B-151013, APR. 16, 1963

B-151013: Apr 16, 1963

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TO PARK CONSTRUCTION COMPANY: WE HAVE YOUR LETTERS OF MARCH 9. WE HAVE BEEN ADVISED THAT THE CONTRACT WAS AWARDED TO WILLIAM J. YOU HAVE PROTESTED THE AWARD ON THE BASIS. SINCE UNDER THE TERMS OF THE RFP ONLY SMALL BUSINESS FIRMS WERE ELIGIBLE FOR AWARD. YOU CONTEND GRAHAM SHOULD NOT HAVE RECEIVED THE CONTRACT. NASA HEADQUARTERS WAS ADVISED OF A DETERMINATION BY THE ATLANTA OFFICE OF THE SMALL BUSINESS ADMINISTRATION TO THE EFFECT THAT GRAHAM HAD BEEN DETERMINED TO HAVE. A TOTAL COMBINED AVERAGE EMPLOYMENT FOR THE PRECEDING FOUR CALENDAR QUARTERS OF LESS THAN 500 PERSONS AND THEREFORE WAS ELIGIBLE TO SELF-CERTIFY AS A SMALL BUSINESS. WE HAVE BEEN FURTHER ADVISED BY THE WASHINGTON OFFICE OF THE SMALL BUSINESS ADMINISTRATION THAT THE REFERENCED DETERMINATION AS TO GRAHAM'S SIZE WAS MADE AFTER CONSIDERATION OF THE ALLEGATIONS AND OTHER INFORMATION CONTAINED IN YOUR LETTERS ON THE MATTER.

B-151013, APR. 16, 1963

TO PARK CONSTRUCTION COMPANY:

WE HAVE YOUR LETTERS OF MARCH 9, 13 AND 21, AND APRIL 3, 1963, PROTESTING AGAINST THE AWARD OF A CONTRACT BY THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION TO ANOTHER FIRM PURSUANT TO REQUEST FOR PROPOSAL NO. MSC 63 -349Q.

THE REQUEST FOR PROPOSAL (RFP) COVERED THE OPERATION AND MAINTENANCE OF CERTAIN FACILITIES IN HOUSTON, TEXAS, LEASED BY THE MANNED SPACECRAFT CENTER. WE HAVE BEEN ADVISED THAT THE CONTRACT WAS AWARDED TO WILLIAM J. GRAHAM, ON OR ABOUT MARCH 28, 1963, CONSISTENT WITH THE TERMS OF THE RFP, ON A COST-PLUS-A-FIXED-FEE BASIS.

YOU HAVE PROTESTED THE AWARD ON THE BASIS, FIRST, THAT WILLIAM J. GRAHAM, BECAUSE OF AFFILIATIONS WITH OTHER FIRMS, DOES NOT QUALIFY AS A SMALL BUSINESS AND, SINCE UNDER THE TERMS OF THE RFP ONLY SMALL BUSINESS FIRMS WERE ELIGIBLE FOR AWARD, YOU CONTEND GRAHAM SHOULD NOT HAVE RECEIVED THE CONTRACT. BY TELEGRAM OF MARCH 27, 1963, NASA HEADQUARTERS WAS ADVISED OF A DETERMINATION BY THE ATLANTA OFFICE OF THE SMALL BUSINESS ADMINISTRATION TO THE EFFECT THAT GRAHAM HAD BEEN DETERMINED TO HAVE, WITH ALL AFFILIATED CONCERNS, A TOTAL COMBINED AVERAGE EMPLOYMENT FOR THE PRECEDING FOUR CALENDAR QUARTERS OF LESS THAN 500 PERSONS AND THEREFORE WAS ELIGIBLE TO SELF-CERTIFY AS A SMALL BUSINESS. WE HAVE BEEN FURTHER ADVISED BY THE WASHINGTON OFFICE OF THE SMALL BUSINESS ADMINISTRATION THAT THE REFERENCED DETERMINATION AS TO GRAHAM'S SIZE WAS MADE AFTER CONSIDERATION OF THE ALLEGATIONS AND OTHER INFORMATION CONTAINED IN YOUR LETTERS ON THE MATTER.

UNDER THE TERMS OF THE SMALL BUSINESS ACT, AS AMENDED, 15 U.S.C. 637 (B) (6), THE SMALL BUSINESS ADMINISTRATION IS EMPOWERED TO DETERMINE WHICH FIRMS WITHIN ANY INDUSTRY ARE TO BE DESIGNATED AS SMALL BUSINESS CONCERNS FOR PURPOSES OF GOVERNMENT PROCUREMENT AND SUCH DETERMINATIONS ARE CONCLUSIVE UPON THE PROCUREMENT OFFICERS OF THE GOVERNMENT. WE HAVE CONSISTENTLY TAKEN THE POSITION THAT WE HAVE NO AUTHORITY TO QUESTION THE SIZE DETERMINATIONS OF THE SMALL BUSINESS ADMINISTRATION EXCEPT UPON CLEAR AND CONVINCING PROOF THAT THE FINDING IS ARBITRARY OR CLEARLY ERRONEOUS. B-147020, NOVEMBER 17, 1961. SEE ALSO 37 COMP. GEN. 679 AND 35 COMP. GEN. 233. NO EVIDENCE TO SUPPORT SUCH A DETERMINATION HAS BEEN SUBMITTED IN THIS CASE.

THE SECOND BASIS PRESENTED BY YOU AGAINST THE PROPRIETY OF AWARD TO GRAHAM IS THAT GRAHAM HAS HAD LABOR PROBLEMS IN THE PAST AND WOULD NOT BE ABLE TO OBTAIN THE LABOR REQUIRED TO SATISFACTORILY PERFORM UNDER THE INSTANT CONTRACT. THIS MATTER GOES TO THE QUESTION OF THE FIRM'S RESPONSIBILITY WHICH IS PRIMARILY FOR DETERMINATION BY THE CONTRACTING AGENCY. IN THIS INSTANCE WE HAVE BEEN ADVISED THAT THE CONTRACTING OFFICER HAS INVESTIGATED AND IS SATISFIED THAT GRAHAM WILL BE ABLE TO FURNISH LABOR NECESSARY TO SATISFACTORILY CARRY OUT THE TERMS OF THE CONTRACT. IN VIEW OF SUCH DETERMINATION AND THE AUTHORITY OF THE CONTRACTING AGENCY WITH RESPECT TO SUCH MATTERS, WE FIND NO LEGAL REASON FOR QUESTIONING THE PROPRIETY OF THE AWARD ON THAT BASIS.

YOU CONTEND ALSO THAT GRAHAM WAS PERMITTED TO INCREASE HIS PRICE IN THE COURSE OF NEGOTIATIONS TO INCLUDE ITEMS ORIGINALLY EXCLUDED FROM THE PROPOSAL. THE CONTRACT WAS AWARDED PURSUANT TO NEGOTIATION. THE TERM "NEGOTIATION" IMPLIES A SERIES OF OFFERS AND COUNTEROFFERS UNTIL A MUTUALLY SATISFACTORY AGREEMENT IS CONCLUDED BY PARTIES. THE FACT THAT GRAHAM MAY HAVE BEEN PERMITTED TO AMEND HIS PROPOSAL IN THE COURSE OF NEGOTIATIONS WOULD NOT INVALIDATE THE RESULTING CONTRACT.

YOU ALSO STATE THAT THE EVALUATION BOARD, WHICH ULTIMATELY RECOMMENDED THAT AWARD BE MADE TO GRAHAM, INITIALLY RATED YOU AS FIRST CHOICE AND YOU SUGGEST THAT INFLUENCE WAS EXERTED SUBSEQUENTLY TO CHANGE THE MINDS OF THE EVALUATION BOARD. WE HAVE BEEN ADVISED THAT BECAUSE OF THE NUMBER OF PROPOSALS INITIALLY RECEIVED (20) THE EVALUATION BOARD FIRST REVIEWED THE PROPOSALS TO ELIMINATE THOSE WHICH COULD NOT POSSIBLY BE IN CONTENTION FOR THE AWARD. BOTH YOUR FIRM AND GRAHAM WERE INCLUDED IN THE GROUP WHICH PASSED THAT ELIMINATION TEST. THE NEXT STEP PERFORMED BY THE EVALUATION BOARD WAS TO LIST THE FIRMS REMAINING IN CONTENTION IN AN ORDER OF PREFERENCE. THE GRAHAM FIRM WAS LISTED FIRST AND YOUR FIRM WAS NINTH. THERE IS NO INDICATION THAT EITHER GRAHAM'S POSITION OR YOURS WAS SUBSTANTIALLY CHANGED IN THE COURSE OF THE EVALUATION BOARD'S CONSIDERATIONS, NOR HAVE WE BEEN ABLE TO FIND ANY EVIDENCE OF UNDUE INFLUENCE EXERTED ON THE BOARD.

FINALLY, YOU OBJECT TO THE AWARD HAVING BEEN MADE TO GRAHAM WHILE YOUR PROTEST WAS PENDING. THIS AWARD WAS MADE PURSUANT TO THE AUTHORITY CONTAINED AT 10 U.S.C. 2304 (10). THERE IS NO PROVISION OF LAW REQUIRING THAT CONTRACTS TO BE AWARDED PURSUANT TO SUCH AUTHORITY BE HELD IN ABEYANCE PENDING OUR DISPOSITION OF A PROTEST. IN ADDITION THERE IS NO REQUIREMENT IN THE NASA PROCUREMENT REGULATIONS FOR WITHHOLDING A NEGOTIATED AWARD PENDING OUR DISPOSITION OF A PROTEST. ALTHOUGH WE FEEL THAT THE INTERESTS OF THE GOVERNMENT MAY IN A GIVEN SITUATION BEST BE SERVED BY WITHHOLDING AWARD PENDING OUR DECISION AND WE HAVE ON OCCASION SUGGESTED THAT COURSE OF ACTION, WE DO NOT FEEL AS A MATTER OF POLICY THAT WE ARE JUSTIFIED IN REQUIRING A CONTRACTING AGENCY TO HOLD UP AWARD OF A NEGOTIATED CONTRACT UNTIL WE HAVE DECIDED ON THE VALIDITY OF THE PROPOSED ACTION, SINCE IN MANY INSTANCES SUCH DELAY MIGHT ADVERSELY EFFECT THE OPERATIONS OF THE AGENCY TO THE GOVERNMENT'S SUBSTANTIAL DETRIMENT.

IN ACCORDANCE WITH THE FOREGOING WE MUST CONCLUDE THERE HAS BEEN PRESENTED NO BASIS ON WHICH WE MAY QUESTION THE VALIDITY OF THE AWARD TO WILLIAM J. GRAHAM.