Highlights
Tactical Shipping, LLC, a small business of Greenwich, Connecticut, protests the rejection of its proposal, submitted in response to request for proposals (RFP) No. HTC711-18-R-W002, which was issued by the United States Transportation Command (USTRANSCOM) for sealift transportation services. Tactical asserts that the agency rejected its proposal because Tactical was not a Voluntary Intermodal Sealift Agreement (VISA) participant, which, according to Tactical, is a responsibility determination that had to be referred to the Small Business Administration (SBA) for a certificate of competency (COC) review.
We deny the protest.
We deny the protest.
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: Tactical Shipping, LLC.
File: B-416223.4; B-416223.5
Date: September 5, 2018
Frank V. Reilly, Esq., Frank
V. Reilly Attorney at Law, for the protester.
Colonel C. Taylor Smith, Christopher S. Cole, Esq., Robert Bowers, Esq., and
Peter Ries, Esq., Department of the Air Force, for the agency.
Mary G. Curcio, Esq., and Laura Eyester, Esq., Office of the General Counsel,
GAO, participated in the preparation of the decision.
DIGEST
Protest that agency’s rejection of offeror’s proposal
because offeror did not have a Voluntary Intermodal Sealift Agreement (VISA)
was a negative responsibility determination that the agency was required to
refer to the Small Business Administration under its certificate of competency
procedures is denied where participation in VISA program is not a matter of
responsibility.
DECISION
Tactical Shipping, LLC, a small business of Greenwich,
Connecticut, protests the rejection of its proposal, submitted in response to
request for proposals (RFP) No. HTC711-18-R-W002, which was issued by the
United States Transportation Command (USTRANSCOM) for sealift transportation
services. Tactical asserts that the agency rejected its proposal because
Tactical was not a Voluntary Intermodal Sealift Agreement (VISA) participant,
which, according to Tactical, is a responsibility determination that had to be
referred to the Small Business Administration (SBA) for a certificate of
competency (COC) review.
We deny the protest.
BACKGROUND
The agency posted the solicitation, a small business
set-aside, on the federal business opportunities website on March 6, 2018.
Contracting Officer’s Statement (COS) at 7. The closing date for the receipt
of proposals was April 5. Agency Report (AR), Tab 19, RFP, at 1. The
solicitation provided that the contract would be awarded to the offeror that
submitted the lowest-priced, technically acceptable proposal. Id. at
23. The solicitation included three non-price factors, each of which would be
rated acceptable or unacceptable: VISA participation; technical capability;
and past performance. Id. The solicitation explained that a VISA
participant is an entity that is enrolled with the Maritime Administration
(MARAD) in the VISA program and holds a fully executed VISA contingency
contract with USTRANSCOM. Id. at 24. The solicitation explained that
in evaluating proposals, the agency would first validate an offeror’s VISA
participation status with MARAD, and confirm with the USTRANSCOM VISA
contracting officer that the offeror has an active VISA contingency contract. Id.
If the offeror was not enrolled with MARAD and did not have a current VISA
contingency contract, the proposal would not be evaluated under the price,
technical, or past performance factors. Id. at 23-24.
On April 4, Tactical filed a protest with our Office and
argued that the requirement for offerors to have a VISA enrollment and
contingency contract in place at the time of proposal submission was
unnecessary to meet the agency’s needs, restrictive of competition, and
inconsistent with the agency’s Justification for Other than Full and Open
Competition. GAO dismissed that protest on June 19 because Tactical failed to
file substantive comments in response to the agency report, which rebutted each
of the protestor’s allegations in detail. Tactical Shipping, LLC,
B-416223, June 19, 2018 (unpublished decision).
Tactical also submitted an offer prior to the April 5 due
date for proposals. COS at 13. On April 9, MARAD confirmed that Tactical was
not a VISA participant. Id. As a result, the agency did not evaluate
Tactical’s proposal under the price, technical capability, and past performance
factors. Id. at 14. The agency notified Tactical on June 5 that its
proposal was rejected. Id. On June 11, Tactical filed this protest
with our Office.
DISCUSSION
Tactical asserts that USTRANSCOM rejected its proposal
because Tactical was not a VISA participant, which, according to Tactical, is a
responsibility determination that USTRANSCOM was required to refer to the SBA
for a COC review. We find that VISA participation is not a matter of
responsibility and USTRANSCOM was not required to refer the matter to the SBA
for a COC determination.
Responsibility is a term used to describe an offeror’s
ability to meet its contract obligations. See generally Federal
Acquisition Regulation (FAR) subpart 9.1.
In most cases, responsibility is determined on the basis of general standards
of responsibility such as business integrity, adequacy of financial resources,
ability to meet delivery schedules, and a satisfactory record of past
performance. FAR § 9.104-1.
Generally, the contracting agency determines in the first
instance whether a business is responsible; a business that is found not
responsible is not eligible for award.
Id. § 9.103(b).
Where
a small business is concerned, the agency must refer any nonresponsibility
determination to the SBA under its COC procedures; the SBA has the authority to
review an agency’s negative determination of responsibility and to finally
determine the responsibility of a small business concern by issuing or refusing
to issue a COC. 15 U.S.C. § 637(b)(7); 13 C.F.R. § 125.5; FAR § 9.103(b); FAR
subpart 19.6. The SBA’s regulations require a
contracting officer to refer a small business concern to SBA
for a COC determination when the contracting officer
has refused to consider a small business concern for award of a contract or
order “after evaluating the concern’s offer on a non-comparative basis (e.g., pass/fail, go/no go, or acceptable/unacceptable) under
one or more responsibility type evaluation factors (such as experience of the
company or key personnel or past performance).” 13 C.F.R. § 125.5(a)(2)(ii).
The SBA is then empowered to certify the responsibility
of the small business concern to the agency. 15 U.S.C. § 637(b)(7)(A). Where
an agency rejects a proposal as unacceptable on the basis of factors not
related to responsibility, however, referral to the SBA is not required. See
Tyonek Worldwide Servs., Inc.; DigiFlight, Inc., B‑409326 et al.,
Mar. 11, 2014, 2014 CPD ¶ 97 at 12-13; Light-Pod, Inc., B‑401739, B‑401739.2,
Nov. 12, 2009, 2009 CPD ¶ 238 at 5.
Here, the agency rejected Tactical’s proposal because
Tactical was not a VISA participant. The VISA program is authorized in
accordance with MARAD’s authorities under the Defense Production Act of 1950
and the Maritime Security Act of 2003, and was approved as a Department of
Defense (DoD) commercial sealift readiness program on January 30, 1997. COS at
3; AR, Tab 6, VISA Brochure, at 2; see also https://www.marad.dot.gov/search/VISA/
(last visited August 29, 2018). The program is a partnership between the U.S.
Government and the maritime industry to provide DoD with assured access to
commercial sealift and intermodal capacity to support a significant portion of
surge and sustainment requirements in the deployment of U.S. military forces
during war or other national emergencies. AR, Tab 4, 79 Fed. Reg. 64462, 64464
(Oct. 29, 2014); AR, Tab 15, 83 Fed. Reg. 4552 (Jan. 31, 2018). The VISA
participant assures access to its vessels and intermodal systems capacities in
return for priority for DoD business during peacetime. 83 Fed. Reg. 4552-4553,
4554.
The VISA program can be
activated in three stages as determined by DoD with each stage representing a
higher level of capacity commitment in the event of war or national emergency.
79 Fed. Reg. 64462, 64465; see also 83 Fed. Reg. 4552, 4553. When
it is activated by the Secretary of Defense, it provides for a seamless,
time-phased transition from peacetime to wartime operations, creating a risk to
VISA participant’s day-to-day commercial operations. Id.; see also
COS at 5.
To become a VISA participant, an
entity submits a VISA application to MARAD, independent of any specific
solicitation, which is reviewed to determine whether the entity is eligible to
be a VISA participant. 83 Fed. Reg. 4552, 4554. If MARAD determines that the
entity is eligible to be a VISA participant, MARAD will approve the applicant
by signing the VISA application document, which completes the eligibility phase
of the VISA enrollment process. Id. The eligible applicant then
submits a VISA contingency contract proposal to USTRANSCOM, which initiates an
evaluation and VISA contract award process. See id. USTRANSCOM
cannot take action on a VISA contingency contract proposal until it receives
written notification of VISA eligibility from MARAD. COS at 18; see also
83 Fed. Reg. 4552, 4554 (“After VISA eligibility is approved by MARAD, approved
applicants are required to execute a VISA Contingency Contract with
USTRANSCOM.”).
USTRANSCOM included the requirement to be a VISA
participant in its solicitation in accordance with this government priority, a
potential need that is separate and independent from the need for transportation
services that are to be met to be eligible for award under the instant
solicitation. In addition, MARAD is the agency that reviews and approves VISA
applications. When USTRANSCOM rejected Tactical’s offer because Tactical was
not a VISA participant, USTRANSCOM was not determining Tactical’s
responsibility, that is, whether Tactical had the capacity or experience or
ability to perform the contract, and meet USTRANSCOM’s need for transportation
services. Rather, USTRANSCOM simply confirmed Tactical’s VISA participant
status. Accordingly, we conclude that the requirement to be a VISA participant
is not a matter of responsibility, and the agency was not required to refer the
matter to the SBA for a COC upon rejecting Tactical’s offer. See Tyonek
Worldwide Servs., Inc.; DigiFlight, Inc., supra. We therefore find
no basis to sustain the protest.
De Facto Sole-Source Award
After receiving the agency report, Tactical filed a timely
supplemental protest with our Office alleging that the procurement is a de facto
sole-source award. Specifically, the protester asserts that since only one
company was found acceptable under the VISA requirement and thus eligible for
award, the agency conducted a sole-source procurement without obtaining a
justification and approval to do so.
We find that Tactical is not an interested party to raise
this challenge. Under the provisions of the Competition in Contracting Act of
1984, 31 U.S.C. §§ 3551-3556,
only an interested party may protest a federal procurement. That is, a
protester must be an actual or prospective supplier whose direct economic
interest would be affected by the award of a contract or the failure to award a
contract. Bid Protest Regulations, 4 C.F.R.§ 21.0(a).
Here, Tactical is not a current VISA participant.
In addition, to our knowledge,
Tactical has not filed an application with MARAD to become a VISA participant.
The agency has reported, and Tactical has not disputed, that as of June 27,
Tactical was not enrolled in the VISA program and had not submitted a VISA
application to MARAD. COS at 5-6.
Given that we dismissed Tactical’s initial protest challenging the solicitation’s
terms, as Tactical admitted, Tactical would not have been eligible for award
since it was unable to submit a responsive offer, that is, an offer that
demonstrated that Tactical was a VISA participant when its proposal was
submitted. See DAI, Inc., B-408625, B-408625.2, Nov. 6, 2013,
2013 CPD ¶ 259 at 5. Thus, Tactical is not an interested party to challenge
the agency’s alleged determination to proceed on a de facto sole-source basis.
Id.
The protest is denied.
Thomas H. Armstrong
General Counsel
This is a verbatim capture of GAO's own published decision. Nothing is summarized or reworded, and the sections run in the order GAO wrote them. One thing is moved: GAO collects its numbered notes at the foot of the document, and each is shown here under the paragraph that first cites it, with its own number carrying you back. A note the decision never cites stays where GAO printed it.