B-151400, SEP. 9, 1963

B-151400: Sep 9, 1963

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TO THE FWD CORPORATION: FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 24. NO BID WILL BE CONSIDERED EXCEPT FROM A RECOGNIZED MANUFACTURER OF SNOW PLOWS WHO SHALL HAVE FABRICATED OR ASSEMBLED SNOW PLOWS FOR A PERIOD OF NOT LESS THAN FIVE (5) YEARS PRECEDING THE DATE OF BID. THAT THE SNOW PLOWS HAVE BEEN IN SUCCESSFUL OPERATION IN THE UNITED STATES FOR A PERIOD OF NOT LESS THAN 6 MONTHS PRIOR TO THE DATE OF BID. WHO DO NOT FABRICATE OR ASSEMBLE THE CARRIER CHASSIS SHALL CERTIFY TO THE CONTRACTING OFFICER THAT THE TRUCK CHASSIS ON WHICH THE SNOW PLOW IS TO BE MOUNTED WILL BE A CURRENT STANDARD CHASSIS MODEL PRODUCED BY A RECOGNIZED MOTOR TRUCK MANUFACTURER HAVING SERVICE AND PARTS DISTRIBUTION FACILITIES IN ALL STATES AND TERRITORIES OF THE UNITED STATES.'.

B-151400, SEP. 9, 1963

TO THE FWD CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 24, 1963, ACKNOWLEDGED ON MAY 6, WHEREIN YOU PROTEST THE AWARD OF ANY CONTRACT UNDER INVITATION FOR BIDS NO. ENG-11-184-63-C-388-JD, DATED MARCH 22, 1963, ISSUED BY THE ARMY PROCUREMENT OFFICE, CHICAGO, ILLINOIS. IN YOUR LETTER, YOU REFER TO PARAGRAPH 4, ON PAGE 3, OF THE INVITATION, WHICH READS AS FOLLOWS:

"BIDDER QUALIFICATION. NO BID WILL BE CONSIDERED EXCEPT FROM A RECOGNIZED MANUFACTURER OF SNOW PLOWS WHO SHALL HAVE FABRICATED OR ASSEMBLED SNOW PLOWS FOR A PERIOD OF NOT LESS THAN FIVE (5) YEARS PRECEDING THE DATE OF BID. BIDDERS SHALL FURNISH WITH BID, SATISFACTORY EVIDENCE THAT HE HAS MANUFACTURED SNOW PLOWS OF THE GENERAL TYPE AND CAPACITY REQUIRED BY THE SPECIFICATION ACCOMPANYING THIS INVITATION, THAT THE SNOW PLOWS HAVE BEEN IN SUCCESSFUL OPERATION IN THE UNITED STATES FOR A PERIOD OF NOT LESS THAN 6 MONTHS PRIOR TO THE DATE OF BID. MANUFACTURERS OF SNOW PLOWS WHO QUALIFY UNDER THE AFOREMENTIONED CONDITIONS, BUT WHO DO NOT FABRICATE OR ASSEMBLE THE CARRIER CHASSIS SHALL CERTIFY TO THE CONTRACTING OFFICER THAT THE TRUCK CHASSIS ON WHICH THE SNOW PLOW IS TO BE MOUNTED WILL BE A CURRENT STANDARD CHASSIS MODEL PRODUCED BY A RECOGNIZED MOTOR TRUCK MANUFACTURER HAVING SERVICE AND PARTS DISTRIBUTION FACILITIES IN ALL STATES AND TERRITORIES OF THE UNITED STATES.'

WITH RESPECT TO THIS PROVISION, YOU COMMENT AS FOLLOWS:

"THIS PARAGRAPH CLEARLY STATES THAT THE BIDDER MUST BE THE MANUFACTURER OF THE V BLADE SNOW PLOW. THE TRUCK CHASSIS CAN EITHER BE MANUFACTURED BY THE BIDDER OR PROCURED FROM A RECOGNIZED MOTOR TRUCK MANUFACTURER.

"SINCE THE COST OF THE V BLADE SNOW PLOW REPRESENTS LESS THAN 10 PERCENT OF THE SELLING PRICE OF THE END ITEM, IT APPEARS THAT THERE IS NO VALID REASON FOR STIPULATING THAT THE BIDDER BE THE MANUFACTURER OF THE SNOW PLOW. THE CHASSIS MANUFACTURER IS THEREFORE BETTER SUITED TO HANDLE THE PRIME CONTRACT.

"THE SUBJECT IFB IS A PROCUREMENT, SET-ASIDE FOR SMALL BUSINESS. THERE ARE SIX RECOGNIZED MANUFACTURERS OF DISPLACEMENT TYPE SNOW PLOWS, AND WE OFFERED CHASSIS QUOTATIONS TO THEM. OF THE SIX, THREE (3) SMALL BUSINESS FIRMS STATED THAT THEY DID NOT INTEND TO BID AS PRIME; TWO (2) FIRMS STATED THEY ARE CLASSIFIED AS "BIG BUSINESS" AND ARE NOT ELIGIBLE TO BID; AND ONE (1) STATED IT HAD NOT RECEIVED THE IFB. * * *

"WALTER MOTOR TRUCK COMPANY, VOORHEESVILLE, NEW YORK, AND OSHKOSH MOTOR TRUCK COMPANY, OSHKOSH, WISCONSIN, WERE THE ONLY CONCERNS THAT SUBMITTED BIDS ON THE SUBJECT IFB ON APRIL 22, 1963. BOTH OF THESE SMALL BUSINESS CONCERNS MANUFACTURE THE SNOW PLOW CHASSIS ONLY, AND DO NOT MANUFACTURE THE SNOW PLOW ITSELF. THEREFORE, BOTH COMPANIES ARE NON-RESPONSIVE IN ACCORDANCE WITH THE PARAGRAPH 4, PAGE 3 OF THE SUBJECT IFB, ENTITLED "BIDDER QUALIFICATIONS.'

"IN THE SIZE RANGE OF TRUCK CHASSIS TO BE PROCURED, UNDER SUBJECT IFB, A HISTORICAL REVIEW SHOWS THAT ONLY THREE COMPANIES NORMALLY COMPETE. THEY ARE WALTER, OSHKOSH AND FWD. EACH TIME THAT A PROCUREMENT OF THIS NATURE IS SET-ASIDE FOR SMALL BUSINESS, A REDUCTION IN COMPETITION RESULTS, SINCE FWD IS CLASSIFIED AS A LARGE BUSINESS CONCERN.'

YOU THEN CONCLUDE BY CONTENDING:

"1. BIDS RECEIVED FROM WALTERS AND OSHKOSH ARE NONRESPONSIVE SINCE THEY DO NOT MEET THE REQUIREMENTS OF PARAGRAPH 4, PAGE 3 OF THE IFB ENTITLED "BIDDER QUALIFICATION.'

"2. THE "BIDDER QUALIFICATION" PARAGRAPH IS NOT APPROPRIATE FOR THE SUBJECT IFB, SINCE THE SNOW PLOW INDUSTRY ELECTS NOT TO BID.

"3. THE SMALL BUSINESS SET-ASIDE RESTRICTS COMPETITION.'

PARAGRAPH 1-706.5 OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDES FOR THE SET-ASIDE OF THE ENTIRE AMOUNT OF A PROCUREMENT FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION WHERE THERE IS A REASONABLE EXPECTATION THAT BIDS WILL BE OBTAINED FROM A SUFFICIENT NUMBER OF RESPONSIBLE SMALL BUSINESS CONCERNS SO THAT AN AWARD WILL BE MADE AT REASONABLE PRICES.

AN EXAMINATION OF THE RECORD NOW BEFORE OUR OFFICE INDICATES THAT THE SUBJECT INVITATION WAS MAILED TO 45 BIDDERS. THE RECORD ALSO CONTAINS A LIST OF EIGHT SMALL BUSINESS COMPANIES WHICH HAVE HAD CONTRACTS FOR SNOW PLOWS DURING RECENT YEARS; AND IT WAS THIS INFORMATION WHICH WAS USED BY THE CONTRACTING OFFICER AND THE SMALL BUSINESS ADMINISTRATION REPRESENTATIVE TO MAKE A JOINT DETERMINATION THAT THIS PROCUREMENT WOULD BE A SMALL BUSINESS SET-ASIDE. FURTHERMORE, THE RECORD INDICATES THAT JUDGING FROM THE NUMBER OF AWARDS TO DIFFERENT COMPANIES DURING RECENT YEARS, IT WAS OBVIOUS THAT THIS SET-ASIDE AFFORDED A REASONABLE EXPECTATION OF RECEIVING A SUFFICIENT NUMBER OF BIDS TO MAKE AN AWARD AT A REASONABLE PRICE. THEREFORE, IN RESPONSE TO YOUR CONTENTION THAT THE SMALL BUSINESS SET-ASIDE RESTRICTS COMPETITION, IT MAY BE ADMITTED THAT WHILE SUCH SET-ASIDE RESTRICTS BIDDING TO THE FIELD OF SMALL BUSINESS ONLY, THE RECORD INDICATES THAT IN THE INSTANT CASE IT DID NOT PRECLUDE COMPETITION AS SHOWN HEREIN, AND AS ESTABLISHED BY PROCUREMENT FROM SMALL BUSINESS IN THE PAST, EVEN WHERE SET-ASIDES WERE NOT MADE.

IT APPEARS ALSO THAT YOU CONSTRUE THE ABOVE-MENTIONED "BIDDER QUALIFICATION" PARAGRAPH AS DEFINING ELIGIBLE BIDDERS TO BE ONLY THOSE FIRMS WHO MANUFACTURE THE SNOW PLOW BLADE. HOWEVER, IT IS NOTED THAT THE FIRST SENTENCE OF THAT PROVISION RECITES THAT BIDS WILL BE CONSIDERED FROM RECOGNIZED MANUFACTURERS WHO HAVE FABRICATED OR ASSEMBLED SNOW PLOWS. THE DESCRIPTION OF ITEM NO. 1 IN THE INVITATION INCLUDES THE TERM "SNOW PLOW" AS THE PRIMARY NAME FOR THE END ITEM, AND INDICATES THAT IT IS TO BE A V BLADE MOUNTED ON A TRUCK WITH A CERTAIN TYPE ENGINE AND OTHER CHARACTERISTICS. ACCORDINGLY, WE CONCLUDE THAT FIRMS WHICH EITHER FABRICATE OR ASSEMBLE THE ENTIRE MOUNTED SNOWPLOW WOULD BE ELIGIBLE, WHETHER THEY MANUFACTURE OR ASSEMBLE THE TRUCK CHASSIS, OR THE SNOW PLOW BLADE, OR BOTH.

WITH RESPECT TO THE TIME REQUIREMENTS COVERING THE EXPERIENCE QUALIFICATIONS CONTAINED IN THE AFOREMENTIONED PARAGRAPH, THE ADMINISTRATIVE OFFICIALS ADVISE THAT SINCE SUCH REQUIREMENT HAS LITTLE RELATIONSHIP IN DETERMINING THE RESPONSIBILITY OF A BIDDER TO PERFORM A CONTRACT, SUCH REQUIREMENT WILL BE DELETED FROM INVITATIONS COVERING FUTURE PROCUREMENTS OF SIMILAR ITEMS, EXCEPT WHEN JUSTIFIED UNDER UNUSUAL CONDITIONS.

BASED UPON THE FOREGOING, IT MUST BE CONCLUDED THAT YOUR PROTEST FURNISHES NO PROPER BASIS ON WHICH WE WOULD BE JUSTIFIED IN HOLDING THAT THE ADMINISTRATIVE ACTION WAS ILLEGAL OR IMPROPER.