Maersk Line is a large business in Norfolk VA, who protested (Maersk Line GAO Protest B-410280: 12/1/14) the terms of RFP N00033-14-R-3201, issued by the Navy Military Sealift Command (MSC) for multimodal cargo transportation services. Maersk challenged the agency’s decision to reserve the acquisition as a small business set-aside (SBSA). GAO denied the protest.
The requirement was for cargo transportation to “ports worldwide depending on National Security needs.” Each transport started in North Carolina, then moved to other US ports, then sailed to Saipan (US Territory of Northern Mariana Islands), and then returned to North Carolina.
The Contracting Officer (CO) stated that market research did not conclude that two or more competitive offers would be received from responsible small business concerns. So the CO used a tiered evaluation approach to promote small business participation and the agency’s small business specialist concurred.
The RFP stated if the government received two or more offers from responsible small businesses competitive in terms of prices, quality, and delivery, then offers from other than small businesses would not be considered and FAR 52.219-6 (Notice of Total Small Business Set-Aside) would be incorporated by reference. If the Government did not receive two or more offers from responsible small business concerns competitive in terms of market price, quality, and delivery; all offers will be considered for award.
MSC received timely proposals from Maersk and multiple small businesses. After proposal review, the agency issued an RFP amendment advising that two or more offers were received from responsible SB competitive in terms of price, quality, and delivery so FAR 52.219-6 is incorporated by reference.
Maersk contends that MSC should not have conducted this procurement in accordance with FAR Part 19.502-2(b) because the contract was to be performed outside of the United States and its outlying areas. FAR 19.000(b) states: “This part applies only in the United States or its outlying areas.” It should be noted that the Northern Mariana Islands are included within the FAR definition of outlying areas (FAR 2.101).
The requirement involves initial delivery in the US, loading of cargo in the US, and at the end of the contract, offloading in the US. While the vessel will visit ports world-wide, these depend upon the needs of national security and may CA as well as the Northern Mariana Islands, a U.S. territory. Based on this information, the agency concluded the procurement would not be performed “outside the United States.”
So if you look at this decision, you could conclude that as long as any part of the work is inside the US – no matter how small – FAR 19 applies and a SBSA may be used.