B-152250, DEC. 10, 1963

B-152250: Dec 10, 1963

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INC.: REFERENCE IS MADE TO YOUR LETTER DATED AUGUST 10. IN YOUR LETTER IT IS STATED THAT YOUR COMPANY SUBMITTED BIDS AS A SMALL BUSINESS CONCERN FOR 35. 000 OF THE REQUIRED NUMBER OF BLANKETS BUT THAT YOU WERE AWARDED A CONTRACT FOR ONLY 18. - AND BELIEVE THAT YOU SHOULD HAVE BEEN AWARDED A CONTRACT FOR THE FULL 35. 000 BLANKETS ON THE BASIS THAT THE PEARCE COMPANY AS A SUBSIDIARY OF A LARGE BUSINESS CONCERN IS ITSELF A LARGE BUSINESS CONCERN RATHER THAN IN THE CATEGORY OF A SMALL BUSINESS CONCERN. IT IS REPORTED THAT THE SUBJECT INVITATION FOR BIDS. WAS OPENED ON JUNE 19. THE AWARDS OF THE NON-SET-ASIDE PORTION ARE NOT MATERIAL HERE. 8 WERE WITHIN 120 PERCENT OF THE HIGHEST AWARD PRICE FOR DELIVERY TO THE UTAH ARMY DEPOT.

B-152250, DEC. 10, 1963

TO MONITEAU MILLS, INC.:

REFERENCE IS MADE TO YOUR LETTER DATED AUGUST 10, 1963, PROTESTING AGAINST THE PARTIAL AWARD TO PEARCE WOOLEN MILLS, INC., WOOLRICH, PENNSYLVANIA, UNDER INVITATION FOR BIDS NO. DSA-1-63-1205, ISSUED BY THE DEFENSE CLOTHING AND TEXTILE SUPPLY CENTER, DEFENSE SUPPLY AGENCY.

IN YOUR LETTER IT IS STATED THAT YOUR COMPANY SUBMITTED BIDS AS A SMALL BUSINESS CONCERN FOR 35,000 OF THE REQUIRED NUMBER OF BLANKETS BUT THAT YOU WERE AWARDED A CONTRACT FOR ONLY 18,586 BLANKETS. YOU PROTEST THAT PART OF THE AWARD TO PEARCE WOOLEN MILLS, INC., WHICH INCLUDES 16,414 BLANKETS--- THE DIFFERENCE BETWEEN YOUR BID FOR 35,000 BLANKETS AND THE AWARD NUMBER--- AND BELIEVE THAT YOU SHOULD HAVE BEEN AWARDED A CONTRACT FOR THE FULL 35,000 BLANKETS ON THE BASIS THAT THE PEARCE COMPANY AS A SUBSIDIARY OF A LARGE BUSINESS CONCERN IS ITSELF A LARGE BUSINESS CONCERN RATHER THAN IN THE CATEGORY OF A SMALL BUSINESS CONCERN. YOU MAINTAIN THAT THE WOOLRICH WOOLEN MILLS, WOOLRICH, PENNSYLVANIA, AS PARENT COMPANY OF PEARCE WOOLEN MILLS, BY BIDDING THROUGH THE PEARCE COMPANY OBTAINED A PREFERRED POSITION AS A SMALL BUSINESS CONCERN RATHER THAN BEING SUBJECT TO UNRESTRICTED BIDDING AS LARGE BUSINESS AND IN COMPETITION WITH OTHER LARGE CONCERNS.

IT IS REPORTED THAT THE SUBJECT INVITATION FOR BIDS, WHICH ISSUED ON JUNE 3, 1963, AND WITH AMENDMENT NO. 1, WAS OPENED ON JUNE 19, 1963. THE INVITATION FOR BIDS, IN ADDITION TO A REQUEST FOR BIDS ON A NON SET-ASIDE PORTION, CONTAINED A NOTICE OF PARTIAL SMALL BUSINESS SET ASIDE (DCTSC FORMS 1373-1, 1373-2, 1373-2A AND 1373-4) FOR AN ADDITIONAL QUANTITY OF 173,392 BLANKETS TO BE DELIVERED TO UTAH ARMY DEPOT. THE AWARDS OF THE NON-SET-ASIDE PORTION ARE NOT MATERIAL HERE. OF 14 SMALL BUSINESS CONCERNS SUBMITTING BIDS, 8 WERE WITHIN 120 PERCENT OF THE HIGHEST AWARD PRICE FOR DELIVERY TO THE UTAH ARMY DEPOT.

ON THE NON-SET-ASIDE PORTION, PEARCE WOOLEN MILLS, INC., WOOLRICH, PENNSYLVANIA, QUOTED ON A MAXIMUM QUANTITY OF 173,392 BLANKETS AND YOUR COMPANY QUOTED A MAXIMUM OF 35,000 BLANKETS FOR MANUFACTURE AND DELIVERY TO UTAH ARMY DEPOT. FOLLOWING A PROTEST BY ANOTHER CONCERN THAT THE PEARCE WOOLEN MILLS WAS NOT A SMALL BUSINESS CONCERN, A REQUEST WAS ADDRESSED ON JULY 1, 1963, TO THE SMALL BUSINESS ADMINISTRATION TO ISSUE SIZE DETERMINATIONS ON THE WOOLRICH WOOLEN MILLS OF WHICH THE PEARCE WOOLEN MILLS IS A SUBSIDIARY. BY MEMORANDUM DATED JULY 11, 1963, THE DEFENSE CLOTHING AND TEXTILE SUPPLY CENTER WAS ADVISED BY THE SMALL BUSINESS ADMINISTRATION THAT THE PEARCE COMPANY WAS DETERMINED TO BE A SMALL BUSINESS CONCERN UNDER THIS INVITATION FOR BIDS. AT THAT TIME THE SMALL BUSINESS ADMINISTRATION ALSO FOUND THAT THERE WAS AN AFFILIATION BETWEEN THE PEARCE AND WOOLRICH COMPANIES; THAT THERE WERE TWO ADDITIONAL AFFILIATES; BUT THAT THE TOTAL EMPLOYMENT OF THE PEARCE COMPANY AND ITS AFFILIATES IS LESS THAN 500 PERSONS, AND THAT THE PEARCE COMPANY, WITH ITS AFFILIATES, IS NOT DOMINANT IN ITS FIELD.

IT IS FURTHER REPORTED THAT NO SMALL BUSINESS CONCERN RECEIVED AN AWARD ON THE NON-SET-ASIDE PORTION, CONSEQUENTLY CONSIDERATION WAS GIVEN TO APPLICATION OF SUBPARAGRAPH (B) OF PARAGRAPH (C) (3) OF THE REQUEST FOR PROPOSALS, WHICH PROVIDED FOR THE DIVISION OF ELIGIBLE SMALL BUSINESS CONCERN BIDDERS INTO GROUPS ACCORDING TO LABOR AVAILABILITY. THERE WERE NO SMALL BUSINESS CONCERNS IN THE PERSISTENT LABOR SURPLUS AREAS (GROUP 1), AND THE PEARCE COMPANY WAS THE ONLY CONCERN IN GROUP 2--- SUBSTANTIAL LABOR SURPLUS AREA. THE REMAINING CONCERNS WERE GROUP 3--- NO LABOR SURPLUS AREA. IN RESPONSE TO INQUIRY WHETHER IT WAS INTERESTED IN THE SET -ASIDE PORTION, THE PEARCE COMPANY, IN LETTER DATED JULY 15, 1963, ADVISED THAT IT WISHED TO OFFER 154,806 BLANKETS, THAT IT WAS SMALL BUSINESS AND IN A SUBSTANTIAL LABOR SURPLUS AREA (GROUP 2). IN A DRAWING HELD ON JULY 12, 1963, TO DETERMINE THE PRIORITY OF THE REMAINING SMALL BUSINESS CONCERNS, MONITEAU MILLS, YOUR COMPANY, WAS DRAWN THIRD. THE FIRM DRAWN FIRST INDICATED ITS WILLINGNESS TO FURNISH THE REMAINING 18,586 BLANKETS. BEFORE AWARD COULD BE MADE TO EITHER OF THE SUCCESSFUL BIDDERS THE CONTRACTING OFFICER RECEIVED A CALL FROM YOUR COMPANY ADVISING THAT THE DEPARTMENT OF LABOR WAS RECONSIDERING THE LABOR SITUATION IN YOUR AREA, AND ON JULY 18, 1963, THE PROCURING CENTER WAS ADVISED THAT CALIFORNIA, MISSOURI, YOUR AREA, HAD BEEN CERTIFIED AS AN AREA OF SUBSTANTIAL UNEMPLOYMENT (GROUP 2). IN VIEW OF THIS INFORMATION A NEW DRAWING OF GROUP 2 FIRMS--- YOUR FIRM AND PEARCE WOOLEN MILLS, INC.--- WAS HELD, AND THE NAME OF THE PEARCE COMPANY WAS DRAWN. A CONTRACT AWARD FOR 154,806 BLANKETS WAS MADE TO THE PEARCE COMPANY AND THE SET-ASIDE BALANCE OF 18,586 BLANKETS WAS AWARDED TO YOUR COMPANY. THE FORMER GROUP 3 SUCCESSFUL BIDDER WAS ADVISED OF THE CHANGED SITUATION AND ADVISED THAT IT COULD NOT BE CONSIDERED FOR AWARD.

SECTION 637 (B) (6), TITLE 15, U.S.C. PROVIDES, IN SUBSTANCE, THAT THE SMALL BUSINESS ADMINISTRATION IS EMPOWERED TO DETERMINE WITHIN ANY INDUSTRY THE CONCERNS WHICH ARE TO BE DESIGNATED SMALL BUSINESS CONCERNS. THAT SECTION FURTHER PROVIDES THAT OFFICES OF THE GOVERNMENT HAVING PROCUREMENT POWERS SHALL ACCEPT AS CONCLUSIVE THE ADMINISTRATION'S DETERMINATION AS TO WHICH ENTERPRISES ARE TO BE DESIGNATED SMALL BUSINESS CONCERNS. AS NOTED ABOVE, PEARCE WOOLEN MILLS, INC., HAS BEEN DETERMINED TO BE A SMALL BUSINESS CONCERN. IN VIEW OF THE PROVISIONS OF 15 U.S.C. 637 (B) (6) SUCH DETERMINATION IS CONCLUSIVE. IT FOLLOWS THAT THE AWARD OF A CONTRACT TO PEARCE WOOLEN MILLS, INC., UNDER THE SUBJECT INVITATION WAS PROPER AND IN ACCORDANCE WITH APPLICABLE LAW. ACCORDINGLY, WE MUST ADVISE THAT OUR OFFICE HAS NO LEGAL BASIS UPON WHICH TO QUESTION THE AWARD AND YOUR PROTEST IS DENIED.