B-147857, FEB. 26, 1962

B-147857: Feb 26, 1962

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TO POSTELL FLUID POWER COMPANY: REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 4. INDICATES THAT BIDDERS WERE REQUIRED TO INDICATE ON THEIR BIDS THAT THEY WERE EITHER A MANUFACTURER OF. THIS REQUIREMENT WAS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 1 OF THE WALSH-HEALY ACT. OR BY ANY CORPORATION ALL THE STOCK OF WHICH IS BENEFICIALLY OWNED BY THE UNITED STATES (ALL THE FOREGOING BEING HEREINAFTER DESIGNATED AS AGENCIES OF THE UNITED STATES). THERE SHALL BE INCLUDED THE FOLLOWING REPRESENTATIONS AND STIPULATIONS: (A) THAT THE CONTRACTOR IS THE MANUFACTURER OF OR A REGULAR DEALER IN THE MATERIALS. A PREAWARD SURVEY REVEALED THAT YOUR COMPANY DID NOT HAVE THE PRODUCTION ABILITY TO MANUFACTURE THE PUMPS AND THAT YOU INTENDED TO SUBCONTRACT FOR THEIR COMPLETE MANUFACTURE.

B-147857, FEB. 26, 1962

TO POSTELL FLUID POWER COMPANY:

REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 4, 1962, AND SUBSEQUENT CORRESPONDENCE, PROTESTING AGAINST THE ACTION OF THE DEPARTMENT OF THE ARMY IN REJECTING YOUR LOW BID FOR FURNISHING CENTRIFUGAL HYDRAULIC RAMP PUMPS UNDER INVITATION FOR BIDS NO. ORD-20 113-61-1280.

THE REPORT OF THE DEPARTMENT OF THE ARMY ON YOUR PROTEST, WHICH HAS NOW BEEN RECEIVED IN THE OFFICE, INDICATES THAT BIDDERS WERE REQUIRED TO INDICATE ON THEIR BIDS THAT THEY WERE EITHER A MANUFACTURER OF, OR REGULAR DEALER IN, THE ITEMS BID UPON. THIS REQUIREMENT WAS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 1 OF THE WALSH-HEALY ACT, 41 U.S.C. 35, WHICH PROVIDES IN PERTINENT PART AS FOLLOWS:

"IN ANY CONTRACT MADE AND ENTERED INTO BY ANY EXECUTIVE DEPARTMENT, INDEPENDENT ESTABLISHMENT, OR OTHER AGENCY OR INSTRUMENTALITY OF THE UNITED STATES, OR BY THE DISTRICT OF COLUMBIA, OR BY ANY CORPORATION ALL THE STOCK OF WHICH IS BENEFICIALLY OWNED BY THE UNITED STATES (ALL THE FOREGOING BEING HEREINAFTER DESIGNATED AS AGENCIES OF THE UNITED STATES), FOR THE MANUFACTURER OR FURNISHING OF MATERIALS, SUPPLIES, ARTICLES, AND EQUIPMENT IN ANY AMOUNT EXCEEDING $10,000, THERE SHALL BE INCLUDED THE FOLLOWING REPRESENTATIONS AND STIPULATIONS:

(A) THAT THE CONTRACTOR IS THE MANUFACTURER OF OR A REGULAR DEALER IN THE MATERIALS, SUPPLIES, ARTICLES, OR EQUIPMENT TO BE MANUFACTURED OR USED IN THE PERFORMANCE OF THE CONTRACT; * * *.'

YOUR COMPANY'S BID REPRESENTED IT TO BE A MANUFACTURER OF THE PUMPS BID UPON. HOWEVER, A PREAWARD SURVEY REVEALED THAT YOUR COMPANY DID NOT HAVE THE PRODUCTION ABILITY TO MANUFACTURE THE PUMPS AND THAT YOU INTENDED TO SUBCONTRACT FOR THEIR COMPLETE MANUFACTURE. FURTHER IT WAS DETERMINED THAT YOUR COMPANY DID NOT STOCK OR SELL THE ITEMS IN QUESTION SO AS TO QUALIFY AS A REGULAR DEALER IN SUCH ITEMS. IN VIEW THEREOF, THE CONTRACTING OFFICER DETERMINED, PURSUANT TO THE PROVISIONS OF PARAGRAPH 1- 201.18 OF THE ARMED SERVICES PROCUREMENT REGULATION, WHICH IMPLEMENT 41 U.S.C. 35, THAT YOUR COMPANY DID NOT QUALIFY AS A SOURCE OF SUPPLY UNDER THE STATUTE FOR THE ITEMS IN QUESTION.

41 U.S.C. 38 PROVIDES THAT THE SECRETARY OF LABOR SHALL HAVE AUTHORITY TO ADMINISTER THE PROVISIONS OF THE WALSH-HEALY ACT, AND TO MAKE SUCH RULES AND REGULATIONS AS MAY BE NECESSARY TO THAT END. PURSUANT TO THIS STATUTORY AUTHORITY, THE SECRETARY OF LABOR HAS ISSUED REGULATIONS, WHICH MAY BE FOUND IN TITLE 41, CHAPTER 50, PART 201.101 OF THE CODE OF FEDERAL REGULATIONS, AND WHICH PROVIDE IN PERTINENT PART AS FOLLOWS:

"A BIDDER OR CONTRACTOR SHALL BE DEEMED TO BE A "MANUFACTURER" OR "REGULAR DEALER" WITHIN THE MEANING OF THE STIPULATION REQUIRED BY SECTION 1 (A) OF THE ACT AND SEC. 50-201.1 (A) IF HE FALLS WITHIN ONE OF THE FOLLOWING CATEGORIES:

"/A) A MANUFACTURER IS A PERSON WHO OWNS, OPERATES, OR MAINTAINS A FACTORY OR ESTABLISHMENT THAT PRODUCES ON THE PREMISES THE MATERIALS, SUPPLIES, ARTICLES, OR EQUIPMENT REQUIRED UNDER THE CONTRACT AND OF THE GENERAL CHARACTER DESCRIBED BY THE SPECIFICATIONS.

"/B) A REGULAR DEALER IS A PERSON WHO OWNS, OPERATES, OR MAINTAINS A STORE, WAREHOUSE, OR OTHER ESTABLISHMENT IN WHICH THE MATERIALS, SUPPLIES, ARTICLES, OR EQUIPMENT OF THE GENERAL CHARACTER DESCRIBED BY THE SPECIFICATIONS AND REQUIRED UNDER THE CONTRACT ARE BOUGHT, KEPT IN STOCK, AND SOLD TO THE PUBLIC IN THE USUAL COURSE OF BUSINESS.

"/C) (1) EXCEPT AS HEREINAFTER PROVIDED, EVERY BID RECEIVED FROM ANY BIDDER WHO DOES NOT FALL WITHIN ONE OF THE FOREGOING CATEGORIES SHALL BE REJECTED BY THE CONTRACTING OFFICER.'

THE SUBSTANCE OF THESE REGULATIONS HAS BEEN EMBODIED IN THE ARMED SERVICES PROCUREMENT REGULATION ISSUED BY THE SECRETARY OF DEFENSE.

IN THE WALSH-HEALEY PUBLIC CONTRACTS ACT "RULINGS AND INTERPRETATIONS" NO. 3, PUBLISHED BY THE DEPARTMENT OF LABOR, SECTION 29 STATES AS FOLLOWS:

"/A) THE RESPONSIBILITY OF DETERMINING WHETHER OR NOT A BIDDER IS QUALIFIED AS A MANUFACTURER OR AS A REGULAR DEALER UNDER THE PUBLIC CONTRACTS ACT RESTS IN THE FIRST INSTANCE WITH THE CONTRACTING AGENCY. HOWEVER, ANY DECISIONS WHICH THE CONTRACTING OFFICER MIGHT MAKE IS SUBJECT TO REVIEW BY THE DEPARTMENT OF LABOR WHICH IS CHARGED WITH THE ADMINISTRATION OF THE ACT. THE DEPARTMENT OF LABOR MAY DETERMINE THE QUALIFICATIONS OF A BIDDER IN THE FIRST INSTANCE IN THE ABSENCE OF ANY DECISION BY THE CONTRACTING OFFICER.'

IT IS THUS CLEAR THAT, UNDER THE ACT CITED, AND THE REGULATIONS OF THE SECRETARY OF LABOR AUTHORIZED BY THE ACT, THE CONTRACTING OFFICER WAS ACTING PROPERLY AND WITHIN THE SCOPE OF HIS AUTHORITY IN DETERMINING YOUR LACK OF QUALIFICATIONS AS A "MANUFACTURER" OR "REGULAR DEALER.' THE POWER TO REVIEW THAT DETERMINATION RESTS IN THE DEPARTMENT OF LABOR, RATHER THAN IN THIS OFFICE. IN THE EVENT YOU STILL DESIRE A REVIEW OF THE CONTRACTING OFFICER'S DETERMINATION, IT WOULD THEREFORE APPEAR THAT YOU SHOULD ADDRESS A REQUEST FOR SUCH REVIEW TO THE DEPARTMENT OF LABOR.

IN THE ABSENCE OF A DETERMINATION BY THE SECRETARY OF LABOR THAT YOUR COMPANY QUALIFIES AS A MANUFACTURER OF, OR REGULAR DEALER IN, THE ITEMS UPON WHICH IT BID, NO FURTHER ACTION ON YOUR PROTEST WILL BE TAKEN BY THIS OFFICE.