B-144080, OCT. 26, 1960

B-144080: Oct 26, 1960

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INCORPORATED: REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 23. THAT SINCE YOUR PROPOSAL WAS THE LOWEST RESPONSIVE BID RECEIVED. AWARD SHOULD HAVE BEEN MADE TO YOU. THAT CANCELLATION OF THE INVITATION AND READVERTISEMENT OF THE PROCUREMENT WITH ONLY 50 PERCENT SET-ASIDE FOR SMALL BUSINESS IS CONTRARY TO THE ADMINISTRATIVE POLICY ESTABLISHED FOR THE PURPOSE OF AIDING SMALL CONCERNS. THE RECORD DISCLOSES THAT AT THE TIME THE INVITATION WAS ISSUED THE ONLY COMPANIES WHOSE PRODUCTS HAD BEEN PLACED ON THE QUALIFIED PRODUCTS LIST PREVIOUSLY HAD BEEN CLASSIFIED AS SMALL BUSINESS FIRMS. THEREFORE IT WAS STIPULATED THEREIN THAT AWARD WOULD BE MADE ONLY TO ONE OR MORE SMALL BUSINESS CONCERNS. ANOTHER COMPANY QUALIFIED ITS PRODUCT AFTER THE INVITATION WAS ISSUED.

B-144080, OCT. 26, 1960

TO AIRFAB, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 23, 1960, PROTESTING AGAINST THE ACTION TAKEN BY THE DEPARTMENT OF THE AIR FORCE IN CONNECTION WITH INVITATION FOR BIDS NO. 33-604-60-687, ISSUED BY THE DEPARTMENT OF THE AIR FORCE, GENTILE AIR FORCE STATION, FOR A QUANTITY OF PLASTIC INSTRUMENT KNOBS. YOU CONTEND, IN SUBSTANCE, THAT SINCE YOUR PROPOSAL WAS THE LOWEST RESPONSIVE BID RECEIVED, AWARD SHOULD HAVE BEEN MADE TO YOU, AND THAT CANCELLATION OF THE INVITATION AND READVERTISEMENT OF THE PROCUREMENT WITH ONLY 50 PERCENT SET-ASIDE FOR SMALL BUSINESS IS CONTRARY TO THE ADMINISTRATIVE POLICY ESTABLISHED FOR THE PURPOSE OF AIDING SMALL CONCERNS, AND MAY BE DETRIMENTAL TO THE BEST INTERESTS OF THE GOVERNMENT.

THE RECORD DISCLOSES THAT AT THE TIME THE INVITATION WAS ISSUED THE ONLY COMPANIES WHOSE PRODUCTS HAD BEEN PLACED ON THE QUALIFIED PRODUCTS LIST PREVIOUSLY HAD BEEN CLASSIFIED AS SMALL BUSINESS FIRMS, AND THEREFORE IT WAS STIPULATED THEREIN THAT AWARD WOULD BE MADE ONLY TO ONE OR MORE SMALL BUSINESS CONCERNS. HOWEVER, ANOTHER COMPANY QUALIFIED ITS PRODUCT AFTER THE INVITATION WAS ISSUED, AND AFTER OPENING OF THE BIDS IT WAS DETERMINED BY THE SMALL BUSINESS ADMINISTRATION THAT THIS COMPANY, J. FELSENTHAL AND SONS, WHICH WAS THE LOW BIDDER, COULD NOT QUALIFY AS SMALL BUSINESS BECAUSE OF ITS AFFILIATIONS. SINCE THE INVITATION WAS RESTRICTED TO SMALL BUSINESS, THE OFFER OF J. FELSENTHAL AND SONS COULD NOT BE ACCEPTED.

THEREAFTER, THE CONTRACTING OFFICER CONCLUDED THAT BECAUSE OF THE SUBSTANTIAL DIFFERENCE BETWEEN YOUR BID OF $1.31 EACH, AND THAT OF THE LOWEST OFFER OF $1.146, EQUAL TO APPROXIMATELY $10,000 FOR THE ADVERTISED QUANTITY, YOUR PROPOSAL WAS EXCESSIVE, AND THAT ACCEPTANCE THEREOF WOULD BE DETRIMENTAL TO THE PUBLIC INTEREST. ACCORDINGLY, UNDER AUTHORITY CONTAINED IN PARAGRAPH 1-706.3 (B) OF THE ARMED SERVICES PROCUREMENT REGULATIONS, THE 100 PERCENT SET-ASIDE WAS WITHDRAWN. A FURTHER BASIS FOR SUCH ACTION IS FOUND IN THE SAID REGULATIONS (PARAGRAPH 1-706.2 (B) (III) (, WHICH PROHIBIT TOTAL SET ASIDE WHERE, AS HERE, ONE OR MORE LARGE FIRMS HAVE HAD THEIR ITEMS PLACED ON THE QUALIFIED PRODUCTS LIST. THE DECISION OF THE CONTRACTING OFFICER TO CANCEL THE INVITATION AND READVERTISE HAS BEEN CONCURRED IN BY THE SMALL BUSINESS ADMINISTRATION, AND APPROVED BY THE DEPARTMENT OF THE AIR FORCE.

UNDER THE FACTS AND CIRCUMSTANCES OF THIS CASE THE CONCLUSION IS REQUIRED THAT CANCELLATION OF THE ORIGINAL INVITATION WAS A PROPER EXERCISE OF ADMINISTRATIVE AUTHORITY, AND THAT YOUR PROTEST AFFORDS NO BASIS UPON WHICH WE WOULD BE LEGALLY JUSTIFIED IN QUESTIONING THE ACTION TAKEN BY THE DEPARTMENT OF THE AIR FORCE.