B-145014, MAY 8, 1961

B-145014: May 8, 1961

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YOU HAVE PROTESTED THE WITHDRAWAL OF A SMALL BUSINESS SET-ASIDE UNDER INVITATION FOR BIDS NO. 600-468-61'S ISSUED DECEMBER 22. THE INVITATION WAS ORIGINALLY ISSUED AS A TOTAL SET-ASIDE FOR DOMESTIC SMALL BUSINESS CONCERNS AS A RESULT OF A JOINT DETERMINATION BY THE BUREAU OF SHIPS AND THE SMALL BUSINESS ADMINISTRATION. WE ARE ADVISED. THE CITED REGULATION PROVIDES: "PROCUREMENTS INVOLVING SUPPLIES OF MUTUAL INTEREST TO THE UNITED STATES AND CANADA WHICH HAVE BEEN DEVELOPED AND FINANCED BY THE GOVERNMENT OF CANADA SHALL NOT BE SET ASIDE FOR SMALL SINESS.'. WE ARE ADVISED. THAT IN VIEW OF THE FOREGOING AND SINCE THE EQUIPMENT CONCERNED IS REGARDED AS AN ITEM OF MUTUAL INTEREST BETWEEN THE UNITED STATES AND CANADA.

B-145014, MAY 8, 1961

TO UNIVERSAL MOULDED FIBER GLASS CORPORATION:

BY TELEGRAM OF FEBRUARY 9, 1961, AND SUBSEQUENT CORRESPONDENCE, YOU HAVE PROTESTED THE WITHDRAWAL OF A SMALL BUSINESS SET-ASIDE UNDER INVITATION FOR BIDS NO. 600-468-61'S ISSUED DECEMBER 22, 1960, BY THE U.S. NAVY PURCHASING OFFICE FOR THE PROCUREMENT OF EIGHT CW-396A/GPS RADOMES WITH RELATED SUPPLIES AND EQUIPMENT.

THE INVITATION WAS ORIGINALLY ISSUED AS A TOTAL SET-ASIDE FOR DOMESTIC SMALL BUSINESS CONCERNS AS A RESULT OF A JOINT DETERMINATION BY THE BUREAU OF SHIPS AND THE SMALL BUSINESS ADMINISTRATION. WE ARE ADVISED, HOWEVER, THAT PRIOR TO BID OPENING, THE CANADIAN DEPARTMENT OF DEFENSE NOTIFIED THE PURCHASING AGENCY THAT THE CANADIAN GOVERNMENT HAD CONTRIBUTED THE SUM OF $135,000 TO THE DEVELOPMENT OF THE SPECIFIC TYPE OF RADOME AND, PURSUANT TO ASPR 1-706.1 (B), REQUESTED AN OPPORTUNITY TO BID ON THE PROCUREMENT. THE CITED REGULATION PROVIDES:

"PROCUREMENTS INVOLVING SUPPLIES OF MUTUAL INTEREST TO THE UNITED STATES AND CANADA WHICH HAVE BEEN DEVELOPED AND FINANCED BY THE GOVERNMENT OF CANADA SHALL NOT BE SET ASIDE FOR SMALL SINESS.'

WE ARE ADVISED, FURTHER, THAT IN VIEW OF THE FOREGOING AND SINCE THE EQUIPMENT CONCERNED IS REGARDED AS AN ITEM OF MUTUAL INTEREST BETWEEN THE UNITED STATES AND CANADA, THE CONTRACTING OFFICER AND THE REPRESENTATIVE OF THE SMALL BUSINESS ADMINISTRATION, ON JANUARY 10, 1961, WITHDREW THE JOINT SET-ASIDE DETERMINATION. ON JANUARY 12, 1961, AN AMENDMENT WAS ISSUED DELETING THE SMALL BUSINESS SET-ASIDE PROVISION FROM THE INVITATION. UPON OPENING IT WAS FOUND THAT THE LOW BID, IN THE AMOUNT OF $142,642, HAD BEEN SUBMITTED BY THE CANADIAN COMMERCIAL CORPORATION. YOUR BID PRICE WAS $149,000. CONTRACT NOBSR 85300 FOR THE PROCUREMENT WAS AWARDED TO THE CANADIAN FIRM ON MARCH 7, 1961.

YOU HAVE PROTESTED THE WITHDRAWAL OF THE SET-ASIDE ON THE BASIS THAT THE SPECIFIC TYPE OF RADOME IN QUESTION WAS DEVELOPED ENTIRELY BY YOUR FIRM AND OTHER UNITED STATES COMPANIES USING FUNDS OF THEIR OWN OR OF THE DEPARTMENT OF THE AIR FORCE. ACCORDINGLY, YOU ALLEGE THAT THE QUOTED REGULATION PROVIDES NO BASIS FOR WITHDRAWAL OF THE SET-ASIDE.

WE ARE ADVISED THAT UPON RECEIPT OF YOUR PROTEST, THE PROCURING ACTIVITY OBTAINED FURTHER INFORMATION FROM THE CANADIAN GOVERNMENT INDICATING THAT IN FACT THE CANADIAN GOVERNMENT HAD EXPENDED FUNDS FOR THE DEVELOPMENT OF THE TYPE OF RADOME COVERED BY THE PROCUREMENT.

THE STATUTORY AUTHORITY FOR THE SET-ASIDE OF PROCUREMENTS FOR SMALL BUSINESS IS FOUND IN SECTION 15 OF THE SMALL BUSINESS ACT, AS AMENDED, 15 U.S.C. 644, WHICH PROVIDES IN PERTINENT PART:

"TO EFFECTUATE THE PURPOSES OF THIS ACT, SMALL-BUSINESS CONCERNS WITHIN THE MEANING OF THIS ACT SHALL RECEIVE ANY AWARD OR CONTRACT FOR THE SALE OF GOVERNMENT PROPERTY, AS TO WHICH IT IS DETERMINED BY THE (SMALL BUSINESS) ADMINISTRATION AND THE CONTRACTING PROCUREMENT * * * AGENCY (1) TO BE IN THE INTEREST OF MAINTAINING OR MOBILIZING THE NATION'S FULL PRODUCTIVE CAPACITY, (2) TO BE IN THE INTEREST OF WAR OR NATIONAL DEFENSE PROGRAMS, (3) TO BE IN THE INTEREST OF ASSURING THAT A FAIR PROPORTION OF THE TOTAL PURCHASES AND CONTRACTS FOR PROPERTY AND SERVICES FOR THE GOVERNMENT ARE PLACED WITH SMALL-BUSINESS CONCERNS, OR (4) TO BE IN THE INTEREST OF ASSURING THAT A FAIR PROPORTION OF THE TOTAL SALES OF GOVERNMENT PROPERTY BE MADE TO SMALL BUSINESS CONCERNS; * * *.'

IT WILL BE NOTED THAT THE SET-ASIDE OF A PROCUREMENT FOR SMALL BUSINESS REQUIRES A DETERMINATION BY THE SMALL BUSINESS ADMINISTRATION AND THE PROCUREMENT AGENCY (THE STATUTE ALSO INCLUDES PROVISIONS FOR SITUATIONS, UNLIKE THAT HERE UNDER CONSIDERATION, WHERE THERE IS DISAGREEMENT BETWEEN THE TWO AGENCIES). SET-ASIDES MAY BE WITHDRAWN PRIOR TO AWARD PURSUANT TO ASPR 1-706.3 (B), SUBJECT TO AN APPEAL PROCEDURE ON A JOINT SET-ASIDE IF THE SBA REPRESENTATIVE DISAGREES, UPON A DETERMINATION BY THE CONTRACTING OFFICER THAT PROCUREMENT UNDER THE SET-ASIDE WOULD BE DETRIMENTAL TO THE PUBLIC INTEREST. THE DEPARTMENT OF DEFENSE HAS IN EFFECT ESTABLISHED IN ADVANCE BY THE PROMULGATION OF ASPR 1-706.1 (B) THAT THE PROCUREMENT OF SUPPLIES OF MUTUAL INTEREST TO THE UNITED STATES AND CANADA WHICH HAVE BEEN DEVELOPED AND FINANCED BY THE LATTER GOVERNMENT SHOULD NOT, IN THE PUBLIC INTEREST, BE LIMITED TO DOMESTIC SMALL BUSINESS CONCERNS.

AS PREVIOUSLY STATED, THE QUESTION FOR RESOLUTION IS WHETHER THE PROCUREMENT COMES WITHIN THE PROVISIONS OF ASPR 1-706.1 (B). THE CONTRACTING OFFICER AND THE SBA REPRESENTATIVE HAVE BOTH AGREED UPON A CONSIDERATION OF THE FACTS THAT IT DOES. THE FOLLOWING STATEMENT WHICH APPEARS IN B-143873, NOVEMBER 28, 1960, IS ALSO APPLICABLE HERE:

"UNDER THE PERTINENT STATUTORY PROVISIONS AND REGULATIONS ISSUED PURSUANT THERETO, THE DETERMINATION TO SET ASIDE THE AWARD FOR SMALL BUSINESS, OR TO WITHDRAW THE SET-ASIDE, IS PLACED WITHIN THE AMBIT OF SOUND ADMINISTRATIVE DISCRETION. THE AUTHORITY IS VERY BROAD AND AN ADMINISTRATIVE DETERMINATION MADE PURSUANT TO SUCH AUTHORITY IS NOT ORDINARILY SUBJECT TO REVIEW. * * *"

CONSIDERING THE BROAD SCOPE OF ADMINISTRATIVE DISCRETION INVESTED BY THE ACT AND REGULATIONS IN THE REPRESENTATIVES OF THE CONTRACTING AGENCY AND THE SBA, WE MUST CONCLUDE THAT THERE HAS BEEN PRESENTED NO BASIS WHICH WOULD JUSTIFY A CONCLUSION ON OUR PART THAT THE AWARD MADE IS ILLEGAL. SEE 37 COMP. GEN. 147.