B-150676, FEB. 7, 1963

B-150676: Feb 7, 1963

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TO THE PEOPLES COMPANY: REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 12. SINCE YOUR PROTEST WAS FILED PRIOR TO AN AWARD OF THE SET-ASIDE PORTION. IFB NO. 383-195-63 WAS ISSUED ON AUGUST 30. 712 VESTS AND YOKES WERE SET ASIDE FOR AWARD TO LABOR SURPLUS AREA CONCERNS. BIDDERS WERE ADVISED OF THE PROCEDURES FOR AWARDING SUCH SET-ASIDE PORTION BY PARAGRAPH 101-6.3 OF THE INVITATION WHICH READS. NEGOTIATIONS FOR AWARD OF THE SET-ASIDE PORTION WILL BE CONDUCTED ONLY WITH RESPONSIBLE LABOR SURPLUS AREA CONCERNS (AND SMALL BUSINESS CONCERNS TO THE EXTENT INDICATED BELOW) WHO HAVE SUBMITTED RESPONSIVE BIDS OR PROPOSALS ON THE NON-SET-ASIDE PORTION AT A UNIT PRICE WITHIN 120 PERCENT OF THE HIGHEST AWARD MADE ON THE NON-SET-ASIDE PORTION.

B-150676, FEB. 7, 1963

TO THE PEOPLES COMPANY:

REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 12, 1962, TO THE AVIATION SUPPLY OFFICE AT PHILADELPHIA, PROTESTING AGAINST THE FAILURE OF THE CONTRACTING OFFICER TO CLASSIFY YOUR COMPANY AS A LABOR SURPLUS AREA CONCERN FOR THE PURPOSE OF AWARDING THE LABOR SURPLUS AREA SET ASIDE PORTION OF IFB NO. 383-195-63.

SINCE YOUR PROTEST WAS FILED PRIOR TO AN AWARD OF THE SET-ASIDE PORTION, IT HAS BEEN FORWARDED TO THE GENERAL ACCOUNTING OFFICE FOR DETERMINATION PURSUANT TO PARAGRAPH 2-407.9 (B) (2) OF THE ARMED SERVICES PROCUREMENT REGULATION.

IFB NO. 383-195-63 WAS ISSUED ON AUGUST 30, 1962, AND, AS AMENDED, REQUESTED BIDS ON A TOTAL OF 46,713 FIBROUS GLASS FILLED LIFE PRESERVER VESTS AND YOKES. THE INVITATION ALSO ADVISED THAT 46,712 VESTS AND YOKES WERE SET ASIDE FOR AWARD TO LABOR SURPLUS AREA CONCERNS, AND BIDDERS WERE ADVISED OF THE PROCEDURES FOR AWARDING SUCH SET-ASIDE PORTION BY PARAGRAPH 101-6.3 OF THE INVITATION WHICH READS, IN PERTINENT PART, AS FOLLOWS:

"101-6.3 NOTICE OF LABOR SURPLUS AREA SET-ASIDE:

(A) GENERAL. A PORTION OF THIS PROCUREMENT, AS IDENTIFIED ELSEWHERE IN THE SCHEDULE, HAS BEEN SET ASIDE FOR AWARD ONLY TO ONE OR MORE LABOR SURPLUS AREA CONCERNS, AND, TO A LIMITED EXTENT, TO SMALL BUSINESS CONCERNS WHICH DO NOT QUALIFY AS LABOR SURPLUS AREA CONCERNS. NEGOTIATIONS FOR AWARD OF THE SET-ASIDE PORTION WILL BE CONDUCTED ONLY WITH RESPONSIBLE LABOR SURPLUS AREA CONCERNS (AND SMALL BUSINESS CONCERNS TO THE EXTENT INDICATED BELOW) WHO HAVE SUBMITTED RESPONSIVE BIDS OR PROPOSALS ON THE NON-SET-ASIDE PORTION AT A UNIT PRICE WITHIN 120 PERCENT OF THE HIGHEST AWARD MADE ON THE NON-SET-ASIDE PORTION. NEGOTIATIONS FOR THE SET-ASIDE PORTION WILL BE CONDUCTED WITH SUCH BIDDERS IN THE FOLLOWING ORDER OF PRIORITY:

GROUP 1. PERSISTENT LABOR SURPLUS AREA CONCERNS WHICH ARE ALSO SMALL BUSINESS CONCERNS.

GROUP 2. OTHER PERSISTENT LABOR SURPLUS AREA CONCERNS.

GROUP 3. SUBSTANTIAL LABOR SURPLUS AREA CONCERNS WHICH ARE ALSO SMALL BUSINESS CONCERNS.

GROUP 4. OTHER SUBSTANTIAL LABOR SURPLUS AREA CONCERNS.

GROUP 5. SMALL BUSINESS CONCERNS WHICH ARE NOT LABOR SURPLUS AREA CONCERNS.

WITHIN EACH OF THE ABOVE GROUPS, NEGOTIATIONS WITH SUCH CONCERNS WILL BE IN THE ORDER OF THEIR BIDS ON THE NON-SET-ASIDE PORTION, BEGINNING WITH THE LOWEST RESPONSIVE BID. THE SET-ASIDE SHALL BE AWARDED AT THE HIGHEST UNIT PRICE AWARDED ON THE NON-SET-ASIDE PORTION, ADJUSTED TO REFLECT TRANSPORTATION AND OTHER COST FACTORS WHICH WERE CONSIDERED IN EVALUATING BIDS ON THE NON-SET-ASIDE PORTION. HOWEVER, THE GOVERNMENT RESERVES THE RIGHT NOT TO CONSIDER TOKEN BIDS OR OTHER DEVICES DESIGNED TO SECURE AN UNFAIR ADVANTAGE OVER OTHER BIDDERS ELIGIBLE FOR THE SET-ASIDE PORTION.

(B) DEFINITIONS

(1) A "LABOR SURPLUS AREA" IS A GEOGRAPHICAL AREA WHICH AT THE TIME OF AWARD IS---

(I) CLASSIFIED BY THE DEPARTMENT OF LABOR AS AN "AREA OF SUBSTANTIAL LABOR SURPLUS" OR AS AN ,AREA OF SUBSTANTIAL AND PERSISTENT LABOR SURPLUS" AND LISTED AS SUCH BY THAT DEPARTMENT IN CONJUNCTION WITH ITS BIMONTHLY PUBLICATION "AREA LABOR MARKET TRENDS; " OR

(II) NOT CLASSIFIED AS IN (I) ABOVE, BUT WHICH IS INDIVIDUALLY CERTIFIED AS AN AREA OF PERSISTENT OR SUBSTANTIAL LABOR SURPLUS BY THE DEPARTMENT OF LABOR AT THE REQUEST OF ANY PROSPECTIVE CONTRACTOR.

(2) LABOR SURPLUS AREA CONCERN INCLUDES---

(I) PERSISTENT LABOR SURPLUS AREA CONCERNS WHICH WILL PERFORM OR CAUSE TO BE PERFORMED ANY CONTRACTS AWARDED TO THEM AS LABOR SURPLUS AREA CONCERNS SUBSTANTIALLY IN "AREAS OF SUBSTANTIAL AND PERSISTENT LABOR SURPLUS; " AND

(II) SUBSTANTIAL LABOR SURPLUS AREA CONCERNS WHICH WILL PERFORM OR CAUSE TO BE PERFORMED ANY CONTRACTS AWARDED TO THEM AS LABOR SURPLUS AREA CONCERNS.

A CONCERN SHALL BE DEEMED TO PERFORM A CONTRACT SUBSTANTIALLY IN "AREAS OF SUBSTANTIAL AND PERSISTENT LABOR SURPLUS" IF THE COSTS THAT IT INCURS ON ACCOUNT OF MANUFACTURING OR PRODUCTION (BY ITSELF OR ITS SUBCONTRACTORS) IN SUCH AREAS AMOUNT TO MORE THAN 50 PERCENT OF THE CONTRACT PRICE. A CONCERN SHALL BE DEEMED TO PERFORM A CONTRACT SUBSTANTIALLY IN "AREAS OF SUBSTANTIAL LABOR SURPLUS" IF THE COSTS THAT IT INCURS ON ACCOUNT OF MANUFACTURING OR PRODUCTION (BY ITSELF OR ITS SUBCONTRACTORS) IN SUCH AREAS OR IN "AREAS OF SUBSTANTIAL OR PERSISTENT LABOR SURPLUS" AMOUNT TO MORE THAN 50 PERCENT OF THE CONTRACT PRICE. * *

FIVE BIDS ON THE NON-SET-ASIDE PORTION WERE RECEIVED, AND IT WAS DETERMINED THAT CANVAS SPECIALTY MANUFACTURING COMPANY, LOS ANGELES, CALIFORNIA, WAS THE LOW BIDDER. CONTRACT NO. N383/104-MIS) 80068A, IN THE AMOUNT OF $504,142.85 FOR THE NON-SET-ASIDE PORTION OF THE PROCUREMENT (LESS ITEM 1, WHICH WAS CANCELLED), WAS THEREFORE AWARDED TO THAT COMPANY ON DECEMBER 14, 1962.

WITH RESPECT TO THE SET-ASIDE PORTION OF THIS PROCUREMENT, PARAGRAPH 100- 1.22 PROVIDED AS FOLLOWS:

"100-1.22 MANUFACTURING LOCATION--- LABOR SURPLUS AREA CONCERNS

"BIDDER REPRESENTS THAT HE ( ( IS, ( ( IS NOT A LABOR SURPLUS AREA CONCERN.

"IF A BIDDER IS A LABOR SURPLUS AREA CONCERN AS DEFINED IN 1-801 OF THE ARMED SERVICES PROCUREMENT REGULATION, AND THUS IS ELIGIBLE FOR A PREFERENCE IN THE EVENT OF A LABOR SURPLUS SET-ASIDE, EQUAL LOW BIDS, OR A BUY AMERICAN DETERMINATION, SMALL BUSINESS CONCERN SIZE DETERMINATION, OR OTHER SUCH PREFERENCES THAT MAY BE DESIGNATED BY THE ARMED SERVICES PROCUREMENT REGULATION, THE FOLLOWING INFORMATION MUST BE SUBMITTED WITH THE BID.

"1. LOCATION OF PLANT AT WHICH THE SUPPLIES WILL BE MANUFACTURED.

"2. IF MORE THAN ONE PLANT IS INVOLVED (EITHER ITS OWN OR ITS SUBCONTRACTOR-S) STATE WHAT PERCENT OF THE CONTRACT PRICE IS REPRESENTED BY THE COSTS INCURRED ON ACCOUNT OF MANUFACTURING OR PRODUCTION OF THE SUPPLIES AT EACH PLANT:

CHART

AMOUNT OF COST OF PERCENT OF

NAME OF STREET CITY AND ITEM MANUFACTURING OF CONTRACT

PLANT ADDRESS STATE NO. QUANTITY PRODUCTION PRICE

FAILURE TO SUBMIT THE ABOVE INFORMATION WITH THE BID WILL PRECLUDE ANY CONSIDERATION AS A LABOR SURPLUS AREA CONCERN.

"THE BIDDER AGREES THAT, IF AWARDED A CONTRACT AS A LABOR SURPLUS AREA CONCERN, HE WILL PERFORM, OR CAUSE TO BE PERFORMED, THE CONTRACT REQUIREMENTS ALLOCATED TO THE LABOR SURPLUS AREAS DESIGNATED ABOVE IN THE AREAS AND AMOUNTS SO DESIGNATED. HOWEVER, IF AFTER BIDS HAVE BEEN OPENED BUT PRIOR TO THE TIME A CONTRACT IS AWARDED, THE DEPARTMENT OF LABOR CLASSIFICATION OF ANY SUCH AREA CHANGES, THE BIDDER MAY CHANGE THE AREAS IN WHICH HE PROPOSES TO PERFORM, PROVIDED THAT HE SO NOTIFIES THE CONTRACTING OFFICER PRIOR TO AWARD OF THE CONTRACT. ELIGIBILITY FOR AWARD OF A CONTRACT AS A LABOR SURPLUS AREA CONCERN WILL BE FINALLY DETERMINED AT THE TIME OF THE PROPOSED AWARD; HOWEVER, IN NO EVENT WILL A BIDDER WHO IS NOT A LABOR SURPLUS AREA CONCERN AT THE TIME OF OPENING (BASED ON INFORMATION FURNISHED ABOVE) BE ALLOWED TO THEREAFTER BECOME ELIGIBLE FOR AWARD AS A LABOR SURPLUS AREA CONCERN BASED ON INFORMATION FURNISHED AFTER OPENING OF BIDS.'

WITH RESPECT TO THE INFORMATION REQUESTED FROM BIDDERS UNDER PARAGRAPH 100-1.22, YOUR BID INDICATED ONLY THAT YOUR COMPANY WAS A LABOR SURPLUS AREA CONCERN. THIS WAS ACCOMPLISHED BY INSERTING "X" WITHIN THE PARENTHESES FOLLOWING THE WORD "HE" IN THE FIRST SENTENCE OF PARAGRAPH 100 -1.22. NO INFORMATION RELATIVE TO THE LOCATION OF YOUR PLANT OR THE LOCATIONS OF SUBCONTRACTORS' PLANTS WAS FURNISHED AS REQUESTED UNDER SUBPARAGRAPHS NUMBERED 1 AND 2 UNDER PARAGRAPH 100 1.22.

IN VIEW OF THE FAILURE OF YOUR BID TO INCLUDE THE INFORMATION REQUESTED BY PARAGRAPH 100-1.22, IT WAS DETERMINED BY THE CONTRACTING OFFICER THAT YOUR COMPANY SHOULD BE CONSIDERED AS A GROUP 5 CONCERN UNDER PARAGRAPH 101 -6.3 OF THE INVITATION, QUOTED ABOVE, RATHER THAN AS A LABOR SURPLUS AREA CONCERN. SINCE CANVAS SPECIALTY COMPANY IS FIRST IN LINE UNDER GROUP 5 FOR NEGOTIATION, AND THIS CONCERN HAS INDICATED ITS WILLINGNESS TO MATCH THE AWARD PRICES ON THE NON-SET ASIDE PORTION, THE CONTRACTING OFFICER'S DETERMINATION WILL, IF CORRECT, EFFECTIVELY PRECLUDE AN AWARD OF THE SET- ASIDE PORTION TO YOUR COMPANY.

YOUR PROTEST ADVISES THAT YOUR PLANT IS LOCATED IN HUNTINGTON, WEST VIRGINIA, WHICH IS A LABOR SURPLUS AREA; THAT SUCH ADDRESS WAS SHOWN ON THE FACE OF YOUR BID AND AS THE PLACE OF ORIGIN OF SHIPMENTS UNDER PARAGRAPH 104-2.1; THAT NO OTHER PLANT WOULD BE INVOLVED IN THE MANUFACTURE OF THE SUPPLIES; AND THAT YOUR FAILURE TO SHOW SUCH INFORMATION UNDER SUBPARAGRAPH 2 OF PARAGRAPH 100-1.22 OF THE INVITATION WAS DUE SOLELY TO CLERICAL ERROR. YOU CONTEND THAT FAILURE TO CONSIDER YOUR COMPANY AS A LABOR SURPLUS AREA CONCERN, FOR PURPOSES OF AWARDING THE SET-ASIDE PORTION OF THIS PROCUREMENT, WILL PENALIZE YOUR COMPANY FOR A CLERICAL ERROR AND WILL OPERATE TO DEFEAT THE PURPOSE OF THE SET-ASIDE. YOU THEREFORE ASK RECONSIDERATION OF THE DETERMINATION TO CLASSIFY YOUR COMPANY AS A GROUP 5 CONCERN.

THE PURPOSE TO BE SERVED BY THE INFORMATION REQUESTED FROM BIDDERS UNDER PARAGRAPH 100-1.22 APPEARS TO BE CLEARLY SET OUT UNDER PARAGRAPH 1-801.1 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) AS FOLLOWS:

"A CONCERN SHALL BE DEEMED TO PERFORM A CONTRACT SUBSTANTIALLY IN "AREAS OF SUBSTANTIAL AND PERSISTENT LABOR SURPLUS" IF THE COSTS THAT IT INCURS ON ACCOUNT OF MANUFACTURING OR PRODUCTION (BY ITSELF OR ITS SUBCONTRACTORS) IN SUCH AREAS AMOUNT TO MORE THAN 50 PERCENT OF THE CONTRACT PRICE. A CONCERN SHALL BE DEEMED TO PERFORM A CONTRACT SUBSTANTIALLY IN "AREAS OF SUBSTANTIAL LABOR SURPLUS" IF THE COSTS THAT IT INCURS ON ACCOUNT OF MANUFACTURING OR PRODUCTION (BY ITSELF OR ITS SUBCONTRACTORS) IN SUCH AREAS OR IN "AREAS OF SUBSTANTIAL OR PERSISTENT LABOR SURPLUS" AMOUNT TO MORE THAN 50 PERCENT OF THE CONTRACT PRICE.

EXAMPLE A. ABC COMPANY, MANUFACTURING IN A FULL EMPLOYMENT AREA, BIDS ON A CONTRACT AT $1,000. ABC COMPANY WILL INCUR THE FOLLOWING COSTS:

CHART

DIRECT LABOR --------------------------------------------------$200

OVERHEAD ------------------------------------------------------ 200

PURCHASE OF MATERIALS FROM XYZ, WHICH MANUFACTURES THE MATERIALS

IN A LABOR SURPLUS AREA -------------------------------------- 510

ABC COMPANY QUALIFIES AS A LABOR SURPLUS AREA CONCERN.

EXAMPLE B. DEF COMPANY, MANUFACTURING IN A LABOR SURPLUS AREA,

BIDS ON A CONTRACT AT $1,000. DEF COMPANY WILL INCUR THE

FOLLOWING COSTS:

DIRECT LABOR -------------------------------------------------- 200

OVERHEAD ------------------------------------------------------ 200

PURCHASE OF MATERIALS FROM UVW, WHICH IS LOCATED IN A LABOR

SURPLUS AREA BUT WHICH MERELY DISTRIBUTES THE MATERIALS FROM

STOCKS ON HAND (THE MATERIALS HAVING BEEN MANUFACTURED BY

UVW'S SUPPLIER) ----------------------------------------------- 550

DEF COMPANY DOES NOT QUALIFY AS A LABOR SURPLUS AREA CONCERN REGARDLESS OF WHETHER UVW'S SUPPLIER MANUFACTURES IN A LABOR SURPLUS AREA.

EXAMPLE C. GHI COMPANY, MANUFACTURING IN A LABOR SURPLUS AREA,BIDS ON A CONTRACT AT $1,000. GHI COMPANY WILL INCUR THE FOLLOWING COSTS:

DIRECT LABOR --------------------------------------------------$230

OVERHEAD ------------------------------------------------------ 275

PURCHASE OF MATERIALS FROM RST, WHICH MANUFACTURES THE

MATERIALS IN A FULL EMPLOYMENT AREA --------------------------- 425

GHI COMPANY QUALIFIES AS A LABOR SURPLUS AREA CONCERN.'

FROM THE ABOVE EXAMPLES, IT IS OBVIOUS THAT THE PLACE AT WHICH THE CONTRACTOR WILL ITSELF PERFORM MAY BE WHOLLY IMMATERIAL IF MORE THAN 50 PERCENT OF THE TOTAL COST OF PERFORMANCE WILL BE INCURRED FOR SUBCONTRACTING OR PURCHASE OF MATERIALS OR COMPONENTS. UNDER THE ASPR DEFINITION OF A LABOR SURPLUS AREA CONCERN WHICH WILL PERFORM (EITHER BY ITSELF OR OTHERS), SUBSTANTIALLY ALL THE WORK (MORE THAN 50 PERCENT OF THE CONTRACT PRICE) IN A DISTRESSED LABOR AREA, COSTS OF PERFORMANCE INCLUDE THE AMOUNTS INCURRED "IN MANUFACTURING OR PRODUCTION.' ONE OF THE COSTS OF ,PRODUCTION" IS THE COST OF PURCHASED MATERIALS AND THE EXAMPLES GIVEN IN ASPR RECOGNIZE THAT SUCH COSTS ALONE MAY BE SUFFICIENT TO QUALIFY A FIRM OR DISQUALIFY IT AS A SURPLUS AREA CONCERN. THE LOCATION OR LOCATIONS OF THE SOURCES OF SUCH MATERIALS OR COMPONENTS WILL, UNDER THE REGULATION, DETERMINE THE STATUS OF THE PRIME CONTRACTOR AS A LABOR SURPLUS AREA CONCERN. THEREFORE, WHILE IT MAY BE ASCERTAINED FROM THE INVITATION THAT A BIDDER WILL "PERFORM THE WORK" AT A CERTAIN PLANT (PLACE OF MANUFACTURE), THAT INFORMATION ALONE WILL NOT NECESSARILY RESOLVE THE QUESTION WHETHER MORE THAN 50 PERCENT OF THE TOTAL COSTS OF MANUFACTURE AND PRODUCTION WILL BE INCURRED IN THE AREA WHERE SUCH PLANT IS LOCATED.

IN THIS CONNECTION WE ARE ADVISED BY THE CONTRACTING AGENCY THAT THE DIRECT MATERIAL INVOLVED IN THE MANUFACTURE OF THESE LIFE PRESERVERS WHICH COULD REASONABLY BE EXPECTED TO BE PROCURED FROM FIRST TIER SUBCONTRACTORS WOULD APPROXIMATE 50 PERCENT OF THE CONTRACT PRICE. THE INFORMATION RELATIVE TO SUBCONTRACTORS AND SUBCONTRACT COSTS WHICH WAS REQUESTED BY PARAGRAPH 100-1.22 IS THEREFORE CLEARLY BOTH MATERIAL AND NECESSARY TO A DETERMINATION OF WHETHER YOUR COMPANY, OR ANY OTHER BIDDER, COULD PROPERLY BE CONSIDERED A SURPLUS AREA CONCERN FOR PURPOSES OF SET-ASIDE AWARD. THE RULE IS WELL ESTABLISHED IN ADVERTISED PROCUREMENTS THAT A BIDDER'S FAILURE TO SUPPLY INFORMATION, IN HIS BID, WHICH IS NECESSARY TO A FULL AND COMPLETE EVALUATION OF THE BID WILL RENDER THE BID NONRESPONSIVE TO THE INVITATION FOR BIDS. IT IS ALSO THE SETTLED RULE THAT WHERE SUCH MATERIAL INFORMATION IS OMITTED FROM A BID IT MAY NOT BE SUPPLIED AFTER BID OPENING. THE PROVISIONS OF PARAGRAPH 101-6.3 (A) OF THE INVITATION, WHICH LIMIT NEGOTIATIONS WITHIN EACH GROUP TO THOSE CONCERNS WHICH HAVE SUBMITTED RESPONSIVE BIDS, AND THE PROVISION IN PARAGRAPH 100-1.22 WHICH ADVISES BIDDERS THAT "FAILURE TO SUBMIT THE ABOVE INFORMATION WITH THE BID WILL PRECLUDE ANY CONSIDERATION AS A LABOR SURPLUS AREA CONCERN" ARE THEREFORE IN ACCORD WITH THE ESTABLISHED RULES.

IN OUR DECISION OF DECEMBER 21, 1961, B-147682, 41 COMP. GEN. 417, WE HAD REASON TO CONSIDER THE APPLICABILITY OF THESE RULES TO LABOR SURPLUS AREA SET-ASIDES AND CONCLUDED AS FOLLOWS:

"THE SET-ASIDE PORTION IS, OF COURSE, A NEGOTIATED PROCUREMENT AND, THEREFORE, IS NOT SUBJECT TO THE STRICT RULES GOVERNING PROCUREMENT BY FORMAL ADVERTISING. NEVERTHELESS, IT IS OUR POSITION THAT REQUIREMENTS FOR AND LIMITATIONS ON ELIGIBILITY FOR AWARD UNDER THE SET-ASIDE WHICH ARE STATED IN AN INVITATION SHOULD BE FOLLOWED IN THE AWARD OF THE SET-ASIDE PORTION. SEE 41 COMP. GEN. 160; 39 ID. 17.'

WHILE WHAT WAS SAID IN THAT CASE WOULD APPEAR TO BE EQUALLY APPLICABLE TO YOUR BID IN THE PRESENT PROCUREMENT, ONE OTHER MATTER APPEARS TO MERIT CONSIDERATION AND COMMENT.

PARAGRAPH 104.2.1 OF THE INVITATION, AS AMENDED ON SEPTEMBER 11, 1962, PROVIDES AS FOLLOWS WITH RESPECT TO ITEMS 1 (AX), 2 (AX), AND 3 (AX):

"104-2.1 PLACE OF DELIVERY: ORIGIN (ITEMS 1 (AX), 2 (AX) AND 3 (AX) (

(A) THE ARTICLES TO BE FURNISHED SHALL BE DELIVERED FREE OF EXPENSE TO THE GOVERNMENT AND, AT THE GOVERNMENT'S OPTION, (I) LOADED, BLOCKED, AND BRACED ON BOARD CARRIER'S EQUIPMENT, (II) AT THE FREIGHT STATION, OR (III) PLACED ON WHARF OF WATER CARRIER (WHERE MATERIAL WILL ORIGINATE WITHIN OR ADJACENT TO A PORT AREA AND IS ADAPTABLE TO WATER MOVEMENT), AT OR NEAR CONTRACTOR'S PLANT AT

(1)

(BIDDER INSERT CITY OR TOWN IN WHICH PLANT IS LOCATED),

(2)

(BIDDER INSERT EXACT LOCATION OF PRIVATE SIDING OR NEAREST RAIL TERMINAL FROM WHICH RAIL SHIPMENT WILL BE MADE, TOGETHER WITH THE NAME OF SERVING RAILROAD/S) (,

(3)

(BIDDER INSERT THE EXACT LOCATION FROM WHICH TRUCK SHIPMENTS WILL BE MADE, INCLUDING THE NAME OF THE STREET OR HIGHWAY), AND

(4)

(BIDDER INSERT THE PORT, OR THE SPECIFIC AREA WITHIN SUCH PORT, TO WHICH SUPPLIES WILL BE DELIVERED).

FOR SHIPMENT AT GOVERNMENT EXPENSE (NORMALLY ON GOVERNMENT BILL OF LADING) TO THE DESTINATIONS SPECIFIED HEREIN. * * *"

WITH RESPECT TO INSPECTION AND ACCEPTANCE, PARAGRAPH 105-1.1 PROVIDES AS FOLLOWS:

"105-1.1 INSPECTION AND ACCEPTANCE-INFORMATION TO BE FURNISHED BY BIDDER

THE INFORMATION REQUESTED IN THE INSPECTION AND ACCEPTANCE CLAUSE IS REQUIRED FOR BID EVALUATION PURPOSES, AND THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY BID WHICH DOES NOT INCLUDE SUCH INFORMATION.

(A) INSPECTION OF THE PROPERTIES OR SERVICES TO BE FURNISHED HEREUNDER SHALL BE MADE BY REPRESENTATIVES OF THE MATERIAL INSPECTION SERVICE, USN, AT THE CONTRACTOR'S OR SUBCONTRACTOR'S PLANT SPECIFIED IN SUBPARAGRAPH (4) BELOW. ACCEPTANCE OF SUCH SUPPLIES OR SERVICES SHALL BE MADE BY THE REPRESENTATIVE OF THE GOVERNMENT AT THE PLACE OF DELIVERY SPECIFIED IN THE NOTICE OF AWARD.

(B) THE BIDDER SHALL FURNISH THE FOLLOWING INFORMATION:

(1) ARE THE PROPERTIES TO BE FURNISHED FROM STOCK? FROM GOVERNMENT SURPLUS MATERIAL?

(2) NAME OF PRINCIPAL MANUFACTURER (NOT DEALER) OF THE PROPERTIES

(3) PLACE OF PRINCIPAL MANUFACTURE OF PROPERTIES OR PERFORMANCE OF SERVICES

(4) LOCATION OF ARTICLES TO BE INSPECTED"

CONTRARY TO THE ADVICE IN YOUR PROTEST THAT YOU INDICATED THE LOCATION OF YOUR PLANT FOR F.O.B. ORIGIN SHIPMENTS UNDER PARAGRAPH 104 2.1, OUR EXAMINATION OF YOUR BID SHOWS THAT YOU FAILED TO INSERT ANY OF THE INFORMATION REQUIRED UNDER SUBPARAGRAPHS 104-2.1 (A) (1) THROUGH (4). ADDITIONALLY, NO INFORMATION WAS SUPPLIED UNDER PARAGRAPH 105-1.1. SINCE THE FREIGHT COSTS WHICH MUST BE PAID BY THE GOVERNMENT ON F.O.B. ORIGIN SHIPMENTS ARE ESSENTIAL TO THE DETERMINATION OF EVALUATED BID PRICES, IT HAS BEEN CONSISTENTLY HELD THAT A BIDDER'S FAILURE TO SUBMIT PLACE OF ORIGIN INFORMATION RENDERS THE BID NONRESPONSIVE AND PRECLUDES ITS CONSIDERATION FOR AWARD. IN THE INSTANT PROCUREMENT IT WOULD THEREFORE APPEAR THAT YOUR BID WAS NEITHER RESPONSIVE TO THE INFORMATION REQUIRED FOR ITS EVALUATION ON THE NON-SET-ASIDE PORTION, NOR TO THE INFORMATION REQUIRED FOR A DETERMINATION OF YOUR ELIGIBILITY AS A LABOR SURPLUS AREA CONCERN.

UNDER THE CIRCUMSTANCES, WE MUST CONCLUDE THAT THE NATURE AND EXTENT OF THE INFORMATION WHICH HAS BEEN OMITTED FROM YOUR BID IS SUCH THAT ITS SUBMISSION AT THE PRESENT TIME, FOR THE SOLE PURPOSE OF CONSIDERING YOUR BID ON THE SET-ASIDE PORTION OF THIS PROCUREMENT, WOULD VIOLATE THE CONCEPT OF COMPETITIVE BIDDING. WE MUST THEREFORE AGREE WITH THE DETERMINATION BY THE CONTRACTING OFFICER, WHICH HAS BEEN CONCURRED IN BY THE BUREAU OF SUPPLIES AND ACCOUNTS, THAT YOUR COMPANY MAY NOT BE CONSIDERED AS A LABOR SURPLUS AREA CONCERN FOR THE PURPOSES OF THIS PROCUREMENT. ACCORDINGLY, YOUR PROTEST MUST BE DENIED.