420217.2 Dec 22, 2021 Jump To FULL REPORT VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Monbo Group International, a small business of Owings Mills, Maryland, protests the exercise of an option to extend services under contract no. DU100R-17-C-14, awarded to Hamilton Enterprises, LLC, of Washington, D.C., by the Department of Housing and Urban Development (HUD) for mortgage insurance claims processing services. The protester contends that the agency violated procurement regulations in exercising the option on a contract with a firm that had graduated from the Small Business Administration's 8(a) program. We deny the protest. View Decision Decision Matter of:  Monbo Group International File:  B-420217; B-420217.2 Date:  December 22, 2021 Dee Monbo, CPA, Monbo Group International, for the protester. Blythe I. Rodgers, Esq., Justin D. Haselden, Esq., Julie K. Cannatti, Esq., Department of Housing and Urban Development, for the agency. Emily R. O’Hara, Esq., and Peter H. Tran, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that the agency improperly exercised an option under a vendor’s contract, when the vendor had graduated from the Small Business Administration’s 8(a) program, is denied where the agency reasonably determined that exercising the option was the most advantageous means of satisfying the agency’s needs. DECISION Monbo Group International, a small business of Owings Mills, Maryland, protests the exercise of an option to extend services under contract no. DU100R-17-C-14, awarded to Hamilton Enterprises, LLC, of Washington, D.C., by the Department of Housing and Urban Development (HUD) for mortgage insurance claims processing services.  The protester contends that the agency violated procurement regulations in exercising the option on a contract with a firm that had graduated from the Small Business Administration’s 8(a) program.[1] We deny the protest. BACKGROUND On September 30, 2017, Hamilton was awarded a sole-source contract under the 8(a) program for the provision of services to assist HUD’s Multifamily Claims Branch (MFCB) with portfolio management and the processing of mortgage insurance claims.[2]  Agency Report (AR), Tab 3, Contract at 4.  The fixed-price contract was awarded for a base year and four pre-priced option years, with the potential for option years to begin on September 30, 2018, and extend through September 20, 2022.  Id. at 1, 4; Contracting Officer’s Statement (COS) at 1-3.  Hamilton graduated from the 8(a) program on December 7, 2017.  COS at 1.  HUD exercised the options on Hamilton’s contract in September of 2018, 2019, 2020, and 2021, each time finding that it was in the government’s best interest to exercise the option.  See AR, Tabs 5-7, 10-14, Determination and Findings (D&F) for Option Years 1-4.In October of 2019, Monbo Group contacted HUD, expressing interest in obtaining an 8(a) sole-source award from the agency for the same requirement, “once the current incumbent contract expires.”  AR, Tab 15, Emails from Protester to Agency at 1.  The protester also contacted HUD in March of 2020, stating that “[w]e notice that the 8a sole source contract . . . is expiring in September 2020 and Hamilton Enterprise has graduated from the 8a program.”  Id. at 11.  In that email, the protester again expressed its interest in being considered for an 8(a) sole-source award of the requirement.  Id.  On September 30, 2021, Monbo Group states it learned that HUD had exercised the final option year (year four) on Hamilton’s contract.  Protest at 2.  Monbo Group filed its protest with our Office on October 1, 2021.  DISCUSSION Monbo Group argues that the agency violated procurement regulations in exercising the fourth option year of Hamilton’s 8(a) contract.[3]  Protest at 3.  More specifically, the protester alleges that the agency violated section 17.207 of the FAR because HUD had relied on outdated pricing in its market research when determining whether the option should be exercised.  Id. at 3.  Further, the protester contends that HUD violated SBA’s regulations in exercising the option year because Hamilton had graduated from the 8(a) program and the option exercise was not in the best interest of the government.  Comments at 1, 4.  The agency responds that its exercise of the option was compliant with the applicable FAR and SBA regulations.  Memorandum of Law (MOL) at 3.  HUD states that the exercise of the fourth option was reasonable because the agency considered all required factors in its determination and findings, including current pricing, and determined that exercising the contract’s option was the most advantageous method of meeting HUD’s requirement.  MOL at 3; Supp.