B-140662, NOV. 2, 1959

B-140662: Nov 2, 1959

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TO V/H LEO WIJNBERG COMPANY: FURTHER REFERENCE IS MADE TO A LETTER OF SEPTEMBER 1. YOUR BID WAS REJECTED AS NONRESPONSIVE AND AWARDS WERE MADE TO AMERICAN COPPER SPONGE CO. THE FOLLOWING CERTIFICATE WAS INCLUDED IN THE INVITATION: "BUY AMERICAN CERTIFICATE "THE BIDDER HEREBY CERTIFIES THAT EACH END PRODUCT. IS A DOMESTIC SOURCE END PRODUCT (AS DEFINED IN THE CONTRACT CLAUSE ENTITLED BUY AMERICAN ACT). THAT COMPONENTS OF UNKNOWN ORIGIN HAVE BEEN CONSIDERED TO HAVE BEEN MINED. THE REFERRED-TO CLAUSE ENTITLED BUY AMERICAN ACT PROVIDES IN PART: "/B) THE CONTRACTOR AGREES THAT THERE WILL BE DELIVERED UNDER THIS CONTRACT ONLY DOMESTIC SOURCE END PRODUCTS. EXCEPT END PRODUCTS: "/I) WHICH ARE FOR USE OUTSIDE THE UNITED STATES.

B-140662, NOV. 2, 1959

TO V/H LEO WIJNBERG COMPANY:

FURTHER REFERENCE IS MADE TO A LETTER OF SEPTEMBER 1, 1959, WITH ITS ENCLOSURE, FROM YOUR AGENT, MR. BLANKA A. TUCKER, PROTESTING AGAINST AWARDS TO OTHER BIDDERS UNDER INVITATION FOR BIDS NO. JB-IFB 155-/4-8/- 3179-59 ISSUED BY THE DEPARTMENT OF THE NAVY, GENERAL STORES SUPPLY OFFICE, PHILADELPHIA, PENNSYLVANIA, ON JUNE 11, 1959.

THE INVITATION REQUESTED BIDS--- TO BE OPENED JULY 1, 1959--- FOR FURNISHING 277,920 METAL SPONGES IN THREE LOTS. IN RESPONSE TO THE INVITATION, YOU SUBMITTED THE LOW BID ON EACH LOT AND ALSO THE LOW AGGREGATE BID IN THE AMOUNT OF $48,110.40, OFFERING METAL SPONGES MANUFACTURED IN HOLLAND. THE SIX OTHER BIDS RECEIVED RANGED FROM AGGREGATE PRICES OF $64,667.52 TO $112,557.60. YOUR BID WAS REJECTED AS NONRESPONSIVE AND AWARDS WERE MADE TO AMERICAN COPPER SPONGE CO., INC., ON LOTS NOS. 1 AND 2 (CONTRACT NO. N155-47684) AND TO KURLY KATE CORPORATION ON LOT NO. 3 (CONTRACT NO. N155-57685) FOR AN AGGREGATE PRICE OF $63,555.69.

THE FOLLOWING CERTIFICATE WAS INCLUDED IN THE INVITATION:

"BUY AMERICAN CERTIFICATE

"THE BIDDER HEREBY CERTIFIES THAT EACH END PRODUCT, EXCEPT THE END PRODUCTS EXCLUDED BELOW, IS A DOMESTIC SOURCE END PRODUCT (AS DEFINED IN THE CONTRACT CLAUSE ENTITLED BUY AMERICAN ACT); AND THAT COMPONENTS OF UNKNOWN ORIGIN HAVE BEEN CONSIDERED TO HAVE BEEN MINED, PRODUCED, OR MANUFACTURED OUTSIDE THE UNITED STATES.'

THE REFERRED-TO CLAUSE ENTITLED BUY AMERICAN ACT PROVIDES IN PART:

"/B) THE CONTRACTOR AGREES THAT THERE WILL BE DELIVERED UNDER THIS CONTRACT ONLY DOMESTIC SOURCE END PRODUCTS, EXCEPT END PRODUCTS:

"/I) WHICH ARE FOR USE OUTSIDE THE UNITED STATES;

"/II) WHICH THE GOVERNMENT DETERMINES ARE NOT MINED, PRODUCED, OR MANUFACTURED IN THE UNITED STATES IN SUFFICIENT AND REASONABLY AVAILABLE COMMERCIAL QUANTITIES AND OF A SATISFACTORY QUALITY;

"/III) AS TO WHICH THE SECRETARY DETERMINES THE DOMESTIC PREFERENCE TO BE INCONSISTENT WITH THE PUBLIC INTEREST; OR

"/IV) AS TO WHICH THE SECRETARY DETERMINES THE COST TO THE GOVERNMENT TO BE UNREASONABLE.'

THE INVITATION INCLUDED ALSO THE FOLLOWING NOTICE OF SMALL BUSINESS SET- ASIDE:

"BIDS UNDER THIS PROCUREMENT ARE SOLICITED FROM SMALL BUSINESS CONCERNS ONLY AND THIS PROCUREMENT IS TO BE AWARDED ONLY TO ONE OR MORE SMALL BUSINESS CONCERNS. THIS ACTION IS BASED ON A DETERMINATION BY THE CONTRACTING OFFICER, IN CONJUNCTION WITH A REPRESENTATIVE OF THE SMALL BUSINESS ADMINISTRATION, THAT IT IS IN THE INTEREST OF MAINTAINING OR MOBILIZING THE NATION'S FULL PRODUCTIVE CAPACITY, IN THE INTEREST OF WAR OR NATIONAL DEFENSE PROGRAM OR IN THE INTEREST OF ASSURING THAT A FAIR PROPORTION OF GOVERNMENT PROCUREMENT IS PLACED WITH SMALL BUSINESS CONCERNS. A SMALL BUSINESS CONCERN IS A CONCERN THAT:

"/I) IS NOT DOMINANT IN ITS FIELD OF OPERATION AND, WITH ITS AFFILIATES, EMPLOYS FEWER THAN 500 EMPLOYEES, OR

"/II) IS CERTIFIED AS A SMALL BUSINESS CONCERN BY THE SMALL BUSINESS ADMINISTRATION.

"IN ADDITION TO MEETING THESE CRITERIA, A DEALER SUBMITTING BIDS IN ITS OWN NAME MUST BE A REGULAR DEALER (NON-MANUFACTURER) AND AGREE TO FURNISH THE PRODUCT OF A SMALL BUSINESS MANUFACTURER OR PRODUCER IN THE PERFORMANCE OF THE CONTRACT. THE RIGHT IS RESERVED TO REJECT ANY OR ALL BIDS WHEN IT IS IN THE INTEREST OF THE GOVERNMENT TO DO SO. BIDS RECEIVED FROM FIRMS WHICH ARE NOT SMALL BUSINESS CONCERNS SHALL BE CONSIDERED NONRESPONSIVE.

"THE AUTHORITY OF THE CONTRACTING OFFICER TO MAKE THIS TOTAL SET ASIDE IS 10 U.S.C. 2304 (A) (17) AND SECTION 15, OF THE SMALL BUSINESS ACT.'

SECTION 633 OF THE ACT OF OCTOBER 29, 1949, 63 STAT. 1024, 41 U.S.C. 10D, PROVIDES:

"IN ORDER TO CLARIFY THE ORIGINAL INTENT OF CONGRESS, HEREAFTER, SECTION 10A OF THIS TITLE AND THAT PART OF SECTION 10B (A) OF THIS TITLE PRECEDING THE WORDS "PROVIDED, HOWEVER," SHALL BE REGARDED AS REQUIRING THE PURCHASE, FOR PUBLIC USE WITHIN THE UNITED STATES, OF ARTICLES, MATERIALS, OR SUPPLIES MANUFACTURED IN THE UNITED STATES IN SUFFICIENT AND REASONABLY AVAILABLE COMMERCIAL QUANTITIES AND OF A SATISFACTORY QUALITY, UNLESS THE HEAD OF THE DEPARTMENT OR INDEPENDENT ESTABLISHMENT CONCERNED SHALL DETERMINE THEIR PURCHASE TO BE INCONSISTENT WITH THE PUBLIC INTEREST OR THEIR COST TO BE UNREASONABLE.'

IN PARAGRAPH 301.09 OF THE SMALL BUSINESS ADMINISTRATION PROCUREMENT AND TECHNICAL ASSISTANCE MANUAL IT IS STATED:

"FOREIGN SUPPLIERS OR FIRMS SUPPLYING FOREIGN PRODUCTS ARE NOT PERMITTED TO PARTICIPATE IN SMALL BUSINESS SET-ASIDES WHICH ARE DESIGNED TO MAINTAIN THE NATION'S FULL PRODUCTIVE CAPACITY. BIDS FROM SUCH FIRMS ON SET-ASIDE PROCUREMENTS ARE TO BE CONSIDERED AS NONRESPONSIVE.'

THE ADMINISTRATIVE OFFICE STATES THAT YOUR BID WAS REGARDED AS NONRESPONSIVE SINCE YOU OFFERED FOREIGN MANUFACTURED SPONGES ALTHOUGH THE INVITATION WAS BASED ON A TOTAL SMALL BUSINESS SET-ASIDE. IT IS STATED FURTHER THAT CONSIDERATION WAS GIVEN TO REJECTING ALL BIDS AND READVERTISING WITHOUT THE SET-ASIDE PROVISION BUT THAT SUCH ACTION WAS NOT TAKEN, CHIEFLY BECAUSE THE PRICES QUOTED BY THE SECOND LOW BIDDERS WERE CONSIDERED FAIR AND REASONABLE WHEN COMPARED WITH PREVIOUS PROCUREMENT PRICES AND READVERTISING WAS NOT DEEMED DESIRABLE SINCE BID PRICES HAD BEEN DISCLOSED.

IN VIEW OF THE ABOVE-QUOTED PROVISIONS OF THE INVITATION, THE ACT OF OCTOBER 29, 1949, AND PERTINENT REGULATIONS, THERE APPEARS NO PROPER BASIS FOR OBJECTION BY OUR OFFICE TO THE ACTION OF THE CONTRACTING OFFICER IN REJECTING YOUR BID AS NONRESPONSIVE AND MAKING THE AWARDS TO THE SECOND LOW BIDDERS.