B-151448, JUL. 22, 1963

B-151448: Jul 22, 1963

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TO THE SECRETARY OF THE AIR FORCE: WE HAVE A LETTER DATED JUNE 20. THE SUBJECT INVITATION WAS ISSUED ON JANUARY 21. THE PROCUREMENT WAS SET ASIDE 100 PERCENT FOR SMALL BUSINESS PARTICIPATION UNDER THE FOLLOWING PROVISIONS OF THE INVITATION: "NOTICE OF TOTAL SMALL BUSINESS SET-ASIDE (OCT. 1962) "/A)RESTRICTION. BIDS OR PROPOSALS UNDER THIS PROCUREMENT ARE SOLICITED FROM SMALL BUSINESS CONCERNS ONLY AND THIS PROCUREMENT IS TO BE AWARDED ONLY TO ONE OR MORE SMALL BUSINESS CONCERNS. THIS ACTION IS BASED ON A DETERMINATION BY THE CONTRACTING OFFICER. THAT IT IS IN THE INTEREST OF MAINTAINING OR MOBILIZING THE NATION'S FULL PRODUCTIVE CAPACITY. OR IN THE INTEREST OF ASSURING THAT A FAIR PROPORTION OF GOVERNMENT PROCUREMENT IS PLACED WITH SMALL BUSINESS CONCERNS.

B-151448, JUL. 22, 1963

TO THE SECRETARY OF THE AIR FORCE:

WE HAVE A LETTER DATED JUNE 20, 1963, FROM THE CHIEF, PROCUREMENT OPERATIONS DIVISION, DIRECTORATE, PROCUREMENT POLICY, DCS/S AND L, SUBMITTING A REPORT AND DOCUMENTS CONCERNING A PROTEST FILED WITH OUR OFFICE BY CUBIC CORPORATION, SAN DIEGO, CALIFORNIA, AGAINST AWARD OF A CONTRACT TO ANY BIDDER OTHER THAN ITSELF UNDER INVITATION FOR BIDS NO. 42- 600-63-355 ISSUED BY HEADQUARTERS, OGDEN AIR MATERIEL AREA (OOAMA), DIRECTORATE OF PROCUREMENT AND PRODUCTION.

THE SUBJECT INVITATION WAS ISSUED ON JANUARY 21, 1963, AND CALLED FOR BIDS ON 71 EACH MATTS TRANSMITTER GROUP IN ACCORDANCE WITH MIL-T 9801A, FEDERAL SUPPLY CLASS 6920. THE PROCUREMENT WAS SET ASIDE 100 PERCENT FOR SMALL BUSINESS PARTICIPATION UNDER THE FOLLOWING PROVISIONS OF THE INVITATION:

"NOTICE OF TOTAL SMALL BUSINESS SET-ASIDE (OCT. 1962)

"/A)RESTRICTION. BIDS OR PROPOSALS UNDER THIS PROCUREMENT ARE SOLICITED FROM SMALL BUSINESS CONCERNS ONLY AND THIS PROCUREMENT IS TO BE AWARDED ONLY TO ONE OR MORE SMALL BUSINESS CONCERNS. THIS ACTION IS BASED ON A DETERMINATION BY THE CONTRACTING OFFICER, ALONE OR IN CONJUNCTION WITH A REPRESENTATIVE OF THE SMALL BUSINESS ADMINISTRATION, THAT IT IS IN THE INTEREST OF MAINTAINING OR MOBILIZING THE NATION'S FULL PRODUCTIVE CAPACITY, IN THE INTEREST OF WAR OR NATIONAL DEFENSE PROGRAMS, OR IN THE INTEREST OF ASSURING THAT A FAIR PROPORTION OF GOVERNMENT PROCUREMENT IS PLACED WITH SMALL BUSINESS CONCERNS. BIDS OR PROPOSALS RECEIVED FROM FIRMS WHICH ARE NOT SMALL BUSINESS CONCERNS SHALL BE CONSIDERED NONRESPONSIVE AND SHALL BE REJECTED.

"/B) DEFINITIONS. A "SMALL BUSINESS CONCERN" IS A CONCERN THAT (I) IS CERTIFIED AS A SMALL BUSINESS CONCERN BY THE SMALL BUSINESS ADMINISTRATION, OR (II) IS INDEPENDENTLY OWNED AND OPERATED, IS NOT DOMINANT IN THE FIELD OF OPERATION IN WHICH IT IS BIDDING ON GOVERNMENT CONTRACTS AND, WITH ITS AFFILIATES, EMPLOYS NOR MORE THAN 500 EMPLOYEES. IN ADDITION TO MEETING THESE CRITERIA, A MANUFACTURER OR REGULAR DEALER SUBMITTING BIDS OR PROPOSALS IN HIS OWN NAME MUST AGREE TO FURNISH IN THE PERFORMANCE OF THE CONTRACT END ITEMS MANUFACTURED OR PRODUCED IN THE UNITED STATES, ITS POSSESSIONS, OR PUERTO RICO, BY SMALL BUSINESS CONCERNS; PROVIDED, THAT THIS ADDITIONAL REQUIREMENT DOES NOT APPLY IN CONNECTION WITH CONSTRUCTION OR SERVICE CONTRACTS.

"/C) THIS PROCUREMENT APPLIES TO THE DEFINITION AS SHOWN UNDER NOTE 10 PARAGRAPH B (1) (I).'

NOTE 10 APPEARING ON PAGE 2 OF THE INVITATION SETS UP AN ORDER OF PRIORITIES AMONG THE VARIOUS INVITATION PROVISIONS IN CASE OF POSSIBLE INCONSISTENCIES BETWEEN THESE PROVISIONS. HOWEVER, ON PAGE 3 OF THE INVITATION APPEARS NOTE 15 WHICH, IN EFFECT, AMENDS CONDITION 10 OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS AND IT IS READILY APPARENT THAT IT IS NOTE 15 TO WHICH SUBPARAGRAPH (C) OF THE NOTICE, QUOTED ABOVE, REFERS. THE PERTINENT PROVISIONS OF SUBPARAGRAPH (B) OF CONDITION 10 AS AMENDED BY NOTE 15, PROVIDE AS FOLLOWS:

"/B) SPECIAL INDUSTRY DEFINITION. UNLESS CERTIFIED AS SMALL BUSINESS CONCERN BY SBA, IN ADDITION TO BEING INDEPENDENTLY OWNED AND OPERATED, AND NOT DOMINANT IN THE FIELD OF OPERATION IN WHICH IT IS BIDDING ON GOVERNMENT CONTRACTS, A SMALL BUSINESS CONCERN IN ORDER TO QUALIFY AS SUCH MUST MEET A SPECIAL CRITERIA IN THE FOLLOWING INDUSTRY.

"/1) CERTAIN INDUSTRIES EMPLOYING NOT MORE THAN 1,000 EMPLOYEES.--- IN THE FOLLOWING INDUSTRIES THE NUMBER OF EMPLOYEES OF THE CONCERN AND ITS AFFILIATES MUST NOT EXCEED 1,000 EMPLOYEES.

"/I) AIRCRAFT EQUIPMENT AND PARTS INDUSTRY--- THIS SPECIAL DEFINITION FOR THE AIRCRAFT EQUIPMENT AND PARTS INDUSTRY APPLIES ONLY IN THE PROCUREMENT OF THE FOLLOWING ITEMS, EXCEPT THAT THIS SUBPARAGRAPH SHALL NOT BE APPLICABLE TO THE SIZE CLASSIFICATION OF SUBCONTRACTORS AS PROVIDED FOR IN PARAGRAPH (B) OF THE SMALL BUSINESS SUBCONTRACTING PROGRAM CLAUSE (SEE 1- 707.2 (B) ( UNTIL 2 JANUARY 1963.

AIRFRAMES AND STRUCTURAL COMPONENTS

AIRCRAFT PROPELLERS AND HUBS

WHEEL AND BRAKE SYSTEMS

JET ENGINES

FUEL TANKS

AIRCRAFT HYDRAULIC SYSTEMS

AIRCRAFT VACUUM SYSTEMS

AIRCRAFT AIR-CONDITIONING

HEATING AND PRESSURIZING EQUIPMENT

FIRE CONTROL SYSTEMS

FLIGHT INSTRUMENTS

FLIGHT SIMULATORS (EXCEPT

SMALL COCKPIT TRAINERS)

AIRCRAFT DE-ICING SYSTEMS.'

BIDS WERE OPENED ON FEBRUARY 28, 1963. THE LOWEST BID OF $35,145 WAS SUBMITTED BY CUBIC CORPORATION WHICH CERTIFIED ITSELF AS A SMALL BUSINESS CONCERN. THE NEXT LOWEST BID IN THE AMOUNT OF $35,784, LESS 1/2 PERCENT 10 DAYS CASH DISCOUNT, WAS SUBMITTED BY ARF PRODUCTS, INC., RATON, NEW MEXICO.

BY TELEGRAM AND LETTER TO OOAMA DATED MARCH 14, 1963, ARF PROTESTED AGAINST AN AWARD TO CUBIC ON THE BASIS THAT CUBIC WAS NOT A SMALL BUSINESS CONCERN. ARF STATED THAT IT DID NOT REGARD THE SPECIAL DEFINITION FOR SMALL BUSINESS IN NOTE 15 OF THE INVITATION, QUOTED ABOVE, AS BEING APPLICABLE TO THE PROCUREMENT SINCE SUBPARAGRAPH (B) (1) (I) OF THE NOTE STATES THAT THE SPECIAL DEFINITION APPLIES ONLY IN CASES WHEN ONE OR MORE OF 13 SPECIFIC ITEMS IS BEING PROCURED AND ARF CONTENDS THAT THE EQUIPMENT DESCRIBED IN THE INVITATION WAS NOT ONE OF THE SPECIFIC 13 ITEMS LISTED.

BY LETTER OF MARCH 25, 1963, THE DEPARTMENT OF THE AIR FORCE REQUESTED THE SMALL BUSINESS ADMINISTRATION (SBA) TO MAKE A DETERMINATION OF THE SIZE STATUS OF CUBIC. ON APRIL 1, 1963, THE SBA DENVER OFFICE, AT THE REQUEST OF THE SBA LOS ANGELES OFFICE, DETERMINED THAT, DESPITE THE DEFINITION OF A SMALL BUSINESS AS SET FORTH IN THE INVITATION, THE ITEMS BEING PROCURED DID NOT FALL WITHIN THE PURVIEW OF SECTION 121.3-8 (A) (3) OF THE SMALL BUSINESS SIZE STANDARDS REGULATION (REVISION 3), AS AMENDED, 27 F.R. 9757, 13 CFR 121.3-8 (A) (3) AND, THEREFORE, THE APPLICABLE SIZE STANDARD WAS 500 EMPLOYEES (SECTION 121.3-8 (A) (3) OF THE SMALL BUSINESS SIZE STANDARDS SETS FORTH THE DEFINITION CONTAINED IN NOTE 15 OF THE INVITATION).

ON APRIL 5, 1963, SBA PUBLISHED A NOTICE IN THE FEDERAL REGISTER (28 F.R. 3368) THAT SMALL BUSINESS CERTIFICATES WOULD BE ISSUED FOR CERTAIN INDUSTRIES SET FORTH IN SCHEDULE B OF AMENDMENT 4 TO THE SMALL BUSINESS SIZE STANDARDS REGULATION (REVISION 3), AS AMENDED, WHICH AMENDMENT ALSO WAS PUBLISHED ON THAT DATE IN THE FEDERAL REGISTER. THESE CERTIFICATES, IT WAS STATED, WOULD BE ISSUED TO THOSE CONCERNS WHOSE NUMBER OF EMPLOYEES EXCEED 500 PERSONS BUT DO NOT EXCEED 1,000 PERSONS AND WHICH CONFORM TO THE STANDARDS SET FORTH IN AMENDMENT 4. THE NOTICE FURTHER STATED THAT NO CERTIFICATES WOULD BE RENEWED, ISSUED, OR CONTINUED AFTER JUNE 30, 1963, BECAUSE, APPARENTLY, THE NEW SIZE STANDARDS WOULD BECOME EFFECTIVE ON JULY 1, 1963.

ON THE SAME DATE THAT THE SBA NOTICE WAS PUBLISHED (APRIL 5, 1963) CUBIC REQUESTED THE OFFICE OF SMALL BUSINESS SIZE STANDARDS TO ISSUE IT AN INTERIM SMALL BUSINESS CERTIFICATE FOR SIC INDUSTRY NO. 3662, RADIO AND TELEVISION, TRANSMITTING, SIGNALING AND DETECTION EQUIPMENT AND APPARATUS, IN ACCORDANCE WITH THE NOTICE DESCRIBED ABOVE. WHILE THIS REQUEST WAS UNDER CONSIDERATION THE SBA LOS ANGELES OFFICE NOTIFIED THE AIR FORCE ON APRIL 8, 1963, THAT CUBIC WAS NOT A SMALL BUSINESS FOR PURPOSES OF GOVERNMENT PROCUREMENT. THEREAFTER THE FOLLOWING EVENTS TOOK PLACE AS REPORTED BY SBA IN A LETTER TO US DATED JUNE 17, 1963, AS FOLLOWS:

"APRIL 16, 1963 - THE OFFICE OF SMALL BUSINESS SIZE STANDARDS ISSUED CUBIC AN INTERIM SMALL BUSINESS CERTIFICATE FOR SIC INDUSTRY 3662. (EXHIBIT L)

CUBIC "APPEALED" (ASKED FOR RECONSIDERATION OF) SBA LOS ANGELES'S DETERMINATION THAT IT WAS NOT A SMALL BUSINESS. THE BASIS FOR ITS REQUEST WAS THAT THE REGULATION WAS INCORRECTLY APPLIED AND THAT IT HAD BEEN ISSUED A SMALL BUSINESS CERTIFICATE. (EXHIBIT M)

"APRIL 17, 1963 - SBA DENVER NOTIFIED CUBIC THAT IT HAD RECEIVED CUBIC'S SO-CALLED "APPEAL," THAT THE SMALL BUSINESS CERTIFICATE DATED APRIL 16, 1963, WAS NOT RETROACTIVE, THAT THE COMPTROLLER GENERAL OF THE UNITED STATES HAS RULED THAT, IN ORDER TO BE ELIGIBLE FOR AWARD OF A SET-ASIDE PROCUREMENT, A CONCERN MUST BE SMALL BOTH AT TIME OF OPENING AND AT TIME OF AWARD, AND THAT SBA DENVER HAD INFORMED THE CONTRACTING OFFICER THAT THE SMALL BUSINESS CERTIFICATE WOULD HAVE NO BEARING AS TO CUBIC'S SIZE STATUS IN CONNECTION WITH IFB 42-600-63 355. (EXHIBIT N)

"APRIL 24, 1963 - IT CAME TO THE ATTENTION OF THE OFFICE OF SMALL BUSINESS SIZE STANDARDS THAT SBA LOS ANGELES HAD NOT CONSIDERED CUBIC'S TELEGRAMS AS REQUESTS FOR RECONSIDERATION WITHIN THE MEANING OF SEC. 121.3 -4 (D) (1) OF THE SMALL BUSINESS SIZE STANDARDS REGULATION AND, THEREFORE, HAD NOT REFERRED THE CASE TO THE OFFICE OF SMALL BUSINESS SIZE STANDARDS FOR RECONSIDERATION.

"THE OFFICE OF SMALL BUSINESS SIZE STANDARDS, BEING OF THE OPINION THAT CUBIC'S APRIL 16, 1963, TELEGRAM WAS A VALID REQUEST FOR RECONSIDERATION, DIRECTED SBA LOS ANGELES TO FORWARD THE FILE TO WASHINGTON.

"MAY 1, 1963--- THE OFFICE OF SMALL BUSINESS SIZE STANDARDS DETERMINED THAT CUBIC WAS NOT A SMALL BUSINESS AT THE TIME OF BID AND OPENING BUT THAT ON APRIL 16, 1963, THE EFFECTIVE DATE OF ITS SMALL BUSINESS CERTIFICATE, IT BECAME A SMALL BUSINESS FOR THE PURPOSE OF PROCUREMENTS OF ALL PRODUCTS CLASSIFIED INTO SIC INDUSTRY 3662, INCLUDING MATTS TRANSMITTERS. THE QUESTION WHETHER, UNDER THE CIRCUMSTANCES, CUBIC COULD BE AWARDED THE CONTRACT, WAS SUBMITTED FOR DETERMINATION BY THE CONTRACTING OFFICER. (EXHIBITS O AND P) "

THE FACTS AND CIRCUMSTANCES SET FORTH ABOVE PRESENT A QUESTION WHICH HAS BEEN THE SUBJECT OF DECISION BY OUR OFFICE ON A NUMBER OF OCCASIONS - AT WHAT POINT IN TIME IS THE ELIGIBILITY OF A BIDDER DETERMINED FOR PURPOSES OF AWARD UNDER A SMALL-BUSINESS RESTRICTED PROCUREMENT? WE HAVE HELD, IN GENERAL, THAT THE FINAL DETERMINATION OF THE ELIGIBILITY OF A BIDDER AS A SMALL BUSINESS CONCERN UNDER A SMALL BUSINESS RESTRICTED INVITATION IS MADE AS OF THE DATE OF AWARD. B 143630, OCTOBER 13, 1960. WE HAVE, HOWEVER, RECOGNIZED TWO EXCEPTIONS TO THIS GENERAL RULE. THE FIRST EXCEPTION IS FOUND IN 40 COMP. GEN. 550 AND THE SECOND IN 41 COMP. GEN. 47. IN THE EARLIER CASE, A BID WAS SUBMITTED BY A LARGE BUSINESS CONCERN WHICH CERTIFIED ITSELF AS A LARGE BUSINESS BUT, AFTER BID OPENING AND PRIOR TO AWARD, BECAME A SMALL BUSINESS. WE HELD THAT THE BID IN QUESTION WAS NONRESPONSIVE ON ITS FACE AND WAS NOT ENTITLED TO CONSIDERATION. THE DECISION OF OCTOBER 13, 1960 (B-143630), WAS EXPRESSLY DISTINGUISHED, AND IT WAS NOTED THAT A RULE WHICH WOULD PERMIT AWARD TO A BIDDER UNDER THESE CIRCUMSTANCES WOULD NOT ONLY BE UNFAIR TO OTHER POSSIBLE LARGE BUSINESS CONCERNS WHICH HONORED THE INVITATION'S SMALL BUSINESS RESTRICTIONS AND DID NOT SUBMIT BIDS, BUT WOULD, ALSO, IMPAIR THE EFFECTIVENESS AND INTEGRITY OF ORDERLY SMALL BUSINESS PROCUREMENT PROCEDURES.

THE SECOND CASE CITED ABOVE (41 COMP. GEN. 47), INVOLVED A BIDDER WHICH CERTIFIED ITSELF AS A SMALL BUSINESS CONCERN EVEN THOUGH IT WAS ON NOTICE FROM SBA PRIOR TO SUBMISSION OF ITS BID THAT ITS SIZE STATUS WAS SUBJECT TO QUESTION. AFTER BID OPENING THE BIDDER IN QUESTION TOOK AFFIRMATIVE ACTION (REALIGNMENT OF ITS STOCK) FOR THE SOLE PURPOSE OF MEETING THE APPLICABLE SMALL BUSINESS SIZE STANDARDS AND THEREBY QUALIFYING FOR AWARD. AGAIN, AS IN 40 COMP. GEN. 550, THE DECISION OF OCTOBER 13, 1960, WAS EXPRESSLY DISTINGUISHED. WE CONCLUDED THAT THE CONTRACT AWARDED TO THE BIDDER IN QUESTION SHOULD BE CANCELED SINCE IT DID NOT UTILIZE THE SELF-CERTIFICATION PROCEDURE PRUDENTLY AND THE STOCK REALIGNMENT AFTER BID OPENING GAVE IT A SECOND CHANCE AND AN UNDUE ADVANTAGE OVER OTHER BIDDERS.

WE PERCEIVE NO COGENT REASONS FOR DEPARTING FROM THE GENERAL RULE IN THE INSTANT CASE. COMPARE B-149695, OCTOBER 26, 1962 (42 COMP. GEN. -). THERE IS NOTHING IN THE RECORD BEFORE US TO INDICATE A LACK OF GOOD FAITH OR PRUDENCE ON THE PART OF CUBIC MAKING ITS CERTIFICATION. IN FACT CUBIC MERELY FOLLOWED THE SPECIAL SMALL BUSINESS DEFINITION EXPRESSLY SET FORTH IN THE INVITATION, AS IT WAS ENTIRELY JUSTIFIED IN DOING. MOREOVER, SBA ISSUED A SMALL BUSINESS CERTIFICATE TO CUBIC ON APRIL 16 AND DETERMINED ON MAY 1, 1963, THAT AS OF THE EFFECTIVE DATE OF THE CERTIFICATE CUBIC BECAME A SMALL BUSINESS FOR THE PURPOSE OF PROCUREMENTS OF ALL PRODUCTS CLASSIFIED INTO SIC INDUSTRY 3662, INCLUDING MATTS TRANSMITTERS.

WHILE IT IS TRUE THAT CUBIC'S SMALL BUSINESS CERTIFICATE EXPIRED ON JUNE 30, 1963, WE DO NOT THINK THIS FACT IS, OR SHOULD BE, DETERMINATIVE OF THE ISSUE BEFORE US. CUBIC'S CERTIFICATE READ, IN PERTINENT PART, AS FOLLOWS:

"WE ARE PLEASED TO ADVISE YOU THAT, EFFECTIVE THIS DATE, YOUR CONCERN IS CERTIFIED AS A SMALL BUSINESS CONCERN FOR THE PURPOSE OF MAKING BIDS AND PROPOSALS ON GOVERNMENT CONTRACTS FOR PRODUCTS CLASSIFIED INTO THE FOLLOWING INDUSTRIES ONLY, AS LISTED AND DESCRIBED IN THE STANDARD INDUSTRIAL CLASSIFICATION MANUAL PUBLISHED BY THE BUREAU OF THE BUDGET, EXECUTIVE OFFICE OF THE PRESIDENT: SIC 3662 - RADIO AND TELEVISION TRANSMITTING, SIGNALING, AND DETECTION EQUIPMENT AND APPARATUS (750)

"ISSUANCE OF THIS INTERIM CERTIFICATE IS BASED UPON THE INFORMATION YOU SUBMITTED AND UPON THE CONDITION THAT IF, AT ANY TIME, THE EMPLOYMENT OF YOUR CONCERN AND ITS AFFILIATES, IF ANY, EXCEEDS THE NUMBER OF EMPLOYEES SET FORTH IN PARENTHESES FOLLOWING THE INDUSTRY TITLE, IT SHALL NOTIFY THIS OFFICE WITHIN SEVEN (7) DAYS AFTER SUCH CHANGE. "UNLESS SOONER REVOKED, THIS INTERIM CERTIFICATE WILL EXPIRE ON JUNE 30, 1963. ON JULY 1, 1963, THE ATTACHED AMENDMENT WILL BECOME EFFECTIVE. THEREAFTER, SMALL BUSINESS CERTIFICATES WILL NOT BE ISSUED, RENEWED, OR CONTINUED.'

IT IS NOTED THAT SBA'S CERTIFICATION OF CUBIC IS BASED UPON THE CRITERIA OF 750 EMPLOYEES UNDER INDUSTRY SIC 3662. ON JULY 1, 1963, AMENDMENT 4 TO THE SMALL BUSINESS SIZE STANDARDS BECAME EFFECTIVE. SECTION 121.3-8 (B) (3) OF THE NEW STANDARD PROVIDES, AS FOLLOWS:

"/B) MANUFACTURING. ANY CONCERN BIDDING ON A CONTRACT FOR A PRODUCT IT MANUFACTURED IS CLASSIFIED:

"/3) AS SMALL IF IT IS BIDDING ON A CONTRACT FOR A PRODUCT CLASSIFIED WITHIN AN INDUSTRY SET FORTH IN SCHEDULE B OF THIS PART AND ITS NUMBER OF EMPLOYEES DOES NOT EXCEED THE SIZE STANDARD ESTABLISHED FOR THAT INDUSTRY.' SCHEDULE B CONTAINS INDUSTRY CENSUS CLASSIFICATION CODE NO. 3662 ENTITLED "RADIO AND TELEVISION TRANSMITTING, SIGNALING, AND DETECTION EQUIPMENT AND APPARATUS" AND LISTS THE EMPLOYMENT SIZE STANDARD (NUMBER OF EMPLOYEES) AS 750--- THE SAME INDUSTRY AND THE SAME SIZE STANDARD UPON WHICH CUBIC'S CERTIFICATE WAS BASED. IN THAT CONNECTION, WE HAVE BEEN ADVISED INFORMALLY BY SBA THAT THE RECENT SMALL BUSINESS CERTIFICATES WHICH HAVE BEEN ISSUED BY SBA, INCLUDING THAT ISSUED TO CUBIC, WERE ISSUED ONLY TO THOSE CONCERNS WHICH COULD HAVE QUALIFIED AS SMALL BUSINESSES UNDER THE NEW INDUSTRY DEFINITIONS SET FORTH IN AMENDMENT 4. SINCE MATTS TRANSMITTERS HAVE BEEN DETERMINED TO FALL WITHIN INDUSTRY CLASSIFICATION 3662, AND SINCE CUBIC'S ELIGIBILITY FOR THE CONTRACT IS FOR DETERMINATION AS OF THE TIME OF AWARD (WHICH HAS NOT YET BEEN MADE), IT MUST BE CONCLUDED THAT CUBIC IS ENTITLED TO THE AWARD IF IT CAN QUALIFY AS A SMALL BUSINESS CONCERN UNDER THE NEW INDUSTRY CRITERIA.

ACCORDINGLY, YOU ARE ADVISED THAT, IF OTHERWISE PROPER, AWARD OF THE SUBJECT CONTRACT SHOULD BE MADE TO CUBIC AS THE LOWEST BIDDER IF THAT FIRM CAN, IN GOOD FAITH, CERTIFY ITSELF AS A SMALL BUSINESS CONCERN UNDER THE NEW INDUSTRY SMALL BUSINESS DEFINITION . ..END :