B-148715, JUN. 25, 1962

B-148715: Jun 25, 1962

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THE BASIS STATED BY THE CONTRACTING OFFICER FOR REJECTION OF YOUR BID IS THAT YOUR FIRM DOES NOT QUALIFY AS A REGULAR DEALER OR MANUFACTURER OF THE SUPPLIES. SECTION 1-903.1 (I) OF THE ARMED SERVICES PROCUREMENT REGULATION LIMITS AWARD OF SUPPLY CONTRACTS TO BIDDERS WHO ARE DETERMINED TO BE MANUFACTURERS OF OR REGULAR DEALERS IN THE SUPPLIES UNDER PROCUREMENT. YOUR BID INDICATED THAT YOUR FIRM WAS A MANUFACTURER OF THE SUPPLIES BID UPON. A MANUFACTURER IS DEFINED AT ASPR 1-201.18 (B) (I) AS A PERSON OR FIRM. ACCORDINGLY HE IS PRECLUDED BY THE TERMS OF ASPR 1-903.1 FROM MAKING A POSITIVE DETERMINATION. YOUR FIRM IS RESPONSIBLE. 000 IN AMOUNT ENTERED INTO BY ANY GOVERNMENT AGENCY FOR THE PROCUREMENT OF SUPPLIES SHALL CONTAIN A STIPULATION THAT THE CONTRACTOR IS A MANUFACTURER OF OR REGULAR DEALER IN SUCH SUPPLIES AND THAT ANY BREACH OF SUCH STIPULATION SHALL RENDER THE CONTRACTOR LIABLE FOR LIQUIDATED DAMAGES.

B-148715, JUN. 25, 1962

TO TIGRETT INDUSTRIES:

WE REFER AGAIN TO YOUR PROTEST INCLUDED IN A TELEGRAM OF APRIL 19 AND A LETTER OF APRIL 20, 1962, AGAINST THE REJECTION OF YOUR LOW BID ON ITEM 1 OF INVITATION FOR BIDS NO. ORD-11-173-62-42, ISSUED BY THE ORDNANCE AMMUNITION COMMAND ON FEBRUARY 5, 1962, FOR THE PROCUREMENT OF AIR BURST SIMULATOR PROJECTILES. THE BASIS STATED BY THE CONTRACTING OFFICER FOR REJECTION OF YOUR BID IS THAT YOUR FIRM DOES NOT QUALIFY AS A REGULAR DEALER OR MANUFACTURER OF THE SUPPLIES. REGULAR DEALER OR MANUFACTURER THE SUPPLIES.

SECTION 1-903.1 (I) OF THE ARMED SERVICES PROCUREMENT REGULATION LIMITS AWARD OF SUPPLY CONTRACTS TO BIDDERS WHO ARE DETERMINED TO BE MANUFACTURERS OF OR REGULAR DEALERS IN THE SUPPLIES UNDER PROCUREMENT.

YOUR BID INDICATED THAT YOUR FIRM WAS A MANUFACTURER OF THE SUPPLIES BID UPON. A MANUFACTURER IS DEFINED AT ASPR 1-201.18 (B) (I) AS A PERSON OR FIRM---

"* * * (A) WHO OWNS, OPERATES, OR MAINTAINS A FACTORY OR ESTABLISHMENT THAT PRODUCES ON THE PREMISES THE MATERIALS, SUPPLIES, ARTICLES, OR EQUIPMENT REQUIRED UNDER THE CONTRACT OR OF THE GENERAL CHARACTER DESCRIBED BY THE SPECIFICATIONS; OR

(B) WHO, IF NEWLY ENTERING INTO A MANUFACTURING ACTIVITY OF THE TYPE DESCRIBED IN (A) ABOVE, HAS MADE ALL NECESSARY PRIOR ARRANGEMENTS FOR MANUFACTURING SPACE, EQUIPMENT, AND PERSONNEL, TO PERFORM THE MANUFACTURING OPERATIONS REQUIRED FOR CONTRACT PERFORMANCE;

AND WHO, PRIOR TO BEING AWARDED A CONTRACT, SATISFIES THE CONTRACTING OFFICER THAT HE QUALIFIES UNDER PARAGRAPH (A) OR (B) ABOVE; * * *.'

THE CONTRACTING OFFICER HAS DETERMINED THAT YOUR FIRM DOES NOT QUALIFY AS A MANUFACTURER OF SUPPLIES UNDER THAT DEFINITION. ACCORDINGLY HE IS PRECLUDED BY THE TERMS OF ASPR 1-903.1 FROM MAKING A POSITIVE DETERMINATION--- A NECESSARY PREREQUISITE TO ELIGIBILITY FOR AWARD--- THAT, WITH RESPECT TO THE PROCUREMENT UNDER CONSIDERATION, YOUR FIRM IS RESPONSIBLE.

FURTHER, THE WALSH-HEALEY PUBLIC CONTRACTS ACT OF JUNE 30, 1936, AS AMENDED, 41 U.S.C. 35, PROVIDES IN PART THAT, WITH CERTAIN EXCEPTIONS NOT HERE MATERIAL, EVERY CONTRACT EXCEEDING $10,000 IN AMOUNT ENTERED INTO BY ANY GOVERNMENT AGENCY FOR THE PROCUREMENT OF SUPPLIES SHALL CONTAIN A STIPULATION THAT THE CONTRACTOR IS A MANUFACTURER OF OR REGULAR DEALER IN SUCH SUPPLIES AND THAT ANY BREACH OF SUCH STIPULATION SHALL RENDER THE CONTRACTOR LIABLE FOR LIQUIDATED DAMAGES, AND CONSTITUTE GROUNDS FOR CANCELLATION OF THE CONTRACT. THE ACT, AS AMENDED, FURTHER PROVIDES AT 41 U.S.C. 38 THAT THE SECRETARY OF LABOR SHALL HAVE AUTHORITY TO ADMINISTER THE PROVISIONS OF THE ACT, AND TO MAKE SUCH RULES AND REGULATIONS AS MAY BE NECESSARY TO THAT END.

UNDER THAT AUTHORITY, THE SECRETARY OF LABOR HAS ISSUED REGULATIONS APPEARING AT 41 C.F.R. 50-201.101 WHICH PROVIDE:

"/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.

"/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.'

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

"/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 DECISION 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.'

IN ACCORDANCE WITH THE ABOVE-QUOTED REGULATIONS AND RULINGS, AND SINCE THE PROCUREMENT EXCEEDS THE STATUTORY MINIMUM DOLLAR AMOUNT, THE CONTRACTING OFFICER REFERRED THE QUESTION OF YOUR FIRM'S QUALIFICATION AS A MANUFACTURER OF THE ITEM UNDER PROCUREMENT TO THE DEPARTMENT OF LABOR. THE DEPARTMENT, AFTER FULLY CONSIDERING THE MATTER, HAS DETERMINED, AS YOU WERE ADVISED BY LETTER OF MAY 29, 1962, THAT NO BASIS EXISTS FOR DISTURBING THE CONTRACTING OFFICER'S FINDINGS.

WE REGARD IT AS CLEAR FROM THE FOREGOING THAT A DETERMINATION AS TO A BIDDER'S QUALIFICATIONS AS A MANUFACTURER IS BY LAW AND REGULATION THE RESPONSIBILITY OF THE CONTRACTING OFFICER, SUBJECT TO REVIEW BY THE DEPARTMENT OF LABOR, WHICH HAS THE FINAL AUTHORITY. IN VIEW THEREOF, WE FIND NO LEGAL BASIS FOR DISTURBING THE DETERMINATION AS TO YOUR STATUS AS A MANUFACTURER FOR PURPOSES OF THE PROCUREMENT. SEE B 140186, SEPTEMBER 1, 1959.