B-148023, MAR. 19, 1962

B-148023: Mar 19, 1962

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO SPRINGFIELD GREENE INDUSTRIES INC.: REFERENCE IS MADE TO YOUR TELEGRAM OF JANUARY 23. BIDS WERE REQUESTED FOR FURNISHING 45 SHOP EQUIPMENT SETS. THE INVITATION RESTRICTED THE BIDDING TO SMALL BUSINESS CONCERNS AND IN THE ATTACHED "NOTICE OF SMALL BUSINESS SET ASIDE" A SMALL BUSINESS CONCERN WAS DEFINED AS "A CONCERN THAT (1) IS CERTIFIED AS A SMALL BUSINESS CONCERN BY THE SMALL BUSINESS ADMINISTRATION. OR (11) IS INDEPENDENTLY OWNED AND OPERATED. IS NOT DOMINANT IN ITS FIELD OF OPERATION AND. THE BID OPENING WAS HELD ON OCTOBER 13. 519.50 WAS SUBMITTED BY THE SOUTHWEST TRUCK BODY COMPANY. IN YOUR BID FORM YOU REPRESENTED THAT YOU WERE A SMALL BUSINESS CONCERN. IT APPEARS THAT YOUR ELIGIBILITY AS A SMALL BUSINESS FIRM WAS DEPENDENT UPON THE ADDITIONAL 25 PERCENT FACTOR IN EMPLOYMENT NUMBER WHICH WAS AVAILABLE TO FIRMS LOCATED IN LABOR SURPLUS AREAS.

B-148023, MAR. 19, 1962

TO SPRINGFIELD GREENE INDUSTRIES INC.:

REFERENCE IS MADE TO YOUR TELEGRAM OF JANUARY 23, 1962, AND LETTER DATED FEBRUARY 1, 1962, PROTESTING AGAINST THE AWARD OF A CONTRACT TO THE SOUTHWEST TRUCK BODY COMPANY, INC., BY THE U.S. ARMY ENGINEER PROCUREMENT OFFICE, CHICAGO, ILLINOIS.

BY INVITATION NO. DA-ENG-11-184-62-CF-65JD, BIDS WERE REQUESTED FOR FURNISHING 45 SHOP EQUIPMENT SETS, GENERAL PURPOSE, REPAIR, SEMI TRAILER MOUNTED. THE INVITATION RESTRICTED THE BIDDING TO SMALL BUSINESS CONCERNS AND IN THE ATTACHED "NOTICE OF SMALL BUSINESS SET ASIDE" A SMALL BUSINESS CONCERN WAS DEFINED AS "A CONCERN THAT (1) IS CERTIFIED AS A SMALL BUSINESS CONCERN BY THE SMALL BUSINESS ADMINISTRATION, OR (11) IS INDEPENDENTLY OWNED AND OPERATED, IS NOT DOMINANT IN ITS FIELD OF OPERATION AND, WITH ITS AFFILIATES, EMPLOYS EITHER NOT MORE THAN 500 EMPLOYEES, OR, IF THE CONCERN QUALIFIES AS A LABOR SURPLUS AREA CONCERN, NOT MORE THAN 625 EMPLOYEES.'

THE BID OPENING WAS HELD ON OCTOBER 13, 1961, AND THE ABSTRACT OF BIDS RECEIVED SHOWS THAT OF THE THREE BIDS RECEIVED ON THE 45 SHOP EQUIPMENT SETS YOUR FIRM SUBMITTED THE LOWEST BID IN THE AMOUNT OF $2,036,005 AND THAT THE NEXT LOWEST BID IN THE AMOUNT OF $2,104,519.50 WAS SUBMITTED BY THE SOUTHWEST TRUCK BODY COMPANY. IN YOUR BID FORM YOU REPRESENTED THAT YOU WERE A SMALL BUSINESS CONCERN. IT APPEARS THAT YOUR ELIGIBILITY AS A SMALL BUSINESS FIRM WAS DEPENDENT UPON THE ADDITIONAL 25 PERCENT FACTOR IN EMPLOYMENT NUMBER WHICH WAS AVAILABLE TO FIRMS LOCATED IN LABOR SURPLUS AREAS.

IT IS REPORTED THAT AS A RESULT OF A ROUTINE CHECK OF THE DEPARTMENT OF LABOR, OCTOBER 1961 SUPPLEMENT TO AREA LABOR MARKET TRENDS, AND INFORMATION RECEIVED INCIDENT TO A SEPARATE PROCUREMENT ACTION, IT WAS NOTED THAT SPRINGFIELD, OHIO, THE CITY IN WHICH YOUR FIRM IS LOCATED AND IN WHICH THE WORK WAS TO BE PERFORMED, WAS NO LONGER INCLUDED IN THE LABOR SURPLUS AREA LIST. IN THIS CONNECTION, THE CONTRACTING OFFICER REPORTS THAT SPRINGFIELD, OHIO, WAS AGAIN OMITTED FROM THE LABOR SURPLUS AREA LIST IN THE JANUARY 1962 ISSUE OF AREA LABOR MARKET TRENDS. IT IS ALSO REPORTED THAT THE LOCAL SMALL BUSINESS ADMINISTRATION (SBA) OFFICE WAS ASKED TO DETERMINE WHETHER YOUR CORPORATION WAS CONSIDERED SMALL BUSINESS FOR THIS PROCUREMENT AND THAT BY LETTER DATED NOVEMBER 9, 1961, THE SBA OFFICE IN CHICAGO, ILLINOIS, ADVISED THE CONTRACTING OFFICE THAT ON OCTOBER 31, 1961, SPRINGFIELD, OHIO, HAD BEEN STRICKEN FROM THE LISTING OF PERSISTENT AND SUBSTANTIAL LABOR SURPLUS AREAS AND THAT THEREFORE SPRINGFIELD GREENE INDUSTRIES INC., WAS A LARGE BUSINESS AS OF THAT DATE FOR GOVERNMENT PROCUREMENT PURPOSES. THE RECORD INDICATES THAT ANOTHER INQUIRY WAS MADE OF THE SBA REGIONAL OFFICE IN CLEVELAND, OHIO, ON NOVEMBER 14 AS TO YOUR SIZE STATUS UNDER THE SUBJECT INVITATION, PURSUANT TO SECTION 1-703 (B) (2) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). BY TELEGRAM DATED NOVEMBER 17, 1961, THE SBA REGIONAL OFFICE AT CLEVELAND, OHIO, ADVISED THE CONTRACTING OFFICE THAT IT HAD DETERMINED THAT YOUR FIRM WAS LARGE BUSINESS. THE RECORD ALSO INDICATES THAT ON VARIOUS OCCASIONS A REPRESENTATIVE OF YOUR FIRM WAS INFORMALLY ADVISED OF THE DETERMINATION BY THE SBA.

SUBSEQUENT TO THE RECEIPT OF THE NOVEMBER 17, 1961, DETERMINATION OF THE SBA THE THREE BIDS RECEIVED UNDER THE INVITATION WERE EVALUATED BY A CONTRACT REVIEW BOARD AND IT WAS CONCLUDED THAT YOUR BID WAS NOT RESPONSIVE TO THE TERMS OF THE INVITATION. THE CONTRACTING OFFICER STATES THAT A LETTER DATED DECEMBER 14, 1961, WAS MAILED TO YOU ADVISING THAT SINCE YOUR FIRM WAS NO LONGER IN A DEPRESSED LABOR AREA YOUR BID COULD NOT BE CONSIDERED FOR AWARD AS IT WAS NOT RESPONSIVE TO THE TERMS AND CONDITIONS OF THE INVITATION. IT WAS POINTED OUT THAT YOUR CORPORATION WAS CONSIDERED TO BE LARGE BUSINESS AND THAT THIS PROCUREMENT WAS SET ASIDE FOR SMALL BUSINESS CONCERNS ONLY. THE CONTRACTING OFFICER REPORTS THAT IN VIEW OF THE NONRESPONSIVE CHARACTER OF YOUR BID, IT WAS CONCLUDED THAT NO USEFUL PURPOSE WOULD BE SERVED BY FURTHER DELAY IN MAKING THE AWARD; THAT THE SUPPLIES UNDER THE PROCUREMENT WERE URGENTLY NEEDED; AND THAT THE SOUTHWEST TRUCK BODY COMPANY, THE LOW RESPONSIVE BIDDER, WAS VERY RELUCTANT TO AGREE TO ITS CURRENT EXTENSION OF BID ACCEPTANCE DATE TO DECEMBER 29, 1961, BECAUSE OF ITS CONCERN ABOUT POSSIBLY RISING SUBCONTRACT COSTS. IN VIEW OF THESE FACTORS, THE CONTRACT WAS AWARDED TO THE SOUTHWEST TRUCK BODY COMPANY ON DECEMBER 29, 1961.

IN YOUR LETTER OF JANUARY 31, 1962, TO THE CONTRACTING OFFICER, YOU PROTESTED THE AWARD THAT WAS MADE TO THE SOUTHWEST TRUCK BODY COMPANY. YOU STATE---

"THE AWARD TO SOUTHWEST TRUCK BODY COMPANY ON INVITATION FOR BID NO. ENG- 11-184-62CF-65JD, IS HEREWITH FORMALLY PROTESTED FOR THE FOLLOWING REASONS:

"1. IN AWARDING THE CONTRACT TO SOUTHWEST TRUCK BODY COMPANY, THE GOVERNMENT IS INCURRING AN ADDITIONAL COST OF $1,670 PER UNIT, FOR A TOTAL COST OF $75,350 OVER AND ABOVE OUR BID; AND A FURTHER ADDITIONAL COST OF $18,370 IF THE OPTIONAL QUANTITY CLAUSE OF THE CONTRACT IS INVOKED.

"FURNISHING A UNIT TO SOUTHWEST TRUCK BODY COMPANY AS A PROTOTYPE FREEZES ANOTHER $41,311.26 UNTIL CONTRACT IS COMPLETED.

"2. THE CORPS OF ENGINEERS HAD QUESTIONED THE SMALL BUSINESS STATUS OF SPRINGFIELD GREENE INDUSTRIES INC. AFTER THE CONTRACTING OFFICER RAISED A QUESTION OF STATUS, SUBSEQUENTLY VIEWED BY SMALL BUSINESS ADMINISTRATION AS A PROTEST, WE SUBMITTED SMALL BUSINESS ADMINISTRATION FORM 355 THROUGH PROPER CHANNELS IN RESPONSE TO THE PROTEST.

"OUR APPLICATION, WHICH WAS CLEARLY LABELED "APPLICATION HEREIN FILED FOR DETERMINATION OF SMALL BUSINESS STATUS OF PROTESTED LOW BIDDER UNDER SECTION 121.3-5 (A) AND (B), SMALL BUSINESS ADMINISTRATION RULES AND REGULATIONS (26 F.R. 5708, AS CORRECTED 6642)," WAS GRANTED AND WE HAVE BEEN CERTIFIED SMALL BUSINESS FOR THE PURPOSE OF MAKING BIDS AND PROPOSALS TO THE GOVERNMENT FOR MOBILE MACHINE SHOPS. (SEE EXHIBIT 11, INCLOSURE 2).

"3. THE CORPS OF ENGINEERS WAS ADVISED THAT REMOVAL OF SPRINGFIELD, OHIO, FROM THE LABOR SURPLUS AREA LIST, WAS ONLY TEMPORARY AND SPRINGFIELD, OHIO, WOULD BE RETURNED TO THE SURPLUS LABOR AREA LIST BY THE END OF JANUARY 1962. THE OHIO STATE UNEMPLOYMENT BUREAU ADVISED UNDER DATE OF JANUARY 26, 1962, THAT THE DEPARTMENT OF LABOR LISTING WILL CLASSIFY SPRINGFIELD, OHIO, AS LABOR SURPLUS AREA IN THE OFFICIAL DOCUMENT DATED JANUARY 31, 1962.

"IT IS SUBMITTED THAT A CONTRACTING OFFICER WOULD NOT SOLICIT EXTENSION OF A BID GUARANTEE FROM A BIDDER WHO WAS CONSIDERED NON RESPONSIVE. IT IS ALSO INTERESTING TO NOTE THAT CERTIFICATION OF SPRINGFIELD GREENE INDUSTRIES INC. BY SMALL BUSINESS ADMINISTRATION, WAS RECEIVED PRIOR TO EXPIRATION OF THE BID PRICE GUARANTEE EXTENSION. UNDER THE CIRCUMSTANCES HERE PRESENT, IT IS CLEAR THAT THE REAL ISSUE WAS NOT RESPONSIVENESS, BUT STATUS, WHICH AFTER PROTEST HAS FINALLY BEEN DETERMINED IN OUR FAVOR BY SMALL BUSINESS ADMINISTRATION.

"IN SUMMARY, FROM THE TIME OUR BID WAS ENTERED UNTIL PROTEST OF SMALL BUSINESS STATUS WAS MADE, PROCUREMENT PROCEEDED AS THOUGH OUR BID WAS RESPONSIVE AND QUESTIONED ONLY OUR SMALL BUSINESS STATUS. AFTER THE QUESTION RAISED BY THE CONTRACTING OFFICER WAS CONSTRUCTED AS A PROTEST, AS INDICATED IN SMALL BUSINESS ADMINISTRATION LIST DATED DECEMBER 12, 1961, WE FILED SMALL BUSINESS ADMINISTRATION FORM 355 CLEARLY LABELED AS IN RESPONSE TO THE PROTEST. JANUARY 4, 1962 WE WERE ADVISED THAT OUR APPLICATION, FILED IN RESPONSE TO PROTEST, HAD BEEN GRANTED. ACCORDINGLY, WE WERE ENTITLED AS LOW BIDDER TO BE AWARDED THE CONTRACT IN QUESTION.

"IT IS HEREBY REQUESTED THAT AWARD OF THE CONTRACT BE WITHDRAWN FROM SOUTHWEST TRUCK BODY CO., AND AWARDED TO SPRINGFIELD GREENE INDUSTRIES INC., THE LOWEST RESPONSIVE BIDDER UNDER THE TERMS AND CONDITIONS OF THE INVITATION.'

SECTION 8 (B) (6) OF THE SMALL BUSINESS ACT, AS AMENDED BY PUBLIC LAW 85- 536, 72 STAT. 384, 390, 15 U.S.C. 637 (B) (6), AUTHORIZES THE SMALL BUSINESS ADMINISTRATION TO DETERMINE WHICH BUSINESS ENTERPRISES ARE TO BE DESIGNATED AS SMALL BUSINESS CONCERNS AND MAKES ITS DETERMINATIONS IN THESE MATTERS CONCLUSIVE. SPECIFICALLY, THAT SECTION PROVIDES THAT "OFFICERS OF THE GOVERNMENT * * * SHALL ACCEPT AS CONCLUSIVE THE ADMINISTRATION'S DETERMINATION AS TO WHICH ENTERPRISES ARE TO BE DESIGNATED "SMALL BUSINESS CONCERNS" * * *.'

GENERALLY, THE FINAL DETERMINATION OF THE ELIGIBILITY OF A BIDDER AS A SMALL BUSINESS CONCERN UNDER A SMALL BUSINESS RESTRICTED INVITATION IS MADE AS OF THE DATE OF AWARD. THE DATE OF AWARD MUST OF NECESSITY FIX AND ESTABLISH THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO THE CONTRACT, INCLUDING THE LEGAL CAPACITY OF A BIDDER TO RECEIVE AN AWARD WHICH IS RESTRICTED BY STATUTE TO A CERTAIN CLASS OF BIDDERS. B-143630, OCTOBER 13, 1960.

THAT PORTION OF THE INVITATION IN WHICH IT WAS STATED THAT BIDS "RECEIVED FROM FIRMS NOT CLASSIFIED AS SMALL BUSINESS WILL BE CONSIDERED AS NON- RESPONSIVE" WAS INTENDED SOLELY TO PREVENT AN AWARD TO, AND PERFORMANCE BY, A BIDDER WHO WOULD NOT MEET THE CRITERIA OF SUCH CLASSIFICATION. THE DETERMINATION BY THE SBA ON NOVEMBER 17, 1961, WAS CONCLUSIVE ON THAT POINT.

IN YOUR LETTER OF JANUARY 31, 1962, YOU STATE THAT THE SBA, BY LETTER DATED JANUARY 4, 1962, CERTIFIED YOU AS SMALL BUSINESS FOR THE PURPOSE OF MAKING BIDS AND PROPOSALS TO THE GOVERNMENT FOR MOBILE MACHINE SHOPS, AND WITH YOUR LETTER YOU SUBMITTED A COPY OF THE LETTER RECEIVED FROM THE SBA. IT IS NOTED FROM THE SBA LETTER THAT THE CERTIFICATION WAS EFFECTIVE AS OF JANUARY 4, 1962. SINCE YOUR ELIGIBILITY AS A SMALL BUSINESS CONCERN IS DETERMINED AS OF THE DATE OF THE AWARD, SUCH CERTIFICATION WOULD HAVE NO EFFECT AS TO YOUR ELIGIBILITY UNDER INVITATION FOR BIDS NO. DA-ENG-11- 184-62-CF-65JD, SINCE THE AWARD UNDER THAT INVITATION WAS MADE PRIOR TO THE CERTIFICATION OF JANUARY 4, 1962.

IT IS FURTHER REPORTED THAT YOUR BID WAS NONRESPONSIVE TO THE TERMS OF THE INVITATION WITH RESPECT TO CERTAIN COMPONENTS OR ITEMS OFFERED BY YOU UNDER THE BRAND NAME OR EQUAL PROVISIONS OF THE SPECIFICATIONS IN THAT CERTAIN OF THE COMPONENTS OFFERED IN YOUR BID WERE DEFICIENT AND NOT EQUAL TO BRAND NAMES SPECIFIED. HOWEVER, IN VIEW OF OUR CONCLUSION WITH RESPECT TO THE QUESTION INVOLVING YOUR SMALL BUSINESS SIZE STATUS, THAT ASPECT OF THE CASE NEED NOT BE CONSIDERED.

IN VIEW OF THE FOREGOING WE FIND NO BASIS FOR OBJECTING TO THE AWARD MADE TO THE SOUTHWEST TRUCK BODY COMPANY.