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B-194627, DEC 27, 1979

B-194627 Dec 27, 1979
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GAO IS UNABLE TO CONCLUDE THAT PROCURING AGENCY HAS EXCEEDED "FAIR PROPORTION" TEST FOR SMALL BUSINESS SET-ASIDE PROCUREMENTS INVOLVING "CULTURAL RESOURCE" WORK. 2. ALLEGATION THAT RUINOUS COMPETITION WILL ELIMINATE NONPROFIT INSTITUTIONS FROM CULTURAL RESOURCE WORK TO NATION'S DETRIMENT IS FOR CONGRESS AND EXECUTIVE BRANCH TO RESOLVE IF ACCURATE. SEC. 644) IS BEING RESERVED FOR SMALL BUSINESS. COLORADO) RELEASED A TOTAL OF 29 FISCAL 1979 PROCUREMENTS FOR CULTURAL RESOURCES AS OF JUNE 1979 - ONLY EIGHT OF WHICH WERE RESTRICTED TO SMALL BUSINESS. THE REGULATION ANNOUNCES THE TEST AS FOLLOWS: "(SMALL BUSINESS) SET-ASIDES SHALL BE EFFECTED WHEN IT IS DETERMINED TO BE *** IN THE INTEREST OF ASSURING THAT A FAIR PROPORTION OF GOVERNMENT PROCUREMENT IS PLACED WITH SMALL BUSINESS CONCERNS.".

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B-194627, DEC 27, 1979

DIGEST: 1. BECAUSE PREPONDERANCE OF GOVERNMENT CONTRACT DOLLARS FOR ANY GIVEN FISCAL YEAR HAS HISTORICALLY FLOWED TO OTHER THAN SMALL BUSINESSES, GAO IS UNABLE TO CONCLUDE THAT PROCURING AGENCY HAS EXCEEDED "FAIR PROPORTION" TEST FOR SMALL BUSINESS SET-ASIDE PROCUREMENTS INVOLVING "CULTURAL RESOURCE" WORK. 2. GAO CANNOT QUESTION INTERIOR'S VIEW THAT ANTIQUITIES ACT OF 1906 APPLIES ONLY TO PERSONS OR ORGANIZATIONS SEEKING TO EXPLORE PUBLIC LANDS RATHER THAN TO DEPARTMENT OR ITS CONTRACTORS. 3. ALLEGATION THAT RUINOUS COMPETITION WILL ELIMINATE NONPROFIT INSTITUTIONS FROM CULTURAL RESOURCE WORK TO NATION'S DETRIMENT IS FOR CONGRESS AND EXECUTIVE BRANCH TO RESOLVE IF ACCURATE.

COLORADO STATE UNIVERSITY:

COLORADO STATE UNIVERSITY (CSU) PROTESTS THE DEPARTMENT OF THE INTERIOR'S DECISION TO RESTRICT COMPETITION TO SMALL BUSINESS CONCERNS UNDER FIVE 1979 PROCUREMENTS FOR "CULTURAL RESOURCE"-RELATED WORK IN UTAH AND WYOMING. CSU ALSO CONTENDS THAT THE AWARDING OF INTERIOR "CULTURAL RESOURCE" CONTRACTS TO PROFIT MAKING CONCERNS VIOLATES THE ANTIQUITIES ACT OF 1906, 16 U.S.C. SEC. 431-433 (1976). WE DO NOT AGREE WITH THE PROTESTER'S POSITIONS FOR THE REASONS SET FORTH BELOW.

SMALL BUSINESS SET-ASIDES

CSU ARGUES THAT THE SETTING-ASIDE OF THESE FIVE PROCUREMENTS FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION NECESSARILY MEANS THAT MORE THAN A "FAIR PROPORTION OF THE (GOVERNMENT'S) TOTAL PURCHASES AND CONTRACTS FOR PROPERTY AND SERVICES" (SEE 15 U.S.C. SEC. 644) IS BEING RESERVED FOR SMALL BUSINESS. INTERIOR, HOWEVER, POINTS OUT THAT ITS PROCUREMENT ISSUING OFFICE (BUREAU OF LAND MANAGEMENT, DENVER, COLORADO) RELEASED A TOTAL OF 29 FISCAL 1979 PROCUREMENTS FOR CULTURAL RESOURCES AS OF JUNE 1979 - ONLY EIGHT OF WHICH WERE RESTRICTED TO SMALL BUSINESS. THUS, INTERIOR ARGUES THAT THE "FAIR PROPORTION" TEST OF THE STATUTORY IMPLEMENTING REGULATION (FEDERAL PROCUREMENT REGULATIONS SEC. 1-1.706 1(C) (1964 ED., AMEND. 192, JUNE 1978)) HAS NOT BEEN EXCEEDED. THE REGULATION ANNOUNCES THE TEST AS FOLLOWS:

"(SMALL BUSINESS) SET-ASIDES SHALL BE EFFECTED WHEN IT IS DETERMINED TO BE *** IN THE INTEREST OF ASSURING THAT A FAIR PROPORTION OF GOVERNMENT PROCUREMENT IS PLACED WITH SMALL BUSINESS CONCERNS."

IN 41 COMP.GEN. 649 (1962) WE FOUND THAT THE CONGRESS DID NOT DEFINE THE PHRASE "FAIR PROPORTION" BY REFERENCE TO OBJECTIVE STANDARDS. IN THE ABSENCE OF OBJECTIVE STANDARDS, WE HAVE BEEN UNABLE TO CONCLUDE THAT THE "FAIR PROPORTION" TEST HAS BEEN EXCEEDED AS TO A GIVEN SET-ASIDE PROCUREMENT RECOGNIZING THAT THE PREPONDERANCE OF GOVERNMENT CONTRACT DOLLARS FOR ANY GIVEN FISCAL YEAR HAS HISTORICALLY FLOWED TO OTHER THAN SMALL BUSINESSES. SEE, FOR EXAMPLE, 41 ID., ABOVE; J. H. RUTTER REX MANUFACTURING CO., INC., 55 COMP.GEN. 902 (1976), 76-1 CPD 182 (AND CASES CITED IN TEXT AT PAGES 7 AND 8); AND ALLIED MAINTENANCE CORPORATION, B-188522, OCTOBER 4, 1977, 77-2 CPD 259. THUS, INTERIOR HAS NOT EXCEEDED THE "FAIR PROPORTION" TEST FOR THE QUESTIONED PROCUREMENTS.

ANTIQUITIES ACT OF 1906

CSU ARGUES THAT THE AWARD OF "CULTURAL RESOURCE" CONTRACTS TO PROFIT MAKING CONCERNS (WHETHER SMALL OR OTHER THAN SMALL) OFFENDS 16 U.S.C. SEC. 432 (1976) BECAUSE PROFIT MAKING CONCERNS ARE NOT ELIGIBLE TO MAKE ARCHAEOLOGICAL EXAMINATIONS UNDER THE STATUTE. THE CITED STATUTE PROVIDES:

"PERMITS FOR THE EXAMINATION OF RUINS, *** MAY BE GRANTED *** TO INSTITUTIONS *** PROPERLY QUALIFIED TO CONDUCT SUCH EXAMINATION *** PROVIDED, THAT THE EXAMINATIONS *** ARE UNDERTAKEN FOR THE BENEFIT OF REPUTABLE MUSEUMS, UNIVERSITIES, COLLEGES, OR OTHER RECOGNIZED SCIENTIFIC OR EDUCATIONAL INSTITUTIONS ***"

INTERIOR ARGUES THAT THE CITED STATUTE APPLIES ONLY TO PERSONS OR ORGANIZATIONS SEEKING TO EXPLORE THE PUBLIC LANDS RATHER THAN THE DEPARTMENT OR ITS CONTRACTORS; MOREOVER, THE DEPARTMENT INSISTS THAT THE SMALL BUSINESSES ARE QUALIFIED TO DO THE WORK INVOLVED. IN REPLY, CSU DOES NOT QUESTION INTERIOR'S ARGUMENT BUT INSISTS THAT AWARD OF THESE CONTRACTS TO PROFIT MAKING CONCERNS CONFLICTS WITH THE "SPIRIT AND INTENT" OF THE LAW.

WE CANNOT QUESTION INTERIOR'S READING OF THE LAW, ESPECIALLY SINCE IT IS SIGNIFICANTLY RESPONSIBLE FOR ENFORCEMENT OF THE LAW. IT IS WELL SETTLED THAT "DEFERENCE (IS TO BE ACCORDED) TO THE INTERPRETATION GIVEN THE STATUTE BY THE OFFICERS OR AGENCY CHARGED WITH ITS ADMINISTRATION." UDALL V. TALLMAN, 380 U.S. 1, 16 (1965), AND CASES CITED IN TEXT. GIVEN THIS CONCLUSION, CSU'S ARGUMENT ABOUT THE "SPIRIT AND INTENT" OF THE LAW IS IRRELEVANT TO OUR LEGAL ANALYSIS.

RUINOUS COMPETITION

CSU FINALLY ARGUES THAT INTERIOR'S POLICY OF COMPETITIVE PROCUREMENTS FOR "CULTURAL RESOURCES" CONTRACTS, WHETHER RESTRICTED TO SMALL BUSINESS PARTICIPATION OR NOT, WILL RESULT IN RUINOUS COMPETITION AND ELIMINATE NONPROFIT, EDUCATIONAL INSTITUTIONS FROM THIS WORK TO THE DETRIMENT OF THE NATIONAL INTEREST. EVEN IF WE ACCEPT THE VALIDITY OF THIS ARGUMENT FOR THE SAKE OF DISCUSSION, THE SPECTER OF THE PROJECTED EVIL IS FOR THE CONGRESS AND THE EXECUTIVE BRANCH TO RESOLVE RATHER THAN OUR OFFICE.

PROTEST DENIED.

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