Marine Hydraulics International, LLC (N50054-22- R-6001_COLE_HZ)

B-420562 May 25, 2022 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Marine Hydraulics International, LLC, of Norfolk, Virginia, protests the terms of request for proposals (RFP) No. N5005422R6001 (the Delivery Order RFP), issued by the Department of the Navy, Naval Sea Systems Command, for complex repair and maintenance services on the U.S.S. Cole. Marine Hydraulics argues that the agency's decision to set aside the procurement for small businesses was improper because the agency could not set aside the delivery order under the terms of the multiple award indefinite-delivery, indefinite-quantity (IDIQ) contract under which the delivery order will be issued. Alternatively, even if the agency had the discretion to set aside the order, the protester argues there was no reasonable basis to conclude that the agency would receive two or more offers from responsible small business concerns at fair and reasonable prices. 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 version has been approved for public release. Decision Matter of: Marine Hydraulics International, LLC File: B-420562 Date: May 25, 2022 Dean W. Baxtresser, Esq., Kyle R. Jefcoat, Esq., Walter Allan Perry, Esq., and W. Blake Page, Esq., Latham & Watkins LLP, for the protester. Candace M. Shields, Esq., Bradley S. Garner, Esq., and Philip S. Lazarus, Esq., Department of the Navy, for the agency. Evan D. Wesser, Esq., and Edward Goldstein, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest challenging an agency’s decision to set aside a delivery order under a multiple-award indefinite-delivery, indefinite-quantity contract that was awarded on an unrestricted basis is denied where the agency’s set-aside decision was a reasonable exercise of its discretion. DECISION Marine Hydraulics International, LLC, of Norfolk, Virginia, protests the terms of request for proposals (RFP) No. N5005422R6001 (the Delivery Order RFP), issued by the Department of the Navy, Naval Sea Systems Command, for complex repair and maintenance services on the U.S.S. Cole. Marine Hydraulics argues that the agency’s decision to set aside the procurement for small businesses was improper because the agency could not set aside the delivery order under the terms of the multiple award indefinite-delivery, indefinite-quantity (IDIQ) contract under which the delivery order will be issued. Alternatively, even if the agency had the discretion to set aside the order, the protester argues there was no reasonable basis to conclude that the agency would receive two or more offers from responsible small business concerns at fair and reasonable prices. We deny the protest. BACKGROUND The Navy must maintain its ships to meet current and future operational requirements. To support this objective, the Navy issued request for proposals No. N00002421R4428 (the Multiple Award IDIQ RFP) in November 2020 for the establishment of multiple-award, IDIQ contracts for repair, maintenance, and modernization requirements of non-nuclear Navy surface ships homeported and visiting the Norfolk, Virginia, homeport. Agency Report (AR), Tab 8, Multiple Award IDIQ RFP at 32.[1] The Multiple Award IDIQ RFP divided the anticipated requirements into four “Lots.” Lot 1 is for complex ship repair and overhaul services on surface combatant class ships, and Lot 2 is for the same kind of complex services on amphibious class ships. Id. at 130. Lot 3 requires non-complex ship repair and overhaul services on surface combatant ships, and Lot 4 requires non-complex ship repair and overhaul services on amphibious class ships. Id. The Navy solicited Lots 1 and 2 (complex) using full and open competition on an unrestricted basis. Id. In contrast, the Navy set aside Lots 3 and 4 (non-complex) for small business concerns. Id.; see also id. at 143 (providing that the Navy anticipated making at least two IDIQ contract awards for Lots 1 and 2 using “Full and Open Competition (not set aside for small business unless there are two or more small businesses capable of performing)”). The Multiple Award IDIQ RFP further established procedures for competing future delivery orders. Id. at 85. The solicitation specified that the ordering procedures were “developed and will be implemented in accordance with [Federal Acquisition Regulation (FAR)] 16.505,” and that “[t]he Government shall provide each IDIQ-MAC awardee a fair opportunity to be considered for all [delivery orders] exceeding $3,000.”[2] Id. The solicitation further provided that “[o]rders issued non-competitively will be supported by documentation as required by FAR 16.505(b)(2)(i).” Id. Relevant here, on January 6, 2022, the Navy awarded six IDIQ contracts for Lot 1 complex services for combatant class ships.