B-147682, DECEMBER 21, 1961, 41 COMP. GEN. 417

B-147682: Dec 21, 1961

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WHICH SPECIFY THAT ONLY THOSE BIDDERS WHO SUBMIT RESPONSIVE BIDS FOR THE NON-SET-ASIDE PORTION WILL BE CONSIDERED FOR AWARD FOR THE SET-ASIDE PORTION. EVEN THOUGH THE SET-ASIDE PORTION IS A NEGOTIATED PROCUREMENT NOT SUBJECT TO THE STRICT RULES GOVERNING PROCUREMENT BY FORMAL ADVERTISING. 1961: WE HAVE A LETTER OF NOVEMBER 28. ENG-11-184-62-CD-30 WAS ISSUED JULY 25. WOULD HAVE BEEN ELIGIBLE FOR FIRST CONSIDERATION IN THE NEGOTIATION OF THE SET-ASIDE BUT FOR THE FIRM'S FAILURE TO MAKE THE REQUIRED ACKNOWLEDGMENT OF THE RECEIPT OF AN AMENDMENT TO THE INVITATION WHICH MADE THE SPECIFICATIONS MORE STRINGENT. THAT THE AMENDMENT WAS NEVER RECEIVED AND HAS OFFERED TO COMPLY WITH THE TERMS OF THE AMENDMENT WITHOUT CHANGE IN PRICE.

B-147682, DECEMBER 21, 1961, 41 COMP. GEN. 417

BIDDERS - RIGHT TO AWARD - PARTIAL SET-ASIDES - RESPONSIVENESS TO ADVERTISED PORTION THE REQUIREMENTS IN AN INVITATION FOR THE NON-SET-ASIDE PORTION OF A PROCUREMENT, WHICH SPECIFY THAT ONLY THOSE BIDDERS WHO SUBMIT RESPONSIVE BIDS FOR THE NON-SET-ASIDE PORTION WILL BE CONSIDERED FOR AWARD FOR THE SET-ASIDE PORTION, MUST BE FOLLOWED IN THE DETERMINATION OF ELIGIBILITY OF BIDDERS FOR AWARD OF THE SET-ASIDE PORTION, EVEN THOUGH THE SET-ASIDE PORTION IS A NEGOTIATED PROCUREMENT NOT SUBJECT TO THE STRICT RULES GOVERNING PROCUREMENT BY FORMAL ADVERTISING; THEREFORE, A LABOR SURPLUS AREA BIDDER WHO FAILED TO ACKNOWLEDGE A MATERIAL AMENDMENT THEREBY MAKING HIS BID NONRESPONSIVE TO THE ADVERTISED NON-SET-ASIDE PORTION MAY NOT BE REGARDED AS AN ELIGIBLE BIDDER FOR CONSIDERATION OF THE SET-ASIDE PORTION OF THE PROCUREMENT.

TO THE SECRETARY OF THE ARMY, DECEMBER 21, 1961:

WE HAVE A LETTER OF NOVEMBER 28, 1961, WITH ENCLOSURES, SIGNED BY THE CHIEF, CONTRACTS DIVISION, OFFICE OF THE DEPUTY CHIEF OF STAFF FOR LOGISTICS, REQUESTING AN ADVANCE DECISION WITH RESPECT TO THE PROPRIETY OF NEGOTIATIONS ON A LABOR SURPLUS SET-ASIDE.

INVITATION FOR BIDS NO. ENG-11-184-62-CD-30 WAS ISSUED JULY 25, 1961, BY THE ARMY ENGINEER PROCUREMENT OFFICE, CHICAGO, FOR THE PROCUREMENT OF 1,000 INFLATABLE BOATS; A CONTRACT FOR 500 TO BE AWARDED TO THE LOW RESPONSIVE AND RESPONSIBLE BIDDER, AND THE REMAINDER TO BE NEGOTIATED UNDER A LABOR SURPLUS AREA SET-ASIDE.

RUBBER FABRICATORS, INC., A SMALL BUSINESS LOCATED IN A FIRST PRIORITY LABOR SURPLUS AREA, WOULD HAVE BEEN ELIGIBLE FOR FIRST CONSIDERATION IN THE NEGOTIATION OF THE SET-ASIDE BUT FOR THE FIRM'S FAILURE TO MAKE THE REQUIRED ACKNOWLEDGMENT OF THE RECEIPT OF AN AMENDMENT TO THE INVITATION WHICH MADE THE SPECIFICATIONS MORE STRINGENT. THE BIDDER HAS CONTENDED AFTER BID OPENING, IN A TELEGRAM OF OCTOBER 31, 1961, THAT THE AMENDMENT WAS NEVER RECEIVED AND HAS OFFERED TO COMPLY WITH THE TERMS OF THE AMENDMENT WITHOUT CHANGE IN PRICE.

THE FAILURE IN SUCH CIRCUMSTANCES TO PROPERLY ACKNOWLEDGE THE RECEIPT OF AN AMENDMENT MAKING MATERIAL CHANGES IN THE SPECIFICATIONS CLEARLY PRECLUDES AWARD ON AN ADVERTISED PROCUREMENT REGARDLESS OF THE REASONS FOR THE FAILURE. 40 COMP. GEN. 126; B-128645, SEPTEMBER 28, 1956. THE QUESTION PRESENTED IS WHETHER SUCH FAILURE ALSO PRECLUDES AN OTHERWISE ELIGIBLE FIRM FROM PARTICIPATING IN NEGOTIATIONS FOR A LABOR SURPLUS SET- ASIDE IN VIEW OF THE FOLLOWING PROVISIONS OF THE INVITATION:

* * * NEGOTIATIONS FOR AWARD OF THE SET-ASIDE PORTION WILL BE CONDUCTED ONLY WITH RESPONSIBLE LABOR SURPLUS AREA CONCERNS (AND SMALL BUSINESS CONCERNS TO THE EXTENT INDICATED BELOW) WHO HAVE SUBMITTED RESPONSIVE BIDS OR PROPOSALS ON THE NON-SET-ASIDE PORTION AT A UNIT PRICE WITHIN 120 PERCENT OF THE HIGHEST AWARD MADE ON THE NON-SET ASIDE PORTION. * * *

THE OBVIOUS PURPOSE OF THE QUOTED REQUIREMENT IS TO LIMIT PARTICIPATION IN THE SET-ASIDE TO THOSE FIRMS WHO SERIOUSLY ENTERED INTO THE COMPETITION FOR AWARD ON THE NON-SET-ASIDE PORTION. THUS, ELIGIBILITY IS DEPENDENT NOT ONLY ON RESPONSIVENESS TO THE TERMS OF THE ADVERTISEMENT BUT ALSO ON THE SUBMISSION OF A BID WITHIN 120 PERCENT OF THE HIGHEST AWARD ON THE NON -SET-ASIDE. IF NONRESPONSIVE BIDDERS ARE TO BE CONSIDERED FOR AWARD ON THE SET-ASIDE THE PURPOSE OF THE ENTIRE REQUIREMENT IS NULLIFIED. A HARD FACTUAL SITUATION IS PRESENTED HERE BECAUSE OF THE ALLEGED NONRECEIPT OF THE AMENDMENT TO THE INVITATION, BUT SINCE THE BID WAS CLEARLY NOT RESPONSIVE TO THE ADVERTISEMENT FOR FAILURE TO ACKNOWLEDGE THE MATERIAL AMENDMENT AS REQUIRED--- FOR WHATEVER REASON--- WE FIND NO BASIS TO JUSTIFY THE ESTABLISHMENT OF A DIFFERENT STANDARD.

THE SET-ASIDE PORTION IS, OF COURSE, A NEGOTIATED PROCUREMENT AND, THEREFORE, IS NOT SUBJECT TO THE STRICT RULES GOVERNING PROCUREMENT BY FORMAL ADVERTISING. NEVERTHELESS, IT IS OUR POSITION THAT REQUIREMENTS FOR AND LIMITATIONS ON ELIGIBILITY FOR AWARD UNDER THE SET-ASIDE WHICH ARE STATED IN AN INVITATION SHOULD BE FOLLOWED IN THE AWARD OF THE SET ASIDE PORTION. SEE 41 COMP. GEN. 160; 39 ID. 17. AS NOTED ABOVE, THERE IS A LEGITIMATE PURPOSE FOR THE REQUIREMENT UNDER CONSIDERATION. THEREFORE, WE CONCLUDE THAT ON THE BASIS OF THE FACTS PRESENTED RUBBER FABRICATORS, INC., MAY NOT BE REGARDED AS ELIGIBLE FOR PARTICIPATION IN THE SET-ASIDE PORTION OF THE PROCUREMENT INCLUDED IN THE CITED INVITATION FOR BIDS.