B-168703, MAR. 26, 1970

B-168703, MAR. 26, 1970

CONTRACTS--AWARDS--SMALL BUSINESS CONCERNS--SIZE--STATUS OBJECTION TIMELINESS CONTRACT AWARDED PURSUANT TO 100 PERCENT SMALL BUSINESS SET-ASIDE SOLICITATION FOR WARDROBES, TO LOW BIDDER WHO SUBCONTRACTED SOME WORK TO FIRM WHICH SBA SUBSEQUENTLY DETERMINED WAS LARGE BUSINESS, IS AFFIRMED. SIZE PROTEST WAS NOT RECEIVED UNTIL AFTER AWARD, THEREFORE SBA DETERMINATION AFFECTS ONLY FUTURE PROCUREMENTS, AND ON BID'S FACE CONTRACTOR HAD MADE NECESSARY CERTIFICATION AND WAS BOUND TO HAVE PRODUCT WARDROBES MANUFACTURED BY SMALL BUSINESS CONCERN. FURTHER, SUBCONTRACT TO LARGE BUSINESS DOES NOT CONSTITUTE BREACH OF CONTRACT SO LONG AS SMALL BUSINESS CONTRACTOR CONTRIBUTES SIGNIFICANTLY TO MANUFACTURE OF CONTRACT END ITEM. SEE B-166727, JULY 15, 1969.

TO AMSTORE CORPORATION:

WE REFER TO YOUR PROTEST FORWARDED HERE QUESTIONING THE AWARD OF A CONTRACT TO PETERSON-RATHBUN CONSTRUCTION COMPANY UNDER INVITATION FOR BIDS NO. N62474-70-C-0581 ISSUED BY THE NAVAL FACILITIES ENGINEERING COMMAND.

THE SOLICITATION, ISSUED ON AUGUST 25, 1969, CALLED FOR 1,000 WARDROBES WITH CHESTS FOR ENLISTED MEN'S BARRACKS AT THE SAN FRANCISCO BAY NAVAL SHIPYARD, VALLEJO, CALIFORNIA. AT BID OPENING ON OCTOBER 23, 1969, IT WAS DETERMINED THAT PETERSON-RATHBUN CONSTRUCTION COMPANY WAS THE LOW BIDDER IN THE AMOUNT OF $195,740; AMSTORE CORPORATION WAS THE SECOND LOWEST BIDDER WITH A BID IN THE AMOUNT OF $207,500. AWARD WAS MADE TO PETERSON- RATHBUN ON OCTOBER 29, 1969.

THE SOLICITATION WAS A 100 PERCENT SET-ASIDE FOR SMALL BUSINESS CONCERNS. FOR PURPOSES OF THIS PROCUREMENT, THE SMALL BUSINESS SIZE STANDARD WHICH APPLIED WAS THAT THE NUMBER OF EMPLOYEES OF THE CONCERN AND ITS AFFILIATES COULD NOT EXCEED 500 PERSON. THE CONTRACT AWARDED TO PETERSON-RATHBUN CONTAINED STANDARD FORM 33 ON THE REVERSE SIDE OF WHICH THE OFFEROR CERTIFIED THAT HE IS A SMALL BUSINESS CONCERN AND THAT ALL SUPPLIES TO BE FURNISHED WOULD BE MANUFACTURED OR PRODUCED BY A SMALL BUSINESS CONCERN. BY TELEGRAM DATED NOVEMBER 24, 1969, TO THE NAVAL FACILITIES ENGINEERING COMMAND, AMSTORE CORPORATION PROTESTED THE AWARD TO PETERSON-RATHBUN ON THE GROUND THAT THE MANUFACTURING OF THE WARDROBES HAD BEEN SUBCONTRACTED TO STANDARD PRESS STEEL CORPORATION (SPS) WHICH DID NOT QUALIFY AS A SMALL BUSINESS, ALLEGING THAT SPS WAS A CONCERN WHICH EMPLOYED MORE THAN 9,000 PERSONS.

ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-703 (B) (1) PROVIDES, IN PART, AS FOLLOWS:

"(1) PROTEST OF SMALL BUSINESS STATUS. ANY BIDDER OR OFFEROR MAY, IN CONNECTION WITH A CONTRACT INVOLVING A SMALL BUSINESS SET ASIDE OR OTHERWISE INVOLVING SMALL BUSINESS PREFERENTIAL CONSIDERATION, QUESTION THE SMALL BUSINESS STATUS OF ANY APPARENTLY SUCCESSFUL BIDDER OR OFFEROR BY SENDING A WRITTEN PROTEST TO THE CONTRACTING OFFICER RESPONSIBLE FOR THE PARTICULAR PROCUREMENT. THE PROTEST SHALL CONTAIN THE BASIS FOR THE PROTEST TOGETHER WITH SPECIFIC DETAILED EVIDENCE SUPPORTING THE PROTESTANT'S CLAIM THAT SUCH BIDDER OR OFFEROR IS NOT A SMALL BUSINESS. SUCH PROTEST MUST BE RECEIVED BY THE CONTRACTING OFFICER PRIOR TO THE CLOSE OF BUSINESS ON THE FIFTH WORKING DAY EXCLUSIVE OF SATURDAY, SUNDAY, AND FEDERAL LEGAL HOLIDAYS (HEREINAFTER REFERRED TO AS WORKING DAY) AFTER BID OPENING DATE FOR FORMALLY ADVERTISED AND SMALL BUSINESS RESTRICTED ADVERTISED PROCUREMENTS. * * *" ASPR 1-703 (B) (1) (III) PROVIDES:

"ACTION ON PROTESTS RECEIVED AFTER AWARD -- A PROTEST RECEIVED AFTER AWARD OF A CONTRACT SHALL BE FORWARDED TO THE SMALL BUSINESS ADMINISTRATION REGIONAL OFFICE SERVING IN THE AREA IN WHICH THE PROTESTED CONCERN IS LOCATED WITH A NOTATION THEREON THAT AWARD HAS BEEN MADE. THE PROTESTANT SHALL BE NOTIFIED THAT AWARD HAS BEEN MADE AND THAT HIS PROTEST HAS BEEN FORWARDED TO SBA FOR ITS CONSIDERATION IN FUTURE ACTIONS." LETTER OF DECEMBER 29, 1969, THE SMALL BUSINESS ADMINISTRATION, REGIONAL OFFICE, SAN FRANCISCO, DETERMINED THAT SPS WAS INDEED A BIG BUSINESS WHICH WAS MANUFACTURING COMPLETED CABINETS IN NON-ASSEMBLED CONDITION. HOWEVER, SINCE AMSTORE CORPORATION'S PROTEST WAS NOT RECEIVED IN A TIMELY MANNER, IN ACCORDANCE WITH SBA REGULATIONS, 13 CFR 121.3-5 (A) (SEE ALSO ASPR 1- 703 (B) (1) QUOTED ABOVE) THEY STATED THEIR DETERMINATION DID NOT AFFECT THE INSTANT PROCUREMENT BUT WAS FOR USE IN FUTURE PROCUREMENTS.

ACCORDING TO THE REGULATIONS QUOTED ABOVE, ANY QUESTION AS TO THE BIDDER'S SIZE SHOULD BE DECIDED BEFORE AWARD. HOWEVER, THE INSTANT PROCUREMENT DOES NOT INVOLVE THE CONTRACTOR'S SIZE BUT RATHER THAT OF A SUBCONTRACTOR. PETERSON-RATHBUN'S BID INDICATED THE ITEM WOULD BE MANUFACTURED BY SMALL BUSINESS. THE CONTRACTING OFFICER KNEW OF NO BASIS FOR QUESTIONING THAT INFORMATION AND NO PROTEST WAS RAISED PRIOR TO AWARD BY ANY PARTY. ON THE FACE OF ITS BID, PETERSON-RATHBUN HAD MADE THE NECESSARY CERTIFICATION AND WAS BOUND TO HAVE THE WARDROBES MANUFACTURED BY A SMALL BUSINESS CONCERN. WE ARE OF THE OPINION THAT THE CONTRACT WAS PROPERLY AWARDED IN ACCORDANCE WITH APPLICABLE REGULATIONS AND FIND NO BASIS TO QUESTION THE PROPRIETY OF THE AWARD.

WE MIGHT ALSO POINT OUT THAT PETERSON-RATHBUN'S SUBCONTRACT WITH SPS WAS NOT A BREACH OF ITS CONTRACT WITH THE GOVERNMENT. WE ARE INFORMED THAT THE UNITS BEING FURNISHED BY SPS ARE UNASSEMBLED AND CONSIST ONLY OF FRAMEWORK. PETERSON-RATHBUN IS PURCHASING THE REMAINING PARTS FROM OTHER SMALL BUSINESS SUPPLIERS AND IS DOING ALL OF THE ASSEMBLY WORK ITSELF. A SIMILAR SITUATION, OUR OFFICE STATED IN B-166727, JULY 15, 1969:

"* * * SO LONG AS THE SMALL BUSINESS FIRM, WHICH HAS SUBCONTRACTED A MAJOR PORTION OF THE WORK TO LARGE BUSINESS, MAKES SOME SIGNIFICANT CONTRIBUTION TO THE MANUFACTURE OR PRODUCTION OF THE CONTRACT END ITEM, THE CONTRACTUAL REQUIREMENT THAT THE 'END ITEM' BE MANUFACTURED OR PRODUCED BY SMALL BUSINESS CONCERNS HAS BEEN MET. SEE 39 COMP. GEN. 435; B-148155, SUPRA; B-154207, NOVEMBER 20, 1964." WE BELIEVE THE INSTANT CASE FALLS WITHIN THE ABOVE-QUOTED ANALYSIS AND THUS CONCLUDE THAT PETERSON-RATHBUN IS NOT IN BREACH OF THE SUBJECT CONTRACT.