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SDVOSB/VOSB Protests and Question

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There have been at least 4 protest decisions (latest being Crosstown Courier Service, Inc., B-406262, Mar 21, 2012) which have stated that the VA must consider SDVOSB and VOSB businesses before it can consider using FSS procedures.

Now that there is explicit authority to set-aside acquisitions in Part 8 (although per another discussion on WIFCON, it should have been going on all along), do you think the VA could set-aside an acquisition for and SDVOSB using FSS Procedures and be compliant?

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I see what your assertation is. You ask "Can the VA set-aside an acquisition for SDVOSB using FSS procedures and still be compliant?" Technically speaking, my answer would be no, they cannot. They must conduct market research prior to getting to the FSS procedures to determine whether they can set-aside for SDVOSB or not. So, technically speaking, they couldn't set-aside using FSS procedures and be compliant if they had not made the determination first.

The real question is, if they set-aside for SDVOSB and ran a competition for only SDVOSB companies, would anybody notice (or care)? Or is your point that if they set-aside using FSS Procedures and went sole source would another SDVOSB protest and have the protest sustained?

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I see what your assertation is. You ask "Can the VA set-aside an acquisition for SDVOSB using FSS procedures and still be compliant?" Technically speaking, my answer would be no, they cannot. They must conduct market research prior to getting to the FSS procedures to determine whether they can set-aside for SDVOSB or not. So, technically speaking, they couldn't set-aside using FSS procedures and be compliant if they had not made the determination first.

The real question is, if they set-aside for SDVOSB and ran a competition for only SDVOSB companies, would anybody notice (or care)? Or is your point that if they set-aside using FSS Procedures and went sole source would another SDVOSB protest and have the protest sustained?

One question that did not get addressed is whether the schedule holder would have to be verified as a SDVOSB/VOSB under the VA's VetBiz program before it could receive an award. By statute, VA can only give a contracting preference to such contractors.

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dcarver - Yes, the last question you ask is what I was curious with.

Retreadfed - Very interesting point. GSA does not currently use the VetBiz program to certify businesses as VOSB/SDVOSB, but it appears that the contracting officer at the DO/TO level would need to do so as part of the process.

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I hadn't heard that there's a requirement for anyone but the VA to use VetBiz, unless an agency has adopted it as the authoritative source in its own guidance. If someone has a directive that applies to all agencies, can you point me to it? Thanks

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dcarver - Yes, the last question you ask is what I was curious with. Retreadfed - Very interesting point. GSA does not currently use the VetBiz program to certify businesses as VOSB/SDVOSB, but it appears that the contracting officer at the DO/TO level would need to do so as part of the process.

Unless someone can point out further guidance or policy on this, I would wager a guess that if the VA were to set-aside using FSS procedures and go sole source to an SDVOSB while another SDVOSB could do the work, then the protest would be sustained and they would be forced to compete the requirement. If they use the FSS procedures they are still violating the act unless they document and make a determination before-hand that there is/isn't a VOSB or SDVOSB set-aside.

However, if properly documented that it is a set-aside to SDVOSB in accordance with the VA Act, and proper documentation was done in order to go sole source as opposed to competing as a set-aside, you may find the GAO err on the side of the VA in that regard. They have recently rejected protests where the protestor was claiming they could also perform work that was done sole source as long as the J&A was documented properly. While not completely the same as this (this is a set-aside as opposed to brand name restrictions), I would make the correlation that these two cases are largely the same. If the Government follows all proper steps and procedures to restrict competition and it can be shown that the agency did not have the adequate data to conduct a competition, the VA would be ok. Coastal Seal Services, LLC, B-406219, Mar 12, 2012.

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Thoughts regarding this thread and my initial answer…. The VAAR states the priority for SDVOSB and VOSB set asides but makes no mention to FSS (See VAAR 819.70). Also consider VAAR 808.002 supplement the priorities of FAR Part 8. Important to note here is that the VAAR in 808 does not address order of priority for services.

When market research is performed for a supply the CO determines that excess is not available, FPI is not available, AbilityOne is not available, no wholesale supply source is available including those from the National Acquisition Center, a mandatory schedule is not available including VA National Acquisition Center ones, but that 2 or more SDVOSB exist that are in VIP that hold FSS contracts. Would not the CO set aside SDOVSB for FSS before moving to an open market SDVOSB set aside?

For a service would not FSS SDVOSB be the consideration first as well before an open market set aside?

Below is how I read the FAR and VAAR combined for order of priorities for supplies and again for services VAAR does not supplement the FAR. I have attempted to identify the VAAR supplement for the order of priority by using ALL CAPS.

To the issue of VIP regardless of the source the VAAR requires the VA CO to verify the existence of the contractor in VIP.

Supply order of priority -

Agency inventories; INCLUDES SUPPLY FUND STOCK AND VA.

Excess from other agencies Federal Prison Industries, Inc

Supplies which are on the Procurement List maintained by the Committee for Purchase From People Who Are Blind or Severely Disabled.

Wholesale supply sources, such as stock programs of the General Services Administration (GSA) (see 41 CFR 101-26.3), the Defense Logistics Agency (see 41 CFR 101-26.6), the Department of Veterans Affairs (see 41 CFR 101-26.704), and military inventory control points; A NATIONAL COMMITTED USE CONTRACT AWARDED BY THE VA NATIONAL ACQUISITION CENTER

Mandatory Federal Supply Schedules WITH FIRST PRIORITY TO FEDERAL SUPPLY SCHEDULE CONTRACTS AWARDED BY THE VA NATIONAL ACQUISITION CENTER IN FSC 65 AND 66 INCLUDING IN ORDER NATIONALLY AWARDED BPAS ISSUED BY THE VA NATIONAL ACQUISITION CENTER AGAINST A FSS.

MULTI-VISN, SINGLE VISN OR LOCALLY AWARDED BPAS ISSUED BY VISN, REGIONAL, OR LCOAL VAT CONTRACTING OFFICERS AGAINST FSS. FSS WITHOUT BPAS

Optional use Federal Supply Schedules IDIQ CONTRACTS AWARDED BY VISN, REGIONAL OR LOCAL FACILITY VA CO’S FOR SUPPLIES NOT COVERED BY NATIONAL COMMITTED USE CONTRACTS OR FSS CONTRACTS IN THE FOLLOWING ORDER OF PRIORITY –(1) VISN OR REGIONALL AWARDED CONTRACTS (2) LOCALLY AWARDED CONTRACTS

Finally Commercial sources (including educational and nonprofit institutions).

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Guest Vern Edwards
Now that there is explicit authority to set-aside acquisitions in Part 8 (although per another discussion on WIFCON, it should have been going on all along), do you think the VA could set-aside an acquisition for and SDVOSB using FSS Procedures and be compliant?

If the VA deteramines that two or more SDVOSBs can do the job it must set the procurement aside for SDVOSBs. Can it make the buy on GSA schedule if it sets the buy aside for SDVOSBs? Let's put the question this way: Can the VA further restrict the competition to SDVOSBs that have schedule contracts? That would be the issue. Does the law permit further restrictions on competition to SDVOSBs that have schedule contracts. My guess is that the answer is no.

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If the VA deteramines that two or more SDVOSBs can do the job it must set the procurement aside for SDVOSBs. Can it make the buy on GSA schedule if it sets the buy aside for SDVOSBs? Let's put the question this way: Can the VA further restrict the competition to SDVOSBs that have schedule contracts? That would be the issue. Does the law permit further restrictions on competition to SDVOSBs that have schedule contracts. My guess is that the answer is no.

See, Aldevera, B-406205, (March 14, 2012). While not exactly on point, it does shed some light on this question.

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See, Aldevera, B-406205, (March 14, 2012). While not exactly on point, it does shed some light on this question.

I'm not sure if this does shed light on the question. The portion of the act in question does not adequately define the use of restricted competition past setting aside for SDVOSB or VOSB concerns. Specifically, it only goes as far as to say the contracting officer must set aside for SDVOSB or VOSB, in that order, if they have a reasonable expectation that one or two or more companies that are classified as SDVOSB or VOSB can meet the requirements at a reasonable price. It does not specify in which way the Agency must set-aside or conduct the competition, it just states that the Agency must set it aside for those concerns. So the question still remains, if the agency determines that they can run a competition for the requirement between SDVOSB concerns, and 2 or more of those concerns are schedule holders, what prevents them from running a competition using FSS procedures?

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Guest Vern Edwards

What prevents them? Maybe a protest from a nonschedule SDVOSB who says that the law makes no provision for further restriction and that the GSA schedule award was not set aside foe SDVOSBs.

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What prevents them? Maybe a protest from a nonschedule SDVOSB who says that the law makes no provision for further restriction and that the GSA schedule award was not set aside foe SDVOSBs.

I would agree with you, except in the GAO decision they make the statement:

In addition, the agency here has not contended that there is a reasonable expectation that two or more SDVOSB concerns holding FSS contracts could meet the requirement.
This would allude that the GAO would rule differently if the agency had set aside for SDVOSB and was using the FSS procedures with a restriction to them, no? I'm just trying to understand the rationale and learn from it at this point, not trying to argue your point on it. The way I read the statement, it leads me to believe the GAO would of ruled in favor of the agency if they had made a determination that 2 or more SDVOSB companies could compete, and of those companies, two or more hold a schedule so they can achieve competition through competing using FSS procedures.

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I would agree with you, except in the GAO decision they make the statement:

This would allude that the GAO would rule differently if the agency had set aside for SDVOSB and was using the FSS procedures with a restriction to them, no? I'm just trying to understand the rationale and learn from it at this point, not trying to argue your point on it. The way I read the statement, it leads me to believe the GAO would of ruled in favor of the agency if they had made a determination that 2 or more SDVOSB companies could compete, and of those companies, two or more hold a schedule so they can achieve competition through competing using FSS procedures.

The sentence you quote from the decision does not address the GAO's rationale for sustaining the protest on the merits. Instead, it relates to the question of whether Aldevra was an interested party (one whose direct economic interest would be affected by the outcome of the protest) so that it could properly file a protest. Threrefore, that sentence does not imply that GAO might have reached a resujlt different from the one it did.

The issue that I am raising is whether VA could set aside an order for SDVOSB/VOSB concerns under a schedule contract and issue the order to a concern that is not verified by VA and listed on the VA's database. Here is what the statute says on this

A small business concern may be awarded a contract under this section only if the small business concern and the veteran owner of the small business concern are listed in the database of veteran-owned businesses maintained by the Secretary.

From the way I read the GAO decisions in this area, the VA doesn't follow FAR 19.14, but the Veterans Act of 2006, from which the above extract was taken.

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Guest Vern Edwards

In recent months the GAO and the VA have disagreed about the proper interpretation of a law that applies only to the VA. The GAO says that the VA must consider a SDVOSB set-aside before using the Federal Supply Schedules. The VA says that it can use the Federal Supply Schedules without considering a SDVOSB set-aside.

The question that opened this thread was:

[D]o you think the VA could set-aside an acquisition for an SDVOSB using FSS Procedures and be compliant?

In the case to which Carl has provided a link, Crosstown Courier Service, Inc., B-406336, April 23, 2012, it appears that the GAO has said that the answer is yes, the VA can make a SDVOSB set-aside among FSS contractors without considering non-FSS SDVOSB firms. The key language in the decision being:

As an initial matter, we point out that nothing in the statutory authority relied on by Crosstown, 38 U.S.C. § 8127(d), requires the VA to conduct its market research exclusively on the open market, as opposed to among FSS vendors... Thus, the agency’s initial decision to conduct market research confined to FSS vendors was not, in and of itself, objectionable, to the extent that the VA sought to determine whether there were two or more SDVOSB (or VOSB) FSS vendors capable of meeting its requirement.

Boy, do you think the SB programs can get any more complicated?

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Vern, yes they can. See the COFC's decision in Bluestar Energy Services v. U.S., COFC Nos. 11-460C and 11-461C, dated September 22, 2011, where the court held that Bluestar was not an interested party to protest a GSA procurement to provide electirical power to over 150 Federal facilities in DC, including the DC VA Medical Center, because Bluestar was not verified as a SDOVSB by the VA.

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