B-146339, AUG. 4, 1961

B-146339: Aug 4, 1961

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TO THE PALTIER CORPORATION: FURTHER REFERENCE IS MADE TO YOUR LETTERS OF JULY 6. THE AWARD UNDER THE INVITATION IS RESTRICTED TO SMALL BUSINESS CONCERNS AND THE PRIMARY QUESTION INVOLVED IS WHETHER THE UNION ASBESTOS AND RUBBER COMPANY IS SMALL BUSINESS. SUCH DETERMINATIONS ARE MADE BY THE SMALL BUSINESS ADMINISTRATION AND ITS DETERMINATIONS ARE BINDING UPON THE PROCURING AGENCY. 15 U.S.C. 637 (B) (6). WE HAVE BEEN ADVISED BY THE POST OFFICE DEPARTMENT THAT THE SMALL BUSINESS ADMINISTRATION HAS RULED THAT THE UNION ASBESTOS AND RUBBER COMPANY IS NOT SMALL BUSINESS BUT THAT THE COMPANY HAS APPEALED THE RULING. WE HAVE ALSO BEEN ADVISED THAT PENDING THE OUTCOME OF APPEAL AN AWARD UNDER THE INVITATION WILL BE WITHHELD.

B-146339, AUG. 4, 1961

TO THE PALTIER CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF JULY 6, 1961, PROTESTING CONCERNING THE AWARD OF THE CONTRACT UNDER INVITATION FOR BIDS NO. 2732 ISSUED BY THE POST OFFICE DEPARTMENT.

THE AWARD UNDER THE INVITATION IS RESTRICTED TO SMALL BUSINESS CONCERNS AND THE PRIMARY QUESTION INVOLVED IS WHETHER THE UNION ASBESTOS AND RUBBER COMPANY IS SMALL BUSINESS. SUCH DETERMINATIONS ARE MADE BY THE SMALL BUSINESS ADMINISTRATION AND ITS DETERMINATIONS ARE BINDING UPON THE PROCURING AGENCY. 15 U.S.C. 637 (B) (6). WE HAVE BEEN ADVISED BY THE POST OFFICE DEPARTMENT THAT THE SMALL BUSINESS ADMINISTRATION HAS RULED THAT THE UNION ASBESTOS AND RUBBER COMPANY IS NOT SMALL BUSINESS BUT THAT THE COMPANY HAS APPEALED THE RULING. WE HAVE ALSO BEEN ADVISED THAT PENDING THE OUTCOME OF APPEAL AN AWARD UNDER THE INVITATION WILL BE WITHHELD.

WITH RESPECT TO YOUR ALLEGATION THAT THE UNION ASBESTOS AND RUBBER COMPANY MAY INFRINGE YOUR PATENT IF AWARDED THE CONTRACT, IT HAS BEEN HELD THAT A LOW BID SUBMITTED IN RESPONSE TO AN INVITATION WHICH CONTAINS A PATENT INDEMNITY CLAUSE RELIEVING THE GOVERNMENT OF LIABILITY FOR INFRINGEMENT OF ANY PATENT IN CONNECTION WITH THE CONTRACT MAY NOT BE DISREGARDED MERELY BECAUSE THE PATENT OWNER, WHO WAS THE SECOND LOW BIDDER, ALLEGES THAT HIS PATENT WILL BE INFRINGED AND THAT THE LOW BIDDER IS WITHOUT ANY LEGAL RIGHT TO MANUFACTURE THE ITEM COVERED BY THE INVITATION. B-139597, JULY 2, 1959, 39 COMP. GEN. 6, COPY HEREWITH.