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Supplemental Protest at 3-5, citing to AR, Tab 5, Market Research, at 28-29. In this regard, when asked by our Office to respond to the protesters assertions, the agency did not specifically address the frequency of when the contractor would be required to visit the VA facilities, and instead noted only that the solicitation provides for site visits as required. Further, when the agency considered whether the solicitation should be restricted to A/E firms located within the VISN 20 region, the agency project engineer rejected setting a distance limit, proposing instead only that firms that are located closer should be rated higher. In any case, given that the VISN 20 region includes facilities in Washington, Oregon, Idaho, and Alaska, it seems likely that even A/E firms located within VISN 20 will be required to travel significant distances away from their office(s) for necessary site visits. The determination as to whether there is a reasonable expectation of receiving offers from two or more SDVOSB firms that are capable of performing the required work is a matter of informed business judgment within the contracting officers discretion that we will not disturb absent a showing that it was unreasonable.

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Specifically, the VA Act, together with VAs implementing regulations, require VA to set aside acquisitions for SDVOSBs whenever it is determined that there is a reasonable expectation that offers will be received from at least two SDVOSBs and that award can be made at a fair and reasonable price. The VA Act also requires that agencies procuring goods or services on behalf of VA--such as DLA here--must comply with the VA Act Rule of Two to the maximum extent feasible. See In and Out Valet Co., supra; Crosstown Courier Serv., Inc., B-410936, supra. However, an agency may not issue an SDVOSB sole-source (or set-aside) award if the procurement would otherwise be made using Federal Prison Industries (18 U. Finally, the agency also considered the procurement history of this requirement. We read these statements to reflect a congressional expectation that the VA generally will conduct procurements with the purpose of meeting the SDVOSB and VOSB participation goals. In support of its position that the solicitation should have been set aside for SDVOSBs, Kingdomware also relies on FAR sect. 38.101(e)--both of which pertain to FSS purchasing--provide that FAR part 19 does not apply to orders placed against FSS contracts. 19.502-1(b), which pertains to small business set-aside requirements, also provides that FAR part 19 set-aside requirements do not apply to FSS purchases.

We refer to this requirement as the VA Acts Rule of Two. Expecting only co-owned firms to submit offers, however, would not reasonably support an expectation of price competition. The requirements of the VA Act do not dictate the use of any particular methodology in assessing the availability of SDVOSBs to perform a requirement; measures such as prior procurement history, market surveys, advice from the agencys small business specialist, and information concerning prospective offerors business history and capability or capacity may all provide a reasonable basis for a decision to set aside, or not set aside, a requirement for SDVOSBs. 657f(a) (a contracting officer may award a sole source contract to an SDVOSB). See Crosstown Courier Serv., Inc., B‑410936, supra. 19.502-2(b), which generally requires than an agency set aside acquisitions with an anticipated dollar value of more than $150,000 for small businesses where there is a reasonable expectation of receiving fair market prices from at least two small business concerns. With respect to the solicitation's reference to MOBIS, the agency responds that the reference was an error.

46 et seq)).[6] Therefore, there is nothing in the Small Business Act or implementing regulations that preclude an SDVOSB sole-source award if the requirement can be satisfied using the GSAs FSS. Here, DLA conducted market research, which included a sources sought notice, a review of all responses received expressing an interest in the acquisition, and a review of the prior procurement history. See Al-Razaq Computing Services, B-410491, B-410491.2, Jan. Here, there is no dispute in the record that the literal requirement as set forth in the VA Acts Rule of Two was satisfied. Further, in implementing the VA Act, the VA additionally required that [i]n determining the acquisition strategy applicable to an acquisition, the contracting officer shall consider, in the following order of priority, contracting preferences that ensure contracts will be awarded first to SDVOSB concerns, then VOSB concerns, to the extent the Rule of Two is met, prior to considering whether to award to any other category of small business contracting preferences, including small business concerns. We cannot find reasonable the agencys decision not to set aside this acquisition, or any portion of this acquisition, for SDVOSB or VOSB concerns because its market research yielded fewer of these concerns than the anticipated number of contract awards. In this regard, when the contracting officer, in reconsidering the set-aside decision after receiving the contract specialists expanded search results, indicated on May 4 that a 100% SDVOSB set aside may be necessary, id., the agency project engineer responded that he was definitely opposed to setting this solicitation aside for SDVOSB, due to the poor performance of the SDVOSB contractor in the VISN 6 and VISN 20 regions. It doesnt make any sense to hire someone who cannot do the job properly. In our view, however, such anecdotal evidence of poor performance by an SDVOSB contractor, unsupported by any detailed analysis indicating that a small business concern would be unlikely to possess the specific skills and resources needed to perform the specific work required under the contemplated contract, does not represent the reasonable exercise of informed business judgment required under the statute. Therefore, IOVC contends that the agency abused its discretion in failing to set the procurement aside for SDVOSBs. 8127, and the VAs implementing regulations, VA Acquisition Regulation (VAAR), 48 C. Crosstown Courier Serv., Inc., B-407404, supra, at 3. 8127(d) (emphasis added); see Buy Rite Transport, B-403729, B-403768, Oct.

Although agencies need not use any particular methodology when conducting market research, measures such as prior procurement history, market surveys, and advice from the agencys small business specialist may all constitute adequate grounds for a contracting officers decision. 8, 2009, 2009 CPD 253 at 2 (an agency is not required to contact all potential sources when conducting market research regarding the feasibility of sole-source procurement). However, a limited exception applies where a protester argues that the awardees offer shows, on its face, that it is not eligible for award as a small business, or in this case as an SDVOSB; in those instances, we will review the reasonableness of the contracting officers decision not to refer the matter to the SBA. We will refer to this requirement, grounded in Title 38, as the VA Acts Rule of Two. Under the 2006 VA Act at issue here, the VA shall set aside its acquisitions for SDVOSB or VOSB concerns once the Rule of Two is satisfied. Under the Veterans Benefits, Health Care, and Information Technology Act of 2006, 38 U. Although the agency now argues that the inadequate number of SDVOSB A/E firms in the VISN 20 region warranted not setting aside the procurement for SDVOSB firms, the protest record suggests that agency officials may, in fact, have been concerned with presumed poor performance by an SDVOSB awardee. As noted, the engineer concluded that, [i]n my opinion, if we are going to be forced to set this aside for SDVOSB, then we should cancel the solicitation. Specifically, the protester notes that there are 46 SDVOSB firms nationwide registered under NAICS code 812930, and that four of those firms are currently performing contracts under that NAICS code. 819.7004, 819.7005, the VA is required to set aside acquisitions for SDVOSBs whenever it determines that there is a reasonable expectation that offers will be received from at least two SDVOSB firms and that award can be made at a fair and reasonable price. Crosstown Courier Serv., Inc., B-410936, supra; Flow Sense, LLC, B-310904, Mar. Further, we have held that, even where an RFP does not restrict competition to firms located in a particular geographical area, an agency may focus its market research on the geographical area in which performance will take place and consider the likelihood that firms from outside it would respond to the solicitation. Subsection (c), referred to in the above provision, provides the VA with authority to award sole-source contracts to SDVOSBs when: (1) such concern is determined to be a responsible source with respect to performance of such contract opportunity; (2) the anticipated award price of the contract (including options) will exceed the simplified acquisition threshold .

Crosstown Courier Serv., Inc., B-410936, supra; Flow Sense, LLC, B-310904, Mar. Further, we have held that, even where an RFP does not restrict competition to firms located in a particular geographical area, an agency may focus its market research on the geographical area in which performance will take place and consider the likelihood that firms from outside it would respond to the solicitation. 15, 2015, 2015 CPD 128 at 3; Crosstown Courier Serv., Inc., B-407404, Nov. Here, we conclude that the agencys determination here that there was not a reasonable expectation that offers would be received from at least two SDVOSB firms that are capable of performing the required work is not supported by the record.

The determination as to whether there is a reasonable expectation of receiving offers from two or more SDVOSB firms that are capable of performing the required work is a matter of informed business judgment within the contracting officers discretion that we will not disturb absent a showing that it was unreasonable. 12, 2015, 2015 CPD 107 at 4; Buy Rite Transp., B-403729, B-403768, Oct. The requirements of the 2006 VA Act do not dictate the use of any particular methodology in assessing the availability of SDVOSB firms to perform a requirement; measures such as prior procurement history, market surveys, advice from the agencys small business specialist, and information concerning prospective offerors business history and capability or capacity may all provide a reasonable basis for a decision to set aside, or not set aside, a requirement for SDVOSBs. As emphasized above, the VA is required to set aside certain procurements "[e]xcept as provided in subsections (b) and (c) . 125.20(a); FAR 19.1406(a)(1) (SDVOSB sole-source is permitted when the contracting officer does not have a reasonable expectation that offers would be received from two or more service-disabled veteran-owned small business concerns). See, e.g., Crosstown Courier Serv., B‑407404, supra (courier services in a designated area); In and Out Valet Co., supra (valet parking services). As noted by the agency, our cases have recognized that in appropriate circumstances an agency may focus its market research on the geographical area in which performance will take place after reasonably concluding that there is little likelihood that firms from outside the area would respond to the solicitation. The cases cited by the agency, however, are readily distinguished from the circumstances here, since they involved requirements that likely would be performed by local firms, such as those requirements necessitating a substantial, regular presence by the contractor at specific sites or a specific work area. 35 at 2; In & Out Valet Co., B-311141, April 3, 2008, 2008 CPD para. Subsection (b) provides that, for contracts with SDVOSBs for amounts less than the simplified acquisition threshold, the VA is also authorized to use noncompetitive procedures. FAR clause 52.219-27, Notice of Service Disabled Veteran-Owned Small Business Set Aside, states that SDVOSB concerns providing products as manufacturers agree that at least 50 percent of the costs of manufacturing will be performed by the concern or other SDVOSB concerns. The record, as described above, shows that the Air Force conducted ample market research in connection with its decision to set aside the acquisition for SDVOSB, including: (1) issuing a sources sought notice and questionnaire; (2) identifying potential small business offerors using available government contractor databases; (3) surveying those businesses regarding their socioeconomic status; and (4) contacting contracting officials at other Air Force bases to discuss recently conducted procurements for similar aircraft services. VA255P657SC1615, and the exercise of an option under that task order, by the Department of Veterans Affairs (VA) to Live Process, Inc., of Madison, New Jersey, under that firms Federal Supply Schedule (FSS) contract. 8127-28 (2006), requires the VA to consider setting aside a procurement for SDVOSBs, or veteran-owned small businesses (VOSB), before procuring its requirements under the FSS. Ordinarily, in order to qualify as a small business concern to provide manufactured products or other supply items, an offeror must either be the manufacturer or producer of the end item being procured, or if it does not manufacture the item being purchased, the offeror must comply with what is known as the nonmanufacturer rule. We agree with the agency that this market research is consistent with the requirements of the FAR, and we find no basis to sustain Starlights protest that the agency unreasonably set aside the procurement for SDVOSBs. The protesters argue that, had the agency issued a sources-sought notice, it would have discovered that at least two SDVOSBs were interested in competing. 8123, it was not required to set aside a procurement of prosthetic appliances for SDVOSBs. Section 8123 of Title 38 provides: The Secretary may procure prosthetic appliances and necessary services required in the fitting, supplying, and training and use of prosthetic appliances by purchase, manufacture, contract, or in such other manner as the Secretary may determine to be proper, without regard to any other provision of law. We dismiss the request because, as discussed below, our Office will no longer consider protests concerning the contention that the Veterans Benefits, Health Care, and Information Technology Act of 2006 (2006 VA Act), 38 U. On August 1, 2011, the VA issued the task order on a sole-source basis under Live Process FSS contract. Here, Encompass does not show that the VAs set-aside determination was unreasonable. In furtherance thereof, the first question is whether the statutory language provides an unambiguous expression of the intent of Congress. Crosstown argues that the VA had a reasonable basis to expect quotations from two or more SDVOSBs, and therefore the agency should have set aside the current RFQ for SDVOSBs, rather than for small businesses. Therefore, the VA argues, the contracting officer's decision to issue the RFQ as a small business set-aside, rather than an SDVOSB or VOSB set-aside, was reasonable and consistent with law and regulation. Consequently, we see no merit to the protesters contention that the agencys market research failed to consider whether the firms identified had the capability to perform and could comply with the rule. See In and Out Valet Co., supra; Crosstown Courier Serv., Inc., B-410936, supra; Crosstown Courier Serv., Inc., B-407404, Nov. Here, the record reflects that DLA was faced with an urgent, but low-dollar requirement for fuel. See In and Out Valet Co., supra; Crosstown Courier Serv., Inc., B-410936, supra. After terminating the first contract, the agency awarded to another SDVOSB that was also unable to perform the contract. Crosstown Courier Serv., Inc., supra, at 3; Flow Sense, LLC, B-310904, Mar. Here, we find the COs market research and resulting set-aside decision were reasonable. In our view, the VA has not yet proffered an interpretation to which we can properly defer. 8127(d) to require a preliminary determination about whether there was a reasonable expectation that two or more SDVOSB (or VOSB) concerns can meet the requirement at a reasonable price. 21.0(a)(1) (2011), only an "interested party" may protest a federal procurement. MICCI contends that the CVE erred in rejecting MICCI's application, and that the protester remains an interested party because it has filed a request for reconsideration with the CVE and is awaiting the CVE's decision. Although MICCI has filed a request for reconsideration, the determination that MICCI is not an eligible SDVOSB concern remains in effect, and thus provides no basis for us to consider the agency's actions.

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