United States Government Accountability Office

Washington, DC 20548

Comptroller General

of the United States

 

Decision

Matter of: Major Contracting Services, Inc. 

File: B-406980

Date: October 10, 2012

William L. Sasz, Esq. for the protester.

MAJ John C. Dohn, Department of the Army, for the agency.

Susan K. McAuliffe, Esq., and Edward Goldstein, Esq., Office of the General 

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

DIGEST

Protest arguing that solicitation improperly restricts competition in violation of the 

Competition in Contracting Act by consolidating portable latrine waste disposal 

services with waste disposal services for permanent latrines is denied where the 

record supports the agency’s conclusion that combining the requirements is 

reasonably necessary to meet the agency’s needs.

DECISION

Major Contracting Services, Inc. (MCS), of Colorado Springs, Colorado, protests the 

consolidation of requirements for sanitary waste disposal services for portable 

latrines with disposal services for permanent latrines (including septic tanks) at Fort 

Leonard Wood, Missouri, under request for proposals (RFP) 

No. W911S7-12-R-0015 issued by the Department of the Army. MCS argues that

the consolidation improperly restricts competition in violation of the Competition in 

Contracting Act (CICA).

We deny the protest.

BACKGROUND

On March 1, 2012, the Army issued a solicitation, set aside for small business 

concerns, for portable latrine and permanent latrine (including septic tank) waste 
Page 2 B-406980 

disposal services located at Fort Leonard Wood.1 On March 14, prior to that 

solicitation’s closing date, MCS filed a protest with our Office arguing that the 

solicitation improperly restricted competition in violation of CICA, 10 U.S.C. 

§§ 2305(a)(1)(A) (2006), by “bundling” under one contract the portable latrine waste 

disposal services and the permanent latrine waste disposal services. 

Subsequently, the agency cancelled the solicitation and we dismissed the protest as 

academic. See Major Contracting Services, Inc., B-406513, April 17, 2012. 

On May 1, the agency published in FedBizOpps a request for information (RFI) that 

included the performance work statement (PWS) for the waste disposal services at 

Fort Leonard Wood and sought responses to six questions. The agency also

identified 106 small businesses that perform the type of services contemplated by 

the cancelled solicitation, and directly emailed the RFI to these firms. The 

questions focused on whether the firms had the capability to perform the entire 

requirement, differences in equipment and personnel for portable latrine work as 

compared to the permanent latrine requirements, whether the firms would submit 

offers for both requirements if the agency separated the portable and permanent 

latrine requirements, and cost and price implications associated with splitting the 

requirements. 

Six firms responded to the agency’s RFI--the protester did not submit a response. 

All of them confirmed that they perform both portable and permanent latrine 

services using the same personnel and essentially the same equipment (although 

not required by the consolidated RFP, most of the firms reported the benefit of using

a larger capacity truck for consolidated requirements due to larger septic tank

capacity). One of the firms further explained that many more firms currently perform 

both services as compared to 10-15 years ago. All six responders stated a 

preference for consolidation. Four firms stated that they would offer lower prices for 

a consolidated requirement due to economies of scale, where higher anticipated 

costs for performing the work as separate requirements were attributed to 

associated increases in overhead, manpower, equipment and transportation costs.2

 1 The record reflects that the agency has historically procured these services at this 

location under a single contract set aside for small business concerns.

One responder reported that, due to these additional costs involved in doing so, it 

would not submit proposals to compete for the work if the portable and permanent 

latrine services were solicited separately. Another firm expressed its opinion that 

separating the requirements would limit competition among small businesses 

located beyond the Fort Leonard Wood area, since smaller requirements are less 

attractive business opportunities.

2 One responder, indicating the similar nature of the portable and permanent latrine 

work, noted that its pricing would be based on a per gallon price for either of the 

services.
Page 3 B-406980 

Based on the results of the above market research, the contracting officer 

concluded that there are small businesses capable of, and interested in, servicing 

both portable and permanent latrines, and that the services are substantially similar,

utilizing the same personnel, skills, and equipment (although some prefer larger 

capacity trucks for septic tank work). The contracting officer also determined that 

“separating the services into two contracts could have the effect of limiting 

competition by making the contracts financially unappealing for companies, 

especially small businesses, which are not in close proximity to Fort Leonard 

Wood.” Agency Report, Tab 15, Market Research Report, May 23, 2012 at 5. The 

contracting officer further found that cost savings and operational efficiencies 

associated with combining the portable latrine disposal requirements with the 

permanent latrine requirements made it the best method of meeting the agency’s 

overall needs. 

The current RFP, requesting proposals for both the portable and permanent latrine 

services, was issued on June 11, 2012. The agency reports that seven small

businesses submitted proposals for award of the RFP’s combined portable and 

permanent latrine disposal services contract. MCS filed this protest shortly before 

the scheduled closing date for the receipt of proposals. 

DISCUSSION

MCS, a portable latrine contractor, alleges that most portable latrine contractors do 

not service permanent latrines/septic tanks, that portable and permanent latrine 

services are separate industries requiring specialized equipment and personnel, 

and that consolidating the requirements in this RFP is restrictive of competition in 

violation of CICA.

3

CICA generally requires that solicitations permit full and open competition and 

contain restrictive provisions and conditions only to the extent “necessary to satisfy 

the needs of the executive agency.” 10 U.S.C. § 2305(a)(1)(A) (2006). Since 

consolidated or “bundled” procurements may combine separate, multiple 

 3 MCS acknowledges that, since the agency has historically procured the same 

consolidated requirement under small business set-aside procurements, the current 

consolidated requirement is not a “bundled” requirement under the terms of the 

Small Business Act and Federal Acquisition Regulation (FAR), which define 

bundling as the consolidation of requirements previously performed under separate 

smaller contracts where the consolidation is likely to be unsuitable for small 

business concerns. 15 U.S.C § 632(o)(2) (2006); FAR § 2.101. In this regard, the 

firm has provided no support for its contention that the agency was required to 

perform the detailed quantification of benefits analysis associated with bundled 

procurements under FAR § 7.107.
Page 4 B-406980 

requirements into one contract, they have the potential for restricting competition by 

excluding firms that can furnish only a portion of the requirements. Aalco 

Forwarding, Inc., et al., B-277241.12, B-277241.13, Dec. 29, 1997, 97-2 CPD ¶ 175 

at 6. In interpreting CICA, we have assessed whether an agency has a reasonable 

basis for its contention that the consolidation is required to meet its needs, and have 

sustained protests only where no reasonable basis is demonstrated. U.S. 

Electrodynamics, Inc., B-403516, B-403516.2, Nov. 12, 2010, 2010 CPD ¶ 275 at 9; 

2B Brokers et al., B-298651, Nov. 27, 2006, 2006 CPD ¶ 178 at 9; Teximara, Inc., 

B-293221.2, July 9, 2004, 2004 CPD ¶ 151 at 6. We have noted that mere 

administrative convenience alone does not provide a reasonable basis for restrictive 

competition through consolidation of requirements, but substantial cost savings 

through reduction of duplicative efforts and operational efficiencies may provide a 

reasonable basis for consolidation. See U.S. Electrodynamics, Inc., supra. 

The agency identifies its overall procurement needs as protecting the health and 

safety of the community through the provision of highly reliable, effective disposal of 

sanitary refuse in a cost effective and administratively efficient manner while 

encouraging full and open competition among small business concerns for the 

agency’s refuse disposal requirements. Contracting Officer (CO) Statement at 7. 

Based on the market research results, the agency found that combining the portable 

and permanent latrine waste disposal services would substantially reduce contract 

costs by avoiding duplicative services in terms of overhead, manpower, materials 

and transportation costs. In reaching this conclusion the agency notes that 

approximately 63 percent of the permanent latrines are co-located with portable 

latrines and that, based on the RFI responses, the services are substantially the 

same, utilizing the same personnel, skills, and equipment. Id. at 6, 8. Further, the 

agency determined that combining these requirements under one contract would 

reduce the agency’s administrative costs by eliminating the costs associated with 

conducting and overseeing separate acquisitions, as well as the costs and 

inefficiencies associated with performing potentially twice as many inspections, 

which would only be required if the requirements are separately procured since the 

majority of the portable and permanent latrines are co-located. Id. at 8. 

Additionally, given the RFI responses indicating that firms did not desire to compete 

for smaller requirements, the agency was concerned that competition for the 

significantly smaller permanent latrine requirement would be limited if it was 

separately procured.

4

 Id. Based on the above considerations, the agency 

maintains that it was reasonably necessary to combine the portable and permanent 

latrine waste disposal requirements. 

The record, to include the RFI responses, confirms the agency’s findings and the 

reasonableness of the agency’s decision to combine its portable and permanent 

 4 The record reflects that there are approximately 750 portable latrines, and 

approximately 50 permanent latrines. CO Statement at 1.
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latrine disposal requirements. As noted above, most of the contractors that 

responded to the RFI expressly indicated that separating the requirements would 

increase their prices, and the protester has not challenged the factual bases for the 

agency’s asserted operational savings associated with using two separate 

contractors to service the portable and permanent latrines, the majority of which are 

co-located. Further, as the agency points out, the RFI responses contradict the 

protester’s general assertion that separating the requirements would increase

competition among small businesses. In this regard, based on the RFI responses, 

the agency was reasonably concerned that separating the requirements could 

potentially decrease competition since at least one otherwise interested small 

business stated that it would not be worthwhile for the firm to compete for the 

smaller, separated requirements, and another firm pointed out that the smaller 

requirements would be less financially attractive to firms located outside the 

geographical area. Moreover, notwithstanding the protester’s assertions to the 

contrary, the results of the agency’s market research do not reflect a need for 

different specialized equipment or personnel when performing the portable latrine 

waste disposal services as compared with the permanent latrine disposal services. 

As the agency reasonably found, the RFI responses uniformly indicate that the 

services are substantially similar.

Although the protester ultimately disagrees with the agency’s conclusion that 

procuring the portable and permanent latrine waste disposal services on a 

combined basis is reasonably necessary to meet its needs, and believes that the 

agency should not have relied on the market research results because, in the 

protester’s view, the RFI responses do not accurately reflect the industry, it has not 

shown that the agency’s findings of cost savings, operational efficiencies, and the 

potential for enhanced competition, were unreasonable.5

 See U.S. 

Electrodynamics, Inc., supra

 5 We find unpersuasive the protester’s reliance on our decision in Vantex Serv.

Corp., B-290415, Aug. 8, 2002, 2002 CPD ¶ 131, in which we sustained a protest of 

the agency’s consolidation of portable and permanent latrine services. Unlike here, 

in Vantex, the agency presented little, if any, explanation of its anticipated cost 

savings, lacked market research to support its consolidation decision, and had only

received minimal competition for the consolidated requirement. Also, unlike here, in 

Vantex, additional firms had expressed interest in separating the requirements, 

suggesting increased competition could reasonably be anticipated by separating the 

work. Conversely, the agency here had multiple expressions of interest from small 

business firms that perform both portable and permanent latrine services. In fact, 

one firm reported that in the last 10 to 15 years, (which we note was a similar time 

period as when we issued the Vantex decision), the sanitary waste industry has 

grown to include numerous firms that perform both portable and permanent latrine

(including septic tank) services.

. Accordingly, we have no basis to question the 
Page 6 B-406980 

propriety of the agency’s decision to procure, on a combined basis, the portable and 

permanent latrine disposal services at issue.

The protest is denied.

Lynn H. Gibson

General Counsel