The Government Accountability Office has dismissed a protest that could have opened billions of dollars in new set-aside contract opportunities.

FitNet Purchasing of St. Augustine, FL, argued that GSA schedule orders must be set aside for small businesses if they are worth between $3,000 and $150,000, the simplified acquisition threshold. The Small Business Act provides that procurements in that price range be set aside, but GSA contended that the schedules are exempt from the requirement.

GAO ruled that Fitnet had no standing to protest because it is not a GSA schedule holder. The decision makes no ruling on the merits of the protest.

However, GAO said the 2010 Small Business Jobs Act, which allows but does not require set-asides on schedule orders, “appears to address, and possibly settle, this issue.”

FitNet protested the Army’s RFQ to buy fitness equipment through a reverse auction restricted to GSA schedule holders.

SBA and several advocacy groups had supported FitNet’s position. “There is nothing in the Small Business Act that provides for a statutory exception of this automatic reservation for small businesses for acquisitions conducted using the GSA Schedule or reverse auctions,” SBA Associate General Counsel John Klein wrote to GAO. (SAA, 1/13)

FitNet’s president, Raul Espinosa, said he is exploring legal options and will urge Congress to mandate set-asides on schedule orders and reverse auctions below $150,000.

GSA schedule sales totaled $39 billion last year, with more than one-third of the dollars going to small businesses. The new interim rule allowing orders to be set aside at the contracting officer’s discretion took effect in November 2011.

The case is B-406075, available at www.gao.gov.