B-150629, FEB. 23, 1963

B-150629: Feb 23, 1963

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DEFENSE SUPPLY AGENCY: REFERENCE IS MADE TO LETTER OF JANUARY 25. THE BIDDER WAS INDEBTED TO ITS EMPLOYEES FOR VACATION AND BACK PAY AND TO THE STATE OF KENTUCKY FOR TAXES. THE MATTER WAS SUBMITTED TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR CONSIDERATION WHETHER IT WOULD ISSUE A CERTIFICATE OF COMPETENCY (COC) IN THE CIRCUMSTANCES. WHILE THE BIDDER'S ELIGIBILITY FOR THE COC WAS PENDING. THIS INFORMATION WAS TRANSMITTED TO THE SBA. THAT IN THE FACE OF THE REPRESENTATION THAT THE WORK WAS TO BE SUBCONTRACTED ENTIRELY. BEFORE A CONTRACT WAS AWARDED TO ANY OTHER COMPANY. SENT TO THE CONTRACTING AGENCY A TELEGRAM STATING THAT THEY WERE CONFIRMING THE POSITION TAKEN BY OLIVE HILL MANUFACTURING COMPANY THAT IT HAS THE LEGAL RIGHT TO POSSESSION OF THE PLANT BUILDINGS AND EQUIPMENT FOR PERFORMANCE OF THE BID NOTWITHSTANDING THE NOTICE OF TERMINATION SENT BY THE LANDLORD.

B-150629, FEB. 23, 1963

TO DIRECTOR, DEFENSE SUPPLY AGENCY:

REFERENCE IS MADE TO LETTER OF JANUARY 25, 1963, FROM THE ASSISTANT COUNSEL REPORTING ON THE PROTEST OF OLIVE HILL MANUFACTURING COMPANY UNDER INVITATION DSA-1-63-368.

THE SUBJECT INVITATION, RESTRICTED TO SMALL-BUSINESS CONCERNS, SOLICITED BIDS FOR THE MANUFACTURE OF 53,220 JACKETS. OLIVE HILL MANUFACTURING COMPANY SUBMITTED THE LOWEST BID.

THE CONTRACTING OFFICER PROPOSED TO REJECT THE LOW BID ON THE BASIS THAT THE BIDDER LACKED PLANT CAPACITY AND FINANCE IN THAT THE BIDDER HAD NOTICE FROM ITS LANDLORD THAT THE LEASE ON ITS PLANT WOULD BE TERMINATED FOR NONPAYMENT OF RENT AS OF DECEMBER 26, 1962, AND THE BIDDER WAS INDEBTED TO ITS EMPLOYEES FOR VACATION AND BACK PAY AND TO THE STATE OF KENTUCKY FOR TAXES. ON DECEMBER 21, 1962, THE MATTER WAS SUBMITTED TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR CONSIDERATION WHETHER IT WOULD ISSUE A CERTIFICATE OF COMPETENCY (COC) IN THE CIRCUMSTANCES. WHILE THE BIDDER'S ELIGIBILITY FOR THE COC WAS PENDING, THE BIDDER ADVISED THE CONTRACTING AGENCY THAT THE WORK UNDER THE INVITATION WOULD BE SUBCONTRACTED ONE HUNDRED PERCENT TO ANOTHER MANUFACTURER. THIS INFORMATION WAS TRANSMITTED TO THE SBA. AS SBA REGULATIONS PROVIDE THAT A MANUFACTURER SHALL NOT BE ELIGIBLE FOR A COC UNLESS IT PERFORMS A SIGNIFICANT PART OF THE CONTRACT WITH ITS OWN FACILITIES AND PERSONNEL, THE SBA DECIDED ON JANUARY 4, 1963, THAT IN THE FACE OF THE REPRESENTATION THAT THE WORK WAS TO BE SUBCONTRACTED ENTIRELY, IT COULD NOT ACCEPT AN APPLICATION FOR A COC FROM THE BIDDER.

HOWEVER, BEFORE A CONTRACT WAS AWARDED TO ANY OTHER COMPANY, THE ATTORNEYS FOR THE LOW BIDDER'S LANDLORD ON JANUARY 15, 1963, SENT TO THE CONTRACTING AGENCY A TELEGRAM STATING THAT THEY WERE CONFIRMING THE POSITION TAKEN BY OLIVE HILL MANUFACTURING COMPANY THAT IT HAS THE LEGAL RIGHT TO POSSESSION OF THE PLANT BUILDINGS AND EQUIPMENT FOR PERFORMANCE OF THE BID NOTWITHSTANDING THE NOTICE OF TERMINATION SENT BY THE LANDLORD. FURTHER, THE BIDDER PROTESTED TO OUR OFFICE THE PROPOSED REJECTION OF ITS BID. AS PROCUREMENT REGULATIONS PROVIDE GENERALLY THAT WHERE A PROTEST IS MADE TO OUR OFFICE PRIOR TO AWARD OF A CONTRACT NO AWARD WILL BE MADE UNTIL THE PROTEST IS PASSED UPON BY OUR OFFICE, ALL PROCUREMENT ACTION UNDER THE INVITATION HAS BEEN SUSPENDED PENDING A DECISION BY OUR OFFICE.

INASMUCH AS THE CONTRACTING OFFICER, IN ARRIVING AT THE DETERMINATION THAT THE BIDDER WAS NOT RESPONSIBLE, RELIED, AT LEAST IN PART, UPON A NOTICE FROM THE LANDLORD TO THE BIDDER THAT THE LEASE ON ITS FACILITIES WOULD BE TERMINATED, OUR OFFICE CONSIDERS IT NECESSARY AND PROPER THAT THE CONTRACTING OFFICER NOW UNDERTAKE TO VERIFY THE ACCURACY OF THE NEW REPRESENTATIONS MADE CONCERNING THE AVAILABILITY OF THE PREMISES AND TO REDETERMINE THE BIDDER'S RESPONSIBILITY. IN THE EVENT THE CONTRACTING OFFICER DETERMINES AGAIN THAT THE BIDDER LACKS RESPONSIBILITY BECAUSE OF LACK OF CAPACITY OR CREDIT, THE MATTER SHOULD BE RESUBMITTED TO SBA FOR RECONSIDERATION OF THE ISSUANCE OF A COC. THE FACT THAT THE SBA ADVISED AT THE TIME THE ORIGINAL APPLICATION WAS CONSIDERED THAT IT HAD "CLOSED THE CASE IN QUESTION" IS NOT UNDERSTOOD TO PRECLUDE CONSIDERATION OF THE BIDDER'S ELIGIBILITY UNDER NEW CIRCUMSTANCES WHEN THEY ARISE BEFORE AWARD.