B-234196, May 1, 1989, 68 Comp.Gen. 411

B-234196, May 1, 1989, 68 Comp.Gen. 411

Procurement - Socio-Economic Policies - Small businesses - Preferred products/services - Certification Bidder's failure to certify that only end items that are manufactured or produced by small business concerns will be furnished does not affect the responsiveness of a bid where such small business certification is not required for the type of contract to be awarded.

G. Marine Diesel Corp.:

G. Marine Diesel Corp. protests the rejection of its low bid as nonresponsive and the award of a contract to Stevens Technical Services, Inc., under invitation for bids (IFB) No. DTCG80-88-B-00066, a total small business set-aside issued by the Coast Guard for drydocking and repair of the vessel "Minue." The agency rejected G. Marine's bid because the firm did not certify that all end items to be furnished under the contract would be manufactured or produced by small business concerns. We sustain the protest.

At bid opening on December 6, 1988, the agency received eight bids; G. Marine was the low bidder. Because G. Marine failed to certify that all end items to be furnished under the contract would be manufactured or produced by a small business concern, the agency found its bid nonresponsive. The contract was awarded to the next low bidder, Stevens, on January 10, 1989. G. Marine filed this protest on January 18. Because the protest was filed within 10 calendar days of the award, the Coast Guard suspended performance of the contract pursuant to 31 U.S.C. Sec. 3553(d)(1) (Supp. IV 1986).

The IFB included the clause set forth at Federal Acquisition Regulation (FAR) Sec. 52.219-1, which contains the end item certification which is in dispute here. According to G. Marine, it filled out the small business certification indicating that "not all end items to be furnished will be manufactured or produced by a small business concern" because some materials, which are to be used in the repair of the vessel, are not available from small businesses. In response, the agency states that the end item to which the representation pertains is the repaired vessel itself, not the individual parts used in performing the repairs. Whether the certification was intended to apply to the vessel itself or to the individual parts used by the contractor is not the dispositive issue, owever, since, as explained below, it is our view that the representation is not required for the type of contract to be awarded under the IFB.

The protester argues, among other things, that the solicitation was one for services, which the standard Notice of Small Business Set-Aside Clause included in the IFB states does not require the end item certification. See FAR Sec. 52.219-6(c).

The Coast Guard responds that the contract called for by the solicitation is, in fact, a supply contract so the end item certification does apply. /1/ In support of its position, the Coast Guard first refers to 10 U.S.C. Sec. 7299 (1982) which states:

"Each contract for the construction, alteration, furnishing, or equipping of a naval vessel is subject to the Act entitled 'An Act to provide conditions for the purchase of supplies and the making of contracts by the United States, and for other purposes', approved June 30, 1936 (41 U.S.C. Sec. 35-45), /2/ as amended, unless the President determines that this requirement is not in the interest of national defense."

The Coast Guard also says that its position that a contract for ship repair is one for supplies is supported by our decision in 42 Comp.Gen. 467 (1963). According to the agency, since in that decision we agreed with the Navy's classification of a contract for the construction or alteration of a naval vessel as the procurement of supply items under the Buy American Act, 41 U.S.C. Sec. 10a-d (1982), the subject ship repair solicitation should also be classified as one for supplies for purposes of the small business certification.

In Century Marine Corp., B-233574, Mar. 3, 1989, 68 Comp.Gen. ***, 89-1 CPD Para. 235, and Delta Marine, Inc., B-234169, Mar. 31, 1989, 68 Comp.Gen. ***, 89-1 CPD Para. 348 we recently held that solicitations, like the one here, for drydocking and repair services to Coast Guard and Maritime Administration vessels, by their nature, contemplate the award of contracts for services rather than for supplies. agency show that our conclusion in those decisions was incorrect.

First, 10 U.S.C. Sec. 7299 does not refer to ship repair and the Coast Guard does not explain why a ship repair contract should be considered to fall under 10 U.S.C. Sec. 7299. Further, the purpose of that legislation was to make clear the view of Congress that contracts for the construction or alteration of vessels are subject to the Walsh Healey Act. See 42 Comp.Gen. 467, at 477, supra. The legislation does not relate to whether ship repair contracts are to be considered service or supply contracts. Also, in 42 Comp.Gen. 467, supra, we addressed the question of whether a contract for the alteration of a vessel should be governed by that portion of the Buy American Act pertaining to public works or to that section pertaining to supplies. The decision did not consider whether a ship repair contract is to be considered one for services or supplies.

It is most significant, in our view, that the Coast Guard makes no argument that the classification of such a repair contract as one for supplies is logical. We do not understand how it can be argued that as between the two categories-- supplies or services-- a contract for the repair of a vessel is classified as one for the vessel itself rather than for the repair services to performed on that vessel. Since we think the solicitation was properly one for services, the protester's failure to complete the Small Business certification does not affect the responsiveness of the bid. BCI Contractors, Inc., B-232453, Nov. 7, 1988, 88-2 CPD Para. 451. We therefore conclude that the protester's low bid was improperly rejected and we sustain the protest.

Since the Coast Guard considered the contract here to be one for supplies, the solicitation included clauses and certifications appropriate to a supply contract rather than those for a service-type contract. recommend that the contract awarded to Stevens be terminated for the convenience of the government and the requirement resolicited as a service contract with the clauses and certifications appropriate to a service contract. In addition, we find G. Marine entitled to recover the reasonable costs of preparing and submitting its bid and the costs of filing and pursuing the protest, including attorneys' fees. Bid Protest Regulations, 4 C.F.R. Sec. 21.6(d) (1988). G. Marine should submit its claim for such costs directly to the Coast Guard.

The protest is sustained.

/1/ The Coast Guard also argues that this issue-- whether the solicitation was one for services as opposed to supplies-- is untimely since it was not raised by the protester before bid opening. We need not consider this argument. Under our Bid Protest Regulations, 4 C.F.R. Sec. 21.2(b) (1988), 23 we will consider an untimely protest where, as here, we find on the basis of the fully developed record that a significant issue has been raised by the protester. See Loral EOS/STS, Inc., B-230013, May 18, 1988, 88-1 CPD Para. 467.

/2/ 41 U.S.C. Secs. 35-45 is the Walsh-Healey Public Contracts Act, which concerns minimum wages and maximum hours under certain supply contracts.