B-153616, JUN. 16, 1964

B-153616, JUN. 16, 1964

TO FOWLER, LEVA, HAWES AND SYMINGTON:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MAY 8, 1964, ON BEHALF OF TIMMONS, BUTT AND HEAD, INC., REQUESTING RECONSIDERATION OF OUR DECISION OF APRIL 21, 1964, WHICH DENIED THAT COMPANY'S PROTEST AGAINST THE AWARD OF A SMALL BUSINESS SET-ASIDE CONTRACT TO B. G. DANIS COMPANY INC., FOR THE CONSTRUCTION OF A SPECIAL RESEARCH BUILDING AT WRIGHT-PATTERSON AIR FORCE BASE, OHIO, UNDER INVITATION FOR BIDS NO. ENG-15-029-64-9.

ON FEBRUARY 27, 1964, THE SMALL BUSINESS ADMINISTRATION (SBA) REGIONAL OFFICE DETERMINED THAT B. G. DANIS COMPANY, INC., WAS NOT A SMALL BUSINESS CONCERN FOR GOVERNMENT CONSTRUCTION PROCUREMENT PURPOSES. THE BASIS FOR SUCH DETERMINATION WAS THAT THE RECEIPTS FROM A MANUFACTURING BUSINESS CONDUCTED BY THE DAYTON SURE GRIP AND SHORE COMPANY, INC., AN AFFILIATE OF B. G. DANIS COMPANY, WERE PROPERLY FOR CONSIDERATION IN THE SIZE DETERMINATION, AND THAT THE AVERAGE ANNUAL RECEIPTS OF BOTH COMPANIES EXCEEDED $7,500,000 FOR THE THREE MOST RECENT FISCAL YEARS. THIS REVERSED A SBA REGIONAL OFFICE DETERMINATION OF APRIL 25, 1963, THAT DANIS COMPANY WAS A SMALL BUSINESS FOR THE PURPOSE OF BIDDING ON GOVERNMENT CONSTRUCTION CONTRACTS. THE 1963 SBA DETERMINATION THAT DANIS COMPANY WAS A SMALL BUSINESS WAS BASED ON SUBSTANTIALLY THE SAME INFORMATION APPEARING IN DANIS COMPANY'S APPLICATION FOR SIZE DETERMINATION ON WHICH THE 1964 DETERMINATION TO THE CONTRARY WAS BASED, AND WE SO STATED IN OUR DECISION. OUR DECISION THEREFORE HELD THAT UNDER SUCH CIRCUMSTANCES IT WOULD BE IMPROPER TO REQUIRE CANCELLATION OF A CONTRACT AWARDED TO A BIDDER WHO NOT ONLY CERTIFIED ITSELF AS A SMALL BUSINESS IN GOOD FAITH, BUT ALSO, ON THE BASIS OF A RECENT DETERMINATION BY SBA HAD EVERY REASON TO BELIEVE THAT ITS SELF-CERTIFICATION WAS CORRECT.

YOUR REQUEST FOR RECONSIDERATION IS BASED UPON YOUR BELIEF THAT DANIS, IN FILING THE APPLICATIONS FOR SIZE DETERMINATION IN CONNECTION WITH THE SIZE DETERMINATIONS MADE BY SBA IN 1963 AND 1964 (1) HAD NOT LISTED SOUTHERN OHIO BUILDING SYSTEMS, INC., OF DAYTON, OHIO, AS AN AFFILIATE AND (2) HAD NOT DISCLOSED THAT DAYTON SURE GRIP AND SHORE COMPANY HAD ISSUED $100,000 WORTH OF CONVERTIBLE DEBENTURES TO ITS STOCKHOLDERS.

AS WE STATED IN OUR LETTER OF MAY 18, 1964, TO YOU, OUR RECORDS SHOW THAT DANIS COMPANY LISTED SOUTHERN OHIO BUILDING SYSTEMS, INC., AS AN AFFILIATE WITH 100 PERCENT OF ITS VOTING STOCK HELD BY DANIS IN THE APPLICATIONS FOR SIZE DETERMINATION FILED IN 1963 AND 1964. WITH RESPECT TO THE SECOND MATTER, THE SMALL BUSINESS ADMINISTRATION HAS ADVISED US THAT DANIS COMPANY WAS UNDER NO REGULATORY OBLIGATION TO SUBMIT INFORMATION PERTAINING TO CONVERTIBLE DEBENTURES IN CONNECTION WITH THE SIZE DETERMINATIONS IN QUESTION, AND IT WOULD THEREFORE APPEAR TO BE IMMATERIAL WHETHER SUCH INFORMATION WAS SUBMITTED.

ACCORDINGLY, UPON RECONSIDERATION, OUR DECISION OF APRIL 21, 1964, IS AFFIRMED.