B-149108, JUN. 27, 1962

B-149108, JUN. 27, 1962

STRASSER, SPIEGELBERG, KAMPELMAN AND MCLAUGHLIN:

BY LETTERS DATED JUNE 6, 8 AND 18, 1962, YOU PROTESTED AGAINST ANY AWARD TO AN OFFEROR OTHER THAN GULF COAST AVIATION COMPANY, INC., UNDER A REQUEST FOR PROPOSALS ISSUED ON MARCH 8, 1962, BY WARNER ROBINS AIR MATERIEL AREA, GEORGIA, FOR VEHICLE MAINTENANCE SERVICE FROM JULY 1, 1962, OR FROM DATE OF AWARD IF SUBSEQUENT THERETO, TO JUNE 30, 1963.

THE LOWEST PROPOSAL EVALUATED UNDER THE CRITERIA PROVIDED IN THE REQUEST FOR PROPOSALS WAS RECEIVED FROM THE GLENN A. SMITH COMPANY IN THE AMOUNT OF $166,191. THE NEXT LOWEST EVALUATED PROPOSAL WAS SUBMITTED BY GULF COAST IN THE AMOUNT OF $200,826. PURSUANT TO ASPR 1 905, AN INVESTIGATION WAS MADE OF THE RESPONSIBILITY OF SMITH AS A PROSPECTIVE CONTRACTOR. REPORT OF A FACILITY ADVISORY BOARD FOUND THAT SMITH WAS NOT A RESPONSIBLE PROSPECTIVE CONTRACTOR UNDER THE CRITERIA SET FORTH IN ASPR 1-903.1 IN THAT HE WAS DEFICIENT IN FACILITIES, ENGINEERING AND PRODUCTION, DELIVERY SCHEDULE, FINANCIAL, ACCOUNTING SYSTEM AND PURCHASING SYSTEM. THEREAFTER, BY LETTER DATED MAY 23, 1962, THE SMALL BUSINESS ADMINISTRATION ADVISED THE CONTRACTING OFFICER THAT IT HAD ISSUED A CERTIFICATE OF COMPETENCE TO SMITH WITH RESPECT TO THIS PROCUREMENT. WE ARE ADVISED THAT IN THE INTERIM BETWEEN THE INVESTIGATION OF SMITH'S RESPONSIBILITY AND THE ISSUANCE OF THE CERTIFICATE OF COMPETENCY, SMITH OBTAINED THE FINANCIAL BACKING OF A J. RAN COOPER, A LEASE OF VEHICLE MAINTENANCE FACILITIES FOR THE TERM OF ANY RESULTING CONTRACT, AND ASSURANCES FROM COMPETENT PERSONNEL.

IN ESSENCE THE PROTEST IS BASED ON THE CONTENTION THAT SINCE ANY RESULTING CONTRACT WOULD BE SUBJECT TO THE WALSH-HEALEY PUBLIC CONTRACTS ACT, 41 U.S.C. 35-45, AWARD MAY NOT BE MADE TO SMITH BECAUSE IT IS NOT A "MANUFACTURER" WITHIN THE MEANING OF THE ACT.

THE DEPARTMENT OF LABOR BY CIRCULAR LETTER NO. 5-61, MAY 16, 1961, ADVISED ALL CONTRACTING AND PURCHASING OFFICERS THAT CONTRACTS IN EXCESS OF $10,000 FOR THE MAINTENANCE AND REPAIR OF GOVERNMENT VEHICLES ON WHICH THE FURNISHING OF REPLACEMENT PARTS IS A SUBSTANTIAL OR IMPORTANT FACTOR IN THE PERFORMANCE OF THE CONTRACT ARE SUBJECT TO THE WALSH-HEALEY PUBLIC CONTRACTS ACT. THE AIR FORCE HAS DETERMINED THAT:

"* * * GLENN A. SMITH IS A MANUFACTURER IN ACCORDANCE WITH ASPR 1 201.18 (B) (I) (B) WHICH PROVIDES; "A MANUFACTURER IS A PERSON OR FIRM 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.' THE DETERMINATION THAT THE CONTRACTOR WILL BE PERFORMING A MANUFACTURING OPERATION IS BASED UPON PREVIOUS EXPERIENCE WITH THIS TYPE OF REPAIR AND MAINTENANCE PROGRAM WHICH REQUIRES THE CONTRACTOR TO PERFORM MAJOR OVERHAUL TEARDOWN, REBUILD AND ASSEMBLY TYPE OPERATIONS. * * *"

CIRCULAR LETTER NO. 8-61 DATED JULY 6, 1961, ISSUED BY THE DEPARTMENT OF LABOR, PRESCRIBES THE CRITERIA BY WHICH CONTRACTING AGENCIES MAY DETERMINE THE ELIGIBILITY OF BIDDERS TO RECEIVE AWARDS OF CONTRACTS SUBJECT TO THE WALSH-HEALEY PUBLIC CONTRACTS ACT, AS FOLLOWS:

"1. MANUFACTURER

"REGULATIONS PART 50-201, SECTION 50-201.101 (A) DEFINES A MANUFACTURER AS "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.'

"A BIDDER WHO DESIRES TO QUALIFY FOR AN AWARD AS A MANUFACTURER MUST SHOW BEFORE THE AWARD THAT HE IS (1) AN ESTABLISHED MANUFACTURER OF THE PARTICULAR GOODS OR GOODS OF THE GENERAL CHARACTER SOUGHT BY THE GOVERNMENT OR (2) IF HE IS NEWLY ENTERING INTO SUCH MANUFACTURING ACTIVITY THAT HE HAS MADE ALL NECESSARY PRIOR ARRANGEMENTS FOR (A) MANUFACTURING SPACE, (B) EQUIPMENT, AND (C) PERSONNEL TO PERFORM MANUFACTURING OPERATIONS REQUIRED FOR THE FULFILLMENT OF THE CONTRACT. A NEW FIRM WHICH, PRIOR TO THE AWARD OF A CONTRACT, HAS MADE SUCH DEFINITE COMMITMENTS IN ORDER TO ENTER A MANUFACTURING BUSINESS WHICH WILL LATER QUALIFY IT SHOULD NOT BE BARRED FROM RECEIVING THE AWARD BECAUSE IT HAS NOT YET DONE ANY MANUFACTURING. THIS INTERPRETATION IS NOT INTENDED, HOWEVER, TO QUALIFY A FIRM WHOSE ARRANGEMENTS TO USE SPACE, EQUIPMENT OR PERSONNEL ARE CONTINGENT UPON THE AWARD OF A GOVERNMENT CONTRACT.'

SUFFICIENT AND SATISFACTORY EVIDENCE HAS BEEN FURNISHED OUR OFFICE THAT SMITH HAS ENTERED INTO DEFINITE, BINDING COMMITMENTS FOR SPACE, EQUIPMENT AND PERSONNEL NECESSARY FOR PERFORMANCE OF THE CONTRACT WORK. WHILE THESE ARRANGEMENTS WERE EFFECTED SUBSEQUENT TO RECEIPT AND EVALUATION OF THE PROPOSALS BY THE GOVERNMENT, WE HAVE HELD THAT INFORMATION RELATING TO RESPONSIBILITY--- AS DISTINGUISHED FROM RESPONSIVENESS--- MAY BE SUPPLIED AFTER BIDS ARE REVEALED WITHOUT CAUSING PREJUDICE TO CONSIDERATION OF THE BID. 39 COMP. GEN. 655; ID. 247; B-138322, JANUARY 20, 1959; ALSO, 38 COMP. GEN. 423.

THE SUPREME COURT AND OUR OFFICE HAVE TAKEN THE POSITION--- IN VIEW OF THE AUTHORITY AND RESPONSIBILITY OF THE DEPARTMENT OF LABOR UNDER THE WALSH-HEALEY PUBLIC CONTRACTS ACT--- THAT THE DETERMINATION OF A BIDDER'S QUALIFICATIONS AS A MANUFACTURER WITHIN THE MEANING OF THE ACT AND ITS IMPLEMENTING REGULATIONS IS PRIMARILY THE RESPONSIBILITY OF THE CONTRACTING OFFICER SUBJECT TO REVIEW BY THE DEPARTMENT OF LABOR WHICH IS THE FINAL REVIEW AUTHORITY. SEE ENDICOTT JOHNSON CORPORATION V. PERKINS, 317 U.S. 501; B-148715, JUNE 25, 1962; B 147877, MAY 10, 1962; B-145015, MAY 8, 1961; 21 COMP. GEN. 9, DEPARTMENT OF LABOR RULINGS AND INTERPRETATIONS NO. 3, APRIL 30, 1953. WE, THEREFORE, CANNOT QUESTION THE ADMINISTRATIVE DETERMINATION THAT SMITH QUALIFIES AS A MANUFACTURER FOR PURPOSES OF THIS PROCUREMENT.

IT IS FURTHER STATED IN YOUR LETTER OF JUNE 18, 1962, THAT SMITH IS NOT A RESPONSIBLE PROSPECTIVE CONTRACTOR NOTWITHSTANDING THE CERTIFICATE OF COMPETENCY ISSUED BY THE SMALL BUSINESS ADMINISTRATION. IN 38 COMP. GEN. 864 WE HELD THAT A CERTIFICATE OF COMPETENCY ISSUED PURSUANT TO 15 U.S.C. 637 (B) (7) IS CONCLUSIVE AS TO SUCH ELEMENTS OF RESPONSIBILITY RELATING TO ABILITY TO PERFORM, EXPERIENCE, SKILL, KNOW HOW, TECHNICAL KNOWLEDGE AND FACILITIES. THUS, EVEN THOUGH IT WAS INITIALLY DETERMINED THAT SMITH WAS NONRESPONSIBLE, THE ISSUANCE OF THE CERTIFICATE OF COMPETENCY CURED SUCH ADMINISTRATION OBJECTIONS AND RENDERED MEET ANY QUESTION OF SMITH'S RESPONSIBILITY EXCEPT AS TO CERTAIN ELEMENTS OF RESPONSIBILITY NOT PERTINENT HERE. SEE ASPR 1 705.6 (A).