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B-140100, OCT. 14, 1959

B-140100 Oct 14, 1959
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VAN SICKLE: FURTHER REFERENCE IS MADE TO YOUR LETTERS DATED JULY 1 AND SEPTEMBER 10. BIDS WERE REQUESTED FOR FURNISHING TWO ITEMS OF AIRCRAFT PARTS. BIDS WERE PUBLICLY OPENED ON JANUARY 8. WHICH WAS THE LOWEST BID RECEIVED ON THAT ITEM. THE NEXT LOW BID WAS $0.086 PER UNIT. IT WAS DISCLOSED THAT YOU DID NOT QUALIFY AS A DEALER. THE CONTRACTING OFFICER WAS ADVISED ON FEBRUARY 18. BY THAT OFFICE THAT ITS INVESTIGATION DISCLOSED THAT YOU WERE NOT A MANUFACTURER AS THE TERM IS USED IN THE ARMED SERVICES PROCUREMENT REGULATION. THIS FINDING WAS CONCURRED IN BY HEADQUARTERS AIR MATERIEL COMMAND. SINCE YOU WERE NOT A MANUFACTURER AS REPRESENTED IN YOUR BID. YOU WERE NOT A RESPONSIBLE BIDDER AND.

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B-140100, OCT. 14, 1959

MR. L. J. VAN SICKLE:

FURTHER REFERENCE IS MADE TO YOUR LETTERS DATED JULY 1 AND SEPTEMBER 10, 1959, IN WHICH YOU PROTEST CERTAIN PROCUREMENT CONTRACT AWARDS MADE UNDER THREE INVITATIONS FOR BIDS ISSUED BY THE DIRECTORATE OF PROCUREMENT AND PRODUCTION, OKLAHOMA CITY AIR MATERIEL AREA, TINKER AIR FORCE BASE, OKLAHOMA.

BY INVITATION NO. 34-601-59-247/PH), ISSUED DECEMBER 18, 1958, BIDS WERE REQUESTED FOR FURNISHING TWO ITEMS OF AIRCRAFT PARTS. ITEM NO. 1 CONSISTED OF 8,700 BEARINGS AND ITEM NO. 2 CALLED FOR 1,100 FITTINGS. BIDS WERE PUBLICLY OPENED ON JANUARY 8, 1959. YOU SUBMITTED A UNIT BID PRICE OF $0.07 FOR ITEM NO. 1, WHICH WAS THE LOWEST BID RECEIVED ON THAT ITEM. THE NEXT LOW BID WAS $0.086 PER UNIT.

IN YOUR BID YOU REPRESENTED YOURSELF AS A MANUFACTURER. IN VIEW OF RECENT PRIOR EXPERIENCES IN WHICH YOU HAD REPRESENTED YOURSELF AS A REGULAR DEALER BUT, UPON SUBSEQUENT INVESTIGATION, IT WAS DISCLOSED THAT YOU DID NOT QUALIFY AS A DEALER, THE CONTRACTING OFFICER ON FEBRUARY 11, 1959, PURSUANT TO AIR FORCE PROCEDURES AND REGULATIONS, REQUESTED ADVICE FROM THE DALLAS AIR PROCUREMENT DISTRICT OFFICE, DALLAS, TEXAS, AS TO WHETHER YOU QUALIFIED AS A MANUFACTURER. THE CONTRACTING OFFICER WAS ADVISED ON FEBRUARY 18, 1959, BY THAT OFFICE THAT ITS INVESTIGATION DISCLOSED THAT YOU WERE NOT A MANUFACTURER AS THE TERM IS USED IN THE ARMED SERVICES PROCUREMENT REGULATION, THAT YOU HAD NOT ENTERED INTO A MANUFACTURING ACTIVITY OF THE TYPE REQUIRED BY THE INVITATION, AND, ALSO, THAT YOU DID NOT QUALIFY EITHER AS A BROKER OR A MANUFACTURER'S REPRESENTATIVE WITHIN THE MEANING OF THOSE TERMS AS USED IN THE RULINGS AND INTERPRETATIONS OF THE DEPARTMENT OF LABOR. THIS FINDING WAS CONCURRED IN BY HEADQUARTERS AIR MATERIEL COMMAND, WRIGHT PATTERSON AIR FORCE BASE, OHIO, ON FEBRUARY 25, 1959, WHICH AUTHORIZED THE CONTRACTING OFFICER TO REJECT THE LOW BID AND AWARD THE CONTRACT TO THE NEXT LOWEST RESPONSIBLE BIDDER. THEREFORE, ON THE BASIS OF THAT INFORMATION, THE CONTRACTING OFFICER DETERMINED THAT, SINCE YOU WERE NOT A MANUFACTURER AS REPRESENTED IN YOUR BID, YOU WERE NOT A RESPONSIBLE BIDDER AND, ACCORDINGLY, ON MARCH 2, 1959, HE AWARDED ITEM NO. 1 ON CONTRACT NO. AF 34/601/-6152, TO THE NEXT LOW BIDDER AT A UNIT PRICE OF $0.086.

BY INVITATION FOR BIDS NO. 34-601-59-302, ISSUED ON FEBRUARY 4, 1959, BIDS WERE REQUESTED FOR FURNISHING 9,550 CARTRIDGE ASSEMBLIES. BIDS WERE OPENED ON FEBRUARY 25, 1959, AND YOUR UNIT PRICE BID OF $1.46 WAS THE LOWEST BID RECEIVED. THE NEXT LOW BID WAS $1.82.

PRIOR TO MAKING AN AWARD UNDER THIS INVITATION, THE CONTRACTING OFFICER ON MARCH 4, 1959, INQUIRED OF THE DALLAS AIR PROCUREMENT DISTRICT OFFICE AS TO WHETHER THE PREVIOUSLY FURNISHED INFORMATION THAT YOU DID NOT QUALIFY AS A RESPONSIBLE BIDDER WOULD BE APPLICABLE TO THIS PROCUREMENT. BY LETTER DATED MARCH 11, 1959, HE WAS ADVISED THAT THE CONDITIONS PREVIOUSLY REPORTED ON THE QUESTION AS TO WHETHER YOU WERE A DEALER OR MANUFACTURER REMAINED UNCHANGED AND, FURTHER, THAT A REPRESENTATIVE OF THE SMALL BUSINESS ADMINISTRATION, DALLAS REGIONAL OFFICE, ADVISED THAT YOU HAD REQUESTED THE SMALL BUSINESS ADMINISTRATION TO CERTIFY YOU AS A MANUFACTURER AND THAT YOUR REQUEST HAD BEEN DENIED. ON THE BASIS OF THAT INFORMATION, THE CONTRACTING OFFICER CONCLUDED THAT SINCE YOU DID NOT QUALIFY AS A MANUFACTURER YOU WERE NOT A RESPONSIBLE BIDDER. HE, THEREFORE, ON APRIL 25, 1959, AWARDED CONTRACT NO. AF 34/601/-6351 ON INVITATION FOR BIDS NO. 34-601 59-302 TO ANOTHER BIDDER AT A UNIT PRICE OF $1.82.

INVITATION FOR BIDS NO. 34-601-59-314/PBH), ISSUED FEBRUARY 9, 1959, REQUESTED BIDS FOR FURNISHING 3,025 CABLE ASSEMBLIES OF A CERTAIN DESCRIPTION. BIDS WERE OPENED ON FEBRUARY 27, 1959. YOU SUBMITTED THE LOWEST BID AT $0.79 PER UNIT. IN YOUR BID YOU AGAIN REPRESENTED YOURSELF AS A MANUFACTURER. THE CONTRACTING OFFICER MADE THE SAME INQUIRY TO THE AIR PROCUREMENT OFFICE AT DALLAS, TEXAS, WITH RESPECT TO YOUR STATUS AS A MANUFACTURER AND, IN REPLY, WAS ADVISED THAT THE PREVIOUS INFORMATION GIVEN AS TO INVITATION FOR BIDS NO. 34-601-59-302 WAS APPLICABLE TO THE BID UNDER CONSIDERATION. ON THE BASIS OF THAT INFORMATION, THE CONTRACTING OFFICER CONCLUDED THAT SINCE YOU DID NOT QUALIFY AS A MANUFACTURER YOU WERE NOT A RESPONSIBLE BIDDER. ACCORDINGLY, ON APRIL 9, 1959, HE AWARDED CONTRACT NO. AF 34-/601/-6457 UNDER INVITATION FOR BIDS NO. 34-601-59-314/PBH) TO ANOTHER BIDDER.

THE SUBSTANCE OF YOUR PROTESTS AS TO THESE CONTRACTS IS THAT THE AWARDS SHOULD HAVE BEEN MADE TO YOU AS LOW BIDDER, AND YOU PREMISE YOUR PROTESTS FIRST ON THE ALLEGATION THAT, BECAUSE OF A LETTER SENT BY THE DEPARTMENT OF LABOR TO THE DALLAS AIR PROCUREMENT DISTRICT ON APRIL 2, 1959, AND RECEIVED BY THE OKLAHOMA CITY AIR MATERIEL AREA ON APRIL 8, 1959, WHICH CONTAINED A RULING OF THE DEPARTMENT THAT SINCE YOU ASSEMBLED MISCELLANEOUS PARTS ON YOUR PREMISES YOU QUALIFIED AS A MANUFACTURER OF THESE PARTS UNDER THE RULES AND INTERPRETATIONS OF THE DEPARTMENT OF LABOR PURSUANT TO THE WALSH-HEALEY PUBLIC CONTRACTS ACT, THE DECISION OF THE CONTRACTING OFFICER THAT YOU WERE NOT A QUALIFIED BIDDER UNDER THE SUBJECT INVITATIONS WAS ERRONEOUS AND THAT YOU AS THE QUALIFIED LOW BIDDER, THEREFORE, SHOULD HAVE RECEIVED THE AWARDS.

WHILE THE LETTER DATED APRIL 2, 1959, FROM THE DEPARTMENT OF LABOR HOLDING THAT YOU WERE A ,MANUFACTURER" APPARENTLY HAD BEEN RECEIVED BY THE OKLAHOMA CITY AIR MATERIEL AREA ON APRIL 8, 1959, AND PRIOR TO THE MAKING OF THE TWO LATEST AWARDS, THE RECORDS BEFORE OUR OFFICE INDICATE THAT THAT HOLDING HAD NOT BEEN COMMUNICATED TO OR MADE KNOWN TO THE CONTRACTING OFFICER AT THE TIME HE MADE THE AWARDS IN QUESTION, BUT THAT THE ONLY RULINGS AND DECISIONS BEFORE HIM AND OF WHICH HE WAS AWARE AT THE TIME OF MAKING THE AWARDS WERE TO THE EFFECT THAT YOU DID QUALIFY AS A MANUFACTURER AND THAT YOU WERE NOT CONSIDERED TO BE A RESPONSIBLE BIDDER UNDER THE INVITATIONS. IT IS UNFORTUNATE THAT YOU WERE DEPRIVED OF THE AWARDS BECAUSE OF THE DEFICIENCIES OF THE PROCUREMENT ACTIVITY IN TIMELY BRINGING THE INFORMATION TO THE ATTENTION OF THE CONTRACTING OFFICER, BUT SINCE THE CONTRACTING OFFICER ACTED IN GOOD FAITH ON THE INFORMATION THEN AVAILABLE TO HIM WE DO NOT THINK THAT THE AWARDS SHOULD BE DISTURBED. THE DEPARTMENT OF THE AIR FORCE RECOGNIZES THESE DEFICIENCIES AND HAS ADVISED US THAT IT HAS TAKEN STEPS TO INSURE THAT SUCH INFORMATION WILL, IN THE FUTURE, BE PROMPTLY COMMUNICATED WITHIN THE OKLAHOMA CITY AIR MATERIEL AREA TO ALL AFFECTED BUYERS AND CONTRACTING OFFICERS.

WITH REFERENCE TO YOUR SECOND ALLEGATION THAT NO NOTICE WAS GIVEN TO THE SMALL BUSINESS ADMINISTRATION OF THE INTENT TO AWARD THE CONTRACTS TO OTHER THAN THE LOW BIDDER, THE ARMED SERVICES PROCUREMENT REGULATION (ASPR 1-705.6) REQUIRES CONTRACTING OFFICERS TO NOTIFY THE SMALL BUSINESS ADMINISTRATION WHEN THE BID OF A SMALL BUSINESS IS TO BE REJECTED FOR REASONS OF CAPACITY OR CREDIT, AND WITHHOLD AWARD FOR THE DESIGNATED PERIOD DURING WHICH THE SMALL BUSINESS ADMINISTRATION MAY ISSUE A CERTIFICATE OF COMPETENCY, BUT ASPR 1-705.6/6) (C) PROVIDES THAT NO REFERRAL IS MANDATORY FOR CONTRACTS INVOLVING LESS THAN $10,000. FOR THAT REASON NO NOTICE WAS NECESSARY IN THE PROCUREMENTS HERE UNDER CONSIDERATION SINCE THE AMOUNT INVOLVED IN EACH WAS LESS THAN $10,000.

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