AGENCIES MUST CONSIDER APPLICATION TO RULE OF TWO REQUIREMENTS FOR ACQUISITIONS
Federal agencies must consider whether a procurement can be set-aside for small businesses under the FAR 19 “Rule of Two” requirements as part of their acquisition planning process. The Court of Federal Claims (COFC) affirmed this requirement recently in Tolliver Grp. Inc. v. United States, but may have confused the matter in so doing. First, it is important to note that nothing in the new COFC ruling changes the ability of agencies to conduct acquisitions pursuant to FAR 8.4. Federal agencies are still able to buy from GSA Schedule contracts, just as they were before. They may, of course, set-aside a procurement for small businesses, but they are not required to do so. What the COFC really said in Tolliver is that an agency can’t bypass the need to consider whether small businesses are capable of meeting a procurement action. Merely deciding that an IDIQ contract is the appropriate acquisition method does not indicate that this requirement has been satisfied. In Tolliver, the Army originally awarded a contract under a set-aside acquisition. The losing small business protested and the Army cancelled the award and went back to the drawing board. Its new plan was to acquire its needs via a newly-competed IDIQ contract that did not include small businesses. The original small business protested and the COFC agreed. The Court said that the Army had to make a new Rule of Two determination as they were conducting a new procurement. They could not bypass that requirement in favor of using the new IDIQ. Agencies must show that they considered using small businesses in their acquisition planning file and then decide on an acceptable acquisition method.