United States Government Accountability Office

Washington, DC 20548

Comptroller General

of the United States

 

Decision

Matter of: MCB Lighting & Electrical 

File: B-406703

Date: July 13, 2012

Charles M. Baker for the protester.

Christopher S. Cole, Esq., Department of the Air Force, and Sam Q. Le, Esq., Small 

Business Administration, for the agencies.

Jennifer D. Westfall-McGrail, Esq., and Edward Goldstein, Esq., Office of the 

General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest is denied where protester fails to demonstrate that contracting agency failed 

to comply with Small Business Administration (SBA) regulations in offering a 

requirement to the SBA as a sole-source award under the 8(a) program and 

requesting that the award be made to an 8(a) firm other than the protester.

DECISION

MCB Lighting & Electrical (MCB), of Owings, Maryland, protests the decision by the 

Department of the Air Force to nominate Utility Systems Solutions (US2), of Dallas, 

Texas, rather than itself, to the Small Business Administration (SBA) for award of a

sole-source contract under the 8(a) program. The protester argues that the Air 

Force improperly failed to advise SBA of its interest in the requirement.

We deny the protest.

BACKGROUND

The acquisition at issue here is for Light Emitting Diode (LED) street and parking lot 

lights for 15 Air Force installations across the United States and abroad. The Air 

Force reports that it has been investigating the requirement and working to establish 

technical specifications since about 2009, and that, in March 2011, it issued a 

sources sought notice seeking to identify potential vendors, collect information 

regarding their products and company capabilities, and give industry the opportunity 

to comment on the proposed specification. Both MCB and US2 expressed interest 

in the acquisition. MCB’s interest was conveyed in a letter from SBA’s Baltimore 
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District Office (BDO), dated February 2, 2012, which indicated that MCB had 

identified and requested the contract in support of its approved business plan under 

the 8(a) program. 

At approximately the same time that the BDO sent its letter on behalf of the 

protester to the Air Force, responsibility for the requirement was transferred to a 

different contracting office, which issued a second sources sought notice that 

excluded installation of the lights from the products/services sought. The second 

sources sought notice, dated February 10, 2012, asked interested vendors to 

respond to a series of questions about their products, including whether the 

vendor’s exterior lighting fixtures came with integral glass lenses with ultra violet 

(UV) coating. The notice also asked vendors to describe their standard warranties, 

including the validity of the warranty if the items were installed by a third party. 

Before the new contracting office had received responses to the second sources 

sought notice, it received both the letter from the BDO on behalf of MCB mentioned 

above and a letter from SBA’s Dallas/Fort Worth District Office (DFWDO) seeking to 

have the requirement reserved for negotiation with US2. By letter of March 1, the 

Air Force advised the BDO that it was unable to accept its request to enter into a 

contract for the requirement on behalf of MCB, and by letter of March 7, the Air 

Force similarly advised the DFWDO that it was unable to accept its request on 

behalf of US2. Both letters advised that the NAICS [North American Industry 

Classification System] code assigned to the acquisition had been changed, and 

that, as a result, the agency would be conducting further market research “to 

determine the best acquisition strategy for purchasing these items.” Agency Report 

(AR), Tab 9. 

By letter of March 12, the BDO notified the Air Force that it intended to appeal the 

agency’s decision not to make the procurement available for award as an 8(a)

contract. The BDO letter asserted that the Air Force had selected an inappropriate 

NAICS code for the acquisition. 

On March 9, the agency received responses to the second sources sought notice 

from MCS and US2. In response to the question as to whether its exterior lighting 

fixtures came with integral glass lenses with UV coating, MCB replied “Integral glass 

lenses yes, UV coating no.” AR, Tab 10. In addition, when the contracting officer 

followed up with the protester regarding the terms of its standard warranty, including

the validity of the warranty if the items were installed by a third party, MCB 

responded that MCB technicians would have to perform the installation for the 

warranty to be valid. US2, in contrast, responded that it could provide integral glass 

lenses with UV coating and that its warranty would still be in effect if the lights were 

installed by a third party.

After reviewing the vendors’ responses to the sources sought notice and 

considering the BDO’s notice of intent to appeal, the contracting officer decided to 

change the NAICS code and set the acquisition aside for the 8(a) program. The 
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contracting officer further determined that the offer letter should go to the DFWDO

to negotiate with US2 directly because US2 “gave positive indication that their 

company could meet all of the requirements in the Sources Sought Notice, while 

MCB failed to meet 2 of the 9 questions that were asked.” Contracting Officer’s 

Statement of Facts at 4. On March 26, the Air Force sent a letter to the DFWDO 

offering the requirement to the SBA as a sole-source award under the 8(a) program 

and requesting that the award be made to US2. By letter of March 28, the DFWDO 

accepted the offer. 

By letter of April 3, the Air Force responded to the BDO’s notice of intent to appeal, 

stating that the procurement would be made available for award under the 8(a) 

program and that the NAICS code would be changed. On April 23, the Air Force 

notified the BDO that it had selected US2 for award of the acquisition. SBA 

forwarded the Air Force’s notification to the protester on April 30, and MCB 

protested to our Office on May 3.

DISCUSSION

Section 8(a) of the Small Business Act authorizes SBA to contract with government 

agencies and to arrange for performance of such contracts by awarding 

subcontracts to socially and economically disadvantaged small businesses.1

 

15 U.S.C. § 637(a) (2006). The Act affords SBA and contracting agencies broad 

discretion in selecting procurements for the 8(a) program. We will not consider a 

protest challenging a decision to procure under the 8(a) program absent a showing 

of possible bad faith on the part of government officials or that regulations may have 

been violated. Bid Protest Regulations, 4 C.F.R. § 21.5(b)(3) (2012). 

The section 8(a) program has both competitive and noncompetitive components, 

depending on the dollar value of the requirement. See 13 C.F.R. § 124.506(a) 

(2012); Donnelly & Moore Corp.

 1 SBA and the Department of Defense (DOD) have entered into a partnership 

agreement pursuant to which SBA delegates to DOD its contract execution 

functions, that is, its authority to enter into 8(a) prime contracts and to arrange for 

the performance of such procurement contracts by eligible 8(a) participants. SBA 

remains the prime contractor on all 8(a) contracts and the 8(a) participant remains 

the SBA’s subcontractor.

, B-404480, Feb. 16, 2011, 2011 CPD ¶ 46 at 3. In 

order to obtain the information necessary for the SBA to determine that an offered 

requirement is eligible and appropriate for award under the 8(a) program (whether 

on a competitive or noncompetitive basis), the SBA’s regulations require that 

contracting agencies furnish information about a procurement when offering it for 

inclusion in the program. 13 C.F.R. § 124.502 (2012). As a general matter, the 

SBA is entitled to rely on a contracting agency’s representations in making 

decisions regarding 8(a) acquisitions, and SBA’s regulations place primary 
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responsibility on the procuring agency to submit all relevant information necessary 

to SBA’s decision-making process. Security Consultants Group, Inc., B-276405, 

B-276405.2, June 9, 1997, 97-1 CPD ¶ 207 at 2.

In its initial protest, MCB argued that the Air Force had violated SBA regulations by 

failing to notify SBA of the protester’s interest in the acquisition in its March 26 

offering letter to the DFWDO. Among the items that the SBA regulations specifically 

require are “[i]dentification of all Participants [that] have expressed an interest in 

being considered for the acquisition” and “[i]dentification of all SBA field offices [that] 

have requested that the requirement be awarded through the 8(a) BD program.” 

4 C.F.R. §§ 124.502(c)(14) and (15). 

Prior to submitting its agency report to our Office, the Air Force took corrective 

action with regard to this issue. That is, on June 1, it sent an amended offering 

letter to the SBA in which it identified MCB as an 8(a) concern that had expressed 

an interest in being considered for the requirement and the BDO as a field office 

that had requested that the requirement be awarded through the 8(a) BD program. 

The agency’s corrective action renders this ground of protest academic; 

accordingly, we dismiss the argument.

In a related vein, the protester argues that the Air Force should have explained in its 

amended offering letter to the SBA that it was nominating US2 rather than MCB 

based on an informal assessment of the technical capabilities of the vendors, which 

led the agency to question MCB’s ability to comply with certain agency 

requirements. 

SBA regulations simply provide that the nominating agency should include a brief 

justification for its nomination in its offering letter. 13 C.F.R. § 124.503(c)(12). The 

Air Force complied with this requirement by noting in the offering letter that it was 

nominating US2 “based on their positive response to all requirements in the source 

sought notice . . . and their capabilities history.” AR, Tab 17. We do not agree with 

the protester that the Air Force was required to further justify its nomination or 

furnish an explanation as why other firms, such as MCB, were not nominated.2

MCB further argues that the Air Force violated 4 C.F.R. § 124.505(b)(2) by offering 

the requirement to the DFWDO on behalf of US2 before the head of the agency had 

issued a written decision on MCB’s appeal. In this regard, section 124.505(b)(2) 

provides that upon receipt of a notice of intent to appeal from the SBA, the 

procuring activity must suspend further action regarding the procurement until the 

head of the procuring agency issues a decision on the appeal (or makes an urgency 

 2 We solicited and obtained the SBA’s views regarding MCB’s protest. The SBA 

indicated that the agency had acted in accordance with all applicable regulations 

and that the agency had properly nominated US2 for the sole-source award.
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determination). This allegation, like the protester’s first protest argument, was 

rendered academic by the Air Forces’ issuance of an amended offering letter on 

June 1. Moreover, there is no evidence that the protester suffered any prejudice as 

a result of the agency’s failure to issue a written decision before proceeding with the 

8(a) procurement given that the Air Force acceded to the SBA’s position on both 

issues raised in the appeal--that is, it changed the NAICS code consistent with the 

SBA’s recommendation and agreed to make the requirement available under the 

8(a) program.

MCB also argues that once the Air Force decided to change the NAICS code and 

set the acquisition aside for the 8(a) program, it should have offered the 

requirement to the BDO on behalf of MCB because the BDO appealed the Air 

Force’s NAICS code designation and decision not to set the requirement aside for 

the 8(a) program. In essence, MCB is arguing that because it, through the BDO, 

played a significant role in persuading the Air Force to change the NAICS code 

assigned to the acquisition, which, in turn, led the Air Force to decide that the 

requirement was appropriate for the 8(a) program, it should have had priority for 

nomination to the SBA. 

The protester has furnished no legal authority for its argument, and we are aware of 

none. Both US2 and MCB had identified and requested that the requirement here 

be awarded to them in support of their approved business plans under the 8(a) 

program. Accordingly, it was within the Air Force’s discretion to decide which of the 

two 8(a) firms to nominate, and the Air Force made its decision based on the results 

of its informal assessment of the two vendors’ capabilities.

Finally, the protester objects to the Air Force’s assessment of its capability to 

perform the requirement. MCB argues that it can, in fact, provide glass lenses with 

UV coating and an acceptable warranty.

Based on the information furnished in the protester’s response to the sources 

sought notice and follow-up telephone conversation, indicating that the protester’s 

product would not include the UV coating desired by the agency and that its 

manufacturer’s warranty would not apply if installation was done by a third party, the 

contracting officer reasonably concluded that MCB did not offer a product that met 

the agency’s requirements. While it is possible that the contracting officer would 

have reached a different conclusion had he considered the additional information 

furnished by MCB in connection with its protest, this does not establish that the 

conclusion he reached based on the information available to him at the time was 

unreasonable or otherwise improper.

The protest is denied.

Lynn H. Gibson

General Counsel