B-150757, APR. 8, 1963

B-150757, APR. 8, 1963

TO APPLIED DESIGN COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 31, 1963, PROTESTING AGAINST THE ACTION TAKEN BY THE DEPARTMENT OF THE NAVY IN REJECTING YOUR BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 600-181-63 S, ISSUED BY THE BUREAU OF SHIPS.

THE INVITATION SOUGHT BIDS ON 75 METAL REUSABLE SHIPPING CONTAINERS AND, BY JOINT DETERMINATION OF THE CONTRACTING OFFICER AND A REPRESENTATIVE OF THE SMALL BUSINESS ADMINISTRATION THE PROCUREMENT IN ITS ENTIRETY WAS SET ASIDE FOR SMALL BUSINESS CONCERNS. ALL PROSPECTIVE BIDDERS WERE NOTIFIED IN THE INVITATION AS TO THAT RESTRICTION. THE RECORDS SHOW THAT YOU INDICATED ON YOUR BID THAT YOU WERE A SMALL BUSINESS FIRM AND THAT THE CONTAINERS WOULD BE FABRICATED BY THE WILLIAMSON COMPANY WHICH ALSO HAD BEEN CLASSIFIED AS SMALL BUSINESS.

AFTER OPENING OF THE BIDS BUT BEFORE AWARD THE CONTRACTING OFFICER REQUESTED THAT A PREAWARD SURVEY BE CONDUCTED OF THE WILLIAMSON COMPANY, WHICH DISCLOSED THAT THE SAID FIRM CURRENTLY EMPLOYED 650 PERSONS. VIEW THEREOF THE SMALL BUSINESS ADMINISTRATION WAS ASKED WHETHER THE SUBJECT COMPANY WAS CONSIDERED TO BE A SMALL BUSINESS CONCERN, AND IN RESPONSE ADVISED THE CONTRACTING OFFICER THAT THE WILLIAMSON COMPANY OF MADISON, INDIANA, WAS A BRANCH PLANT OF THE WILLIAMSON COMPANY OF CINCINNATI, OHIO, AND THAT WILLIAMSON COMPANY DOES NOT QUALIFY AS A SMALL BUSINESS CONCERN FOR THE PURPOSES OF IFB 600-181-63-S. IN VIEW OF THAT DETERMINATION BY SBA YOUR BID WAS REJECTED AND AWARD MADE TO THE GLASGOW COMPANY AS THE LOW CONFORMING BIDDER.

YOU CONTEND THAT THE PURPOSE OF THE GOVERNMENT IN ESTABLISHING THE DATE OF AWARD AS THE CRITERION FOR DETERMINING THE BUSINESS CATEGORY OF A COMPANY WAS TO CONSIDER ANY OVERT ACTION OF A BIDDER WHEREBY, SUBSEQUENT TO THE OPENING DATE BUT BEFORE AWARD, IT MIGHT DISQUALIFY ITSELF AS A SMALL BUSINESS FIRM. YOU STATE THAT SINCE NO ACTION BY THE WILLIAMSON COMPANY CAUSED ITS RECLASSIFICATION, THE AWARD SHOULD HAVE BEEN MADE TO YOU. YOU FURTHER CONTEND THAT, IN THE ABSENCE OF AN AWARD TO YOU, THE PROCUREMENT SHOULD BE READVERTISED WITHOUT ANY SMALL BUSINESS SET-ASIDE FOR THE SEVERAL REASONS ITEMIZED IN YOUR LETTER OF PROTEST.

THE DUTY AND AUTHORITY TO CONDUCT NEGOTIATIONS RELATING TO PROPOSED PROCUREMENTS, INCLUDING THE FIXING OF THE DATE UPON WHICH AN AWARD OF A CONTRACT IS TO BE MADE IS FOR DETERMINATION BY THE PURCHASING AGENCY. THEREFORE, THE WITHHOLDING OF AN AWARD PENDING A DETERMINATION AS TO YOUR STATUS IN THIS CASE APPEARS TO BE A PROPER EXERCISE OF THAT AUTHORITY.

THE FACT THAT YOUR DISQUALIFICATION WAS NOT THE RESULT OF ANY AFFIRMATIVE ACTION ON YOUR PART IS IMMATERIAL IN VIEW OF THE PROVISIONS OF THE APPLICABLE STATUTES. UNDER 15 U.S.C. 637 (B) (6), SBA IS AUTHORIZED TO DETERMINE WITHIN ANY INDUSTRY THE CONCERNS WHICH ARE TO BE DESIGNATED ,SMALL-BUSINESS CONCERNS" ENTITLED TO PREFERENCE IN GOVERNMENT PROCUREMENT, AND WHEN SUCH DETERMINATION IS MADE IT IS CONCLUSIVE UPON THE PROCUREMENT AGENCY. THE LAW DOES NOT CONCERN ITSELF WITH THE REASONS FOR SUCH DESIGNATIONS OR REDESIGNATIONS. NEITHER OUR OFFICE NOR ANY EXECUTIVE AGENCY OF THE GOVERNMENT MAY IGNORE A DETERMINATION BY SBA AS TO THE SIZE STATUS OF A PARTICULAR CONCERN BIDDING UNDER A WHOLLY SET-ASIDE ADVERTISED PROCUREMENT. IN VIEW THEREOF THE CONTRACTING OFFICER WAS PRECLUDED BY LAW FROM MAKING AN AWARD TO YOUR CONCERN UNDER THE INVITATION.

WITH RESPECT TO OUR CONTENTION THAT THE PROCUREMENT SHOULD BE READVERTISED, YOU ARE ADVISED THAT THIS OFFICE HAS FOLLOWED THE POLICY THAT THE CANCELLATION OF AN INVITATION, AFTER THE INTERESTED BIDDERS' PRICES HAVE BEEN DISCLOSED, SHOULD BE DONE ONLY FOR THE MOST COGENT REASONS. THE FACT THAT A READVERTISEMENT MIGHT GENERATE MORE COMPETITION OR THAT THE EQUIPMENT MIGHT BE OBTAINED AT A LESSER PRICE IS NOT ORDINARILY CONSIDERED A VALID REASON. YOUR REMAINING CONTENTIONS AFFORD NO LEGAL BASIS FOR CONSIDERING THE QUESTION AS TO WHETHER THE PROCUREMENT SHOULD BE READVERTISED.

IN VIEW OF THE FOREGOING, AND SINCE THE AWARD OF THIS CONTRACT WAS IN ACCORDANCE WITH THE LAW AND APPLICABLE REGULATIONS YOUR PROTEST MUST BE DENIED.