B-145239, JUN. 26, 1961

B-145239: Jun 26, 1961

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TO DAYTON AVIATION RADIO AND EQUIPMENT CORPORATION: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MARCH 3. THE BASIS FOR THE PROTEST APPEARS TO BE THAT BRUNO NEW YORK INDUSTRIES CORPORATION WAS NOT A SMALL BUSINESS CONCERN EITHER ON SEPTEMBER 22. WHEN THE CITED INVITATION WAS ISSUED. THAT THAT CONCERN WAS NOT ENTITLED TO AN AWARD NOTWITHSTANDING A SUBSEQUENT DETERMINATION BY THE SMALL BUSINESS ADMINISTRATION UNDER DATE OF FEBRUARY 10. WHICH WAS PRIOR TO AWARD ON MARCH 17. THAT BRUNO-NEW YORK INDUSTRIES CORPORATION WAS SMALL BUSINESS. IT WAS STATED IN YOUR LETTER OF MARCH 3. THAT BIDS UNDER THE INDICATED INVITATION WERE TO BE SOLICITED ONLY FROM SMALL BUSINESS CONCERNS. ADVISING THAT A FINAL DETERMINATION HAD BEEN MADE THAT DAY THAT THE BRUNO-NEW YORK INDUSTRIES CORPORATION AND ALL OF ITS AFFILIATES WERE LARGE BUSINESS.

B-145239, JUN. 26, 1961

TO DAYTON AVIATION RADIO AND EQUIPMENT CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MARCH 3, 1961, PROTESTING THE AWARD OF A CONTRACT TO THE BRUNO-NEW YORK INDUSTRIES CORPORATION UNDER INVITATION FOR BIDS NO. 33-600-61-58, ISSUED BY THE AERONAUTICAL SYSTEMS CENTER, INSTRUMENT WRITING DIVISION, AIR MATERIEL COMMAND, WRIGHT- PATTERSON AIR FORCE BASE, OHIO, UNDER DATE OF SEPTEMBER 22, 1960. ALSO, THERE HAS BEEN RECEIVED YOUR LETTER DATED APRIL 3, 1961, TRANSMITTING A COPY OF YOUR LETTER DATED APRIL 1, 1961, TO THE SECRETARY OF THE AIR FORCE, RELATING TO THE MATTER OF YOUR PROTEST.

BRIEFLY STATED, THE BASIS FOR THE PROTEST APPEARS TO BE THAT BRUNO NEW YORK INDUSTRIES CORPORATION WAS NOT A SMALL BUSINESS CONCERN EITHER ON SEPTEMBER 22, 1960, WHEN THE CITED INVITATION WAS ISSUED, OR ON OCTOBER 17, 1960, THE BID OPENING DATE, AND, THEREFORE, THAT THAT CONCERN WAS NOT ENTITLED TO AN AWARD NOTWITHSTANDING A SUBSEQUENT DETERMINATION BY THE SMALL BUSINESS ADMINISTRATION UNDER DATE OF FEBRUARY 10, 1961, WHICH WAS PRIOR TO AWARD ON MARCH 17, 1961, THAT BRUNO-NEW YORK INDUSTRIES CORPORATION WAS SMALL BUSINESS.

IT WAS STATED IN YOUR LETTER OF MARCH 3, 1961, THAT BIDS UNDER THE INDICATED INVITATION WERE TO BE SOLICITED ONLY FROM SMALL BUSINESS CONCERNS. YOU THEN QUOTED FROM A LETTER DATED JANUARY 17, 1961, FROM THE SMALL BUSINESS AND CONTRACTOR RELATIONS OFFICE IN NEW YORK CITY TO THE DAYTON AIR PROCUREMENT DISTRICT, WRIGHT-PATTERSON AIR FORCE BASE, ADVISING THAT A FINAL DETERMINATION HAD BEEN MADE THAT DAY THAT THE BRUNO-NEW YORK INDUSTRIES CORPORATION AND ALL OF ITS AFFILIATES WERE LARGE BUSINESS. REFERENCE WAS ALSO MADE TO A LETTER DATED FEBRUARY 16, 1961, FROM THE ACTING DEPUTY ADMINISTRATOR, SMALL BUSINESS ADMINISTRATION, ADVISING YOU THAT A SMALL BUSINESS CERTIFICATE WAS ISSUED TO BRUNO-NEW YORK INDUSTRIES ON FEBRUARY 10, 1961, IT BEING STATED THEREIN THAT THE DETERMINATION WAS MADE UNDER THE PROVISIONS OF SECTION 121.3-8 (C) OF THE SMALL BUSINESS SIZE STANDARD REGULATION (REVISION 2), AS AMENDED.

ON PAGE FIVE OF YOUR LETTER YOU MADE REFERENCE TO TWO DECISIONS BY OUR OFFICE, NAMELY, DECISION DATED OCTOBER 22, 1958, B-137474, PUBLISHED AT 38 COMP. GEN. 328, INVOLVING A DETERMINATION BY THE SMALL BUSINESS ADMINISTRATION MADE RETROACTIVE TO A DATE PRIOR TO THE BID OPENING DATE, AND DECISION DATED OCTOBER 13, 1960, B-143630, WHICH, YOU STATED, EXPANDED THE PREVIOUSLY EXISTING RULE IN DETERMINING THAT THE ISSUANCE OF A SMALL BUSINESS CERTIFICATE AT ANY TIME PRIOR TO ACTUAL AWARD REINSTATES THE LEGAL CAPACITY OF A BIDDER TO RECEIVE AN AWARD WHICH IS RESTRICTED BY STATUTE TO A CERTAIN CLASS OF BIDDERS.

IN FURTHER SUPPORT OF YOUR PROTEST, YOU CONTENDED, AMONG OTHER THINGS, THAT THE BID OF BRUNO-NEW YORK INDUSTRIES WAS NONRESPONSIVE IN THAT IT WAS NOT A SMALL BUSINESS CONCERN ON OCTOBER 17, 1960, WITHIN THE MEANING AND INTENT OF APPLICABLE STATUTES AND REGULATIONS, AND YOU POINTED OUT THAT THE CERTIFICATE ISSUED BY THE SMALL BUSINESS ADMINISTRATION IN THIS CASE WAS NOT MADE RETROACTIVE. YOU INSISTED ALSO THAT OUR DECISION OF OCTOBER 13, 1960, IS NOT IN KEEPING WITH ORDERLY PROCUREMENT IN THAT IT PROVIDES FOR ESCAPE MECHANISMS TO LOW BIDDERS, AND THUS IS NOT IN KEEPING WITH THE OVERALL INTENT OF APPLICABLE STATUTES AND REGULATIONS.

THE PROCUREMENT IN THIS CASE WAS SET ASIDE FOR SMALL BUSINESS. SUBMITTING ITS BID IN THIS CASE BRUNO-NEW YORK INDUSTRIES CERTIFIED THAT IT WAS SMALL BUSINESS. IT APPEARS THAT YOUR COMPANY FILED A PROTEST AGAINST THE AWARD OF A CONTRACT TO BRUNO-NEW YORK INDUSTRIES AND, AS STATED IN YOUR LETTER OF MARCH 3, 1961, THE SMALL BUSINESS AND CONTRACTOR RELATIONS OFFICE IN NEW YORK CITY ADVISED THE DAYTON AIR PROCUREMENT DISTRICT, WRIGHT-PATTERSON AIR FORCE BASE, BY LETTER OF JANUARY 17, 1961, THAT BRUNO-NEW YORK INDUSTRIES AND ALL OF ITS AFFILIATES WERE LARGE BUSINESS. THE LATTER CONCERN REQUESTED THE SMALL BUSINESS ADMINISTRATION TO RECONSIDER ITS DETERMINATION AND UNDER DATE OF FEBRUARY 10, 1961, THE ACTING DEPUTY ADMINISTRATOR, SBA, ISSUED TO BRUNO-NEW YORK INDUSTRIES A SMALL BUSINESS CERTIFICATE FOR THE PURPOSE OF MAKING BIDS AND PROPOSALS FOR AIR-BORNE RADIO NAVIGATIONAL AIDS.

SECTION 8 (B) (6) OF THE SMALL BUSINESS ACT, AS AMENDED BY PUBLIC LAW 85- 536, 72 STAT. 390, AUTHORIZES THE SMALL BUSINESS ADMINISTRATION TO DETERMINE WHICH BUSINESS ENTERPRISES ARE TO BE DESIGNATED AS SMALL BUSINESS CONCERNS AND MAKES ITS DETERMINATIONS IN SUCH MATTERS CONCLUSIVE. SPECIFICALLY, THAT SECTION PROVIDES THAT "OFFICES OF THE GOVERNMENT HAVING PROCUREMENT OR LENDING POWERS, * * * SHALL ACCEPT AS CONCLUSIVE THE ADMINISTRATION'S DETERMINATION AS TO WHICH ENTERPRISES ARE TO BE DESIGNATED "SMALL BUSINESS CONCERNS.' * * *"

THE AWARD OF THE CONTRACT TO BRUNO-NEW YORK INDUSTRIES FOLLOWED THE DETERMINATION BY THE SMALL BUSINESS ADMINISTRATION THAT THE COMPANY WAS SMALL BUSINESS AND IN VIEW OF THE CONCLUSIVENESS OF SUCH DETERMINATION WE FEEL THAT THE DEPARTMENT OF THE AIR FORCE WAS JUSTIFIED IN MAKING THE AWARD TO THAT CONCERN AS A QUALIFIED, RESPONSIVE BIDDER. WE FIND NOTHING IN EITHER OUR DECISION OF OCTOBER 22, 1958, B-137474, OR IN OUR DECISION OF OCTOBER 13, 1960, B-143630, THAT CONFLICTS WITH THE VIEW JUST EXPRESSED.

OUR OFFICE RECENTLY HAD THE OCCASION TO CONSIDER THE QUESTION AS TO THE PROPRIETY OF AWARDS TO BE MADE UNDER AN INVITATION FOR BIDS ISSUED BY THE FEDERAL SUPPLY SERVICE, GENERAL SERVICES ADMINISTRATION, IN WHICH THERE WAS A 100 PERCENT SMALL BUSINESS SET ASIDE. WHEN THE BIDS WERE OPENED IT WAS FOUND THAT ONE OF THE BIDDERS, BY PLACING AN "X" IN THE BOX PROVIDED THEREFOR, REPRESENTED THAT IT WAS NOT A SMALL BUSINESS CONCERN. AT A LATER DATE THE SMALL BUSINESS ADMINISTRATION ADVISED THAT THE FIRM WAS "SMALL BUSINESS.'

IN SUBMITTING THE MATTER TO OUR OFFICE FOR A DECISION, THE DEPUTY ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, STATED THAT A SERIOUS QUESTION WAS INVOLVED WITH RESPECT TO THE PROPRIETY OF MAKING AN AWARD TO THE PROTESTING BIDDER BECAUSE WHEN THE BIDS WERE OPENED THAT BIDDER WAS NOT SMALL BUSINESS. IT WAS POINTED OUT BY THE DEPUTY ADMINISTRATOR THAT SUBSEQUENT TO THE BID OPENING DATE THE SMALL BUSINESS ADMINISTRATION PUBLISHED AN AMENDMENT TO ITS SMALL BUSINESS "SIZE STANDARDS" TO PROVIDE THAT IN DETERMINING THE SMALL BUSINESS STATUS OF A CONCERN, THE SIZE STANDARDS SHOULD BE INCREASED BY 25 PERCENT WHENEVER THE CONCERN QUALIFIED AS A SUBSTANTIAL SURPLUS LABOR AREA CONCERN. IT WAS FOLLOWING THE AMENDMENT THAT CHROMCRAFT WAS DETERMINED TO BE ,SMALL BUSINESS.'

IN A DECISION DATED MARCH 29, 1961, B-145236, OUR OFFICE GAVE CONSIDERATION TO THE MATTER, PARTICULARLY IN THE LIGHT OF OUR DECISION OF OCTOBER 13, 1960, AND IT WAS STATED AS FOLLOWS:

"WE FEEL THAT THE RULE SET FORTH IN OUR DECISION OF OCTOBER 13, 1960, IS PROPERLY APPLICABLE TO THE FACTUAL SITUATION PRESENT IN THAT DECISION; THAT IS, WHERE A BIDDER REPRESENTS IN GOOD FAITH THAT HE IS SMALL BUSINESS HE IS ENTITLED TO HAVE HIS BID CONSIDERED TO AWARD SUBJECT TO A CHALLENGE OF HIS SIZE STATUS BY ANOTHER BIDDER OR THE CONTRACTING OFFICER (SEE 13 CFR 121.3-8 (D); 13 CFR 121.3-5 BELOW). IF, AFTER BID OPENING, THE LOW BIDDER WHO HAS REPRESENTED HIMSELF, OR HIS CONCERN, AS A SMALL BUSINESS IS CHALLENGED ON THAT POINT AND IT IS LATER DETERMINED THAT HE IS, IN FACT, SMALL BUSINESS SUCH LOW BIDDER WOULD BE ELIGIBLE FOR AWARD--- THE DATE OF AWARD WOULD BE THE CONTROLLING POINT IN TIME BY WHICH HIS ELIGIBILITY FOR AWARD IS TO BE DETERMINED. HOWEVER, BECAUSE OF THE CONSIDERATIONS TO BE DISCUSSED BELOW, WE FEEL THAT THE HOLDING IN OUR DECISION OF OCTOBER 13, 1960, IS NOT APPLICABLE TO A SITUATION, SUCH AS WE HAVE HERE, WHERE A BIDDER DOES NOT, AND CANNOT, IN GOOD FAITH REPRESENT HIMSELF AS SMALL BUSINESS PRIOR TO, OR AT THE TIME OF, BID OPENING.'

IN THE PRESENT CASE, WE HAVE NO REASON TO QUESTION THE GOOD FAITH OF BRUNO-NEW YORK'S SELF-CERTIFICATION AS SMALL BUSINESS. SECTION 121.3-8 (A) (5), TITLE 13, OF THE CODE OF FEDERAL REGULATIONS PROVIDES THAT A BUSINESS CONCERN SHALL BE CONSIDERED SMALL BUSINESS FOR THE PURPOSE OF GOVERNMENT PROCUREMENT OF VARIOUS ITEMS OF AIRCRAFT EQUIPMENT, INCLUDING FLIGHT INSTRUMENTS, IF ITS NUMBER OF EMPLOYEES DOES NOT EXCEED 1,000 PERSONS. WHILE WE UNDERSTAND IT TO BE THE POSITION OF THE AIR FORCE THAT AIR-BORNE RADIO NAVIGATION AIDS ARE NOT FLIGHT INSTRUMENTS, WE BELIEVE BRUNO-NEW YORK WELL MIGHT HAVE THOUGHT OTHERWISE AT THE TIME OF ITS SELF- CERTIFICATION. THE PRESENT CASE IS, THEREFORE, DISTINGUISHABLE FROM THE CHROMCRAFT CASE.