B-152942, JAN. 28, 1964

B-152942, JAN. 28, 1964

TO C. W. SPANN COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTERS DATED NOVEMBER 18 AND 20, 1963, WITH ENCLOSURES, PROTESTING THE AWARD OF CONTRACT NO. AF 11/623/- 1628, DATED NOVEMBER 1, 1963, TO EMCOR SERVICES, INC., ST. PAUL, MINNESOTA, FOR CERTAIN JANITORIAL SERVICES AT SCOTT AIR FORCE BASE, ILLINOIS.

IT APPEARS THAT UNDER INVITATION NO. 11-623-64-14, WHICH WAS ISSUED ON SEPTEMBER 20, 1963, BY THE PROCUREMENT OFFICE OF THE AIR FORCE BASE FOUR RESPONSIVE BIDS WERE RECEIVED IN THE ESTIMATED TOTAL AMOUNTS OF $7,837.12, $7,992, $8,915.40 AND $15,285.60 TO PERFORM JANITORIAL SERVICES IN FOUR BUILDINGS ON THE BASE DURING THE PERIOD FROM NOVEMBER 1, 1963, THROUGH OCTOBER 31, 1964. THE INVITATION PROVIDED THAT "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.' THE LOWEST ACCEPTABLE ESTIMATED BID OF $7,837.12 WAS SUBMITTED BY EMCOR SERVICES, NC., WHICH CERTIFIED THAT IT WAS A SMALL BUSINESS CONCERN AND WAS NOT OWNED OR CONTROLLED BY A PARENT COMPANY. HOWEVER, IN VIEW OF YOUR LETTER DATED OCTOBER 25, 1963, TO THE PROCUREMENT OFFICE PROTESTING THE SMALL BUSINESS STATUS OF EMCOR SERVICES, INC., THAT OFFICE REQUESTED A SIZE DETERMINATION OF THE CORPORATION BY THE SMALL BUSINESS ADMINISTRATION. UPON RECEIPT OF A DETERMINATION FROM THAT AGENCY THAT EMCOR SERVICES, INC., WAS SMALL BUSINESS CONTRACT NO. AF 11/623/-1626 WAS AWARDED BY THE PROCUREMENT OFFICE TO THAT CORPORATION ON NOVEMBER 1, 1963.

YOU CHALLENGE THE SMALL BUSINESS STATUS OF EMCOR SERVICES, INC., ON THE BASIS THAT IT IS AN AFFILIATE OF MIDWEST BUILDING SERVICES, INC. YOU STATE THAT MIDWEST IS LARGE BUSINESS SINCE ONLY RECENTLY THIS CORPORATION WAS DENIED THE AWARD OF A FEDERAL AVIATION AGENCY CONTRACT FOR THIS VERY REASON; THAT A MR. C. J. RONALLO, WHO IS PRESIDENT OF EMCOR, IS VICE PRESIDENT OF MIDWEST; AND THAT A FRANK W. MILLER, WHO IS OWNER AND PRESIDENT OF MIDWEST ALSO OWNS 20 PERCENT OF EMCOR. IT IS YOUR CONTENTION THAT EMCOR WAS FORMED BY MIDWEST SO THAT THE LATTER CORPORATION MIGHT CONTINUE TO SECURE GOVERNMENT CONTRACTS FOR JANITORIAL SERVICES WHICH IT IS NO LONGER ELIGIBLE TO RECEIVE.

SECTION 8 (B) (6) OF THE SMALL BUSINESS ACT AS AMENDED BY PUBLIC LAW 85- 536, 72 STAT. 384, 390, 15 U.S.C. 637 (B) (6), AUTHORIZES THE SMALL BUSINESS ADMINISTRATION TO DETERMINE WHICH BUSINESS ENTERPRISES ARE TO BE DESIGNATED AS SMALL BUSINESS CONCERNS AND MAKES ITS DETERMINATIONS IN THESE MATTERS CONCLUSIVE. SPECIFICALLY, THAT SECTION PROVIDES THAT "OFFICES OF THE GOVERNMENT * * * SHALL ACCEPT AS CONCLUSIVE THE ADMINISTRATION'S DETERMINATION AS TO WHICH ENTERPRISES ARE TO BE DESIGNATED "SMALL-BUSINESS CONCERNS.'"

AS ABOVE INDICATED, EMCOR SERVICES, INC., CERTIFIED IN ITS BID THAT IT WAS SMALL BUSINESS AND WAS NOT OWNED OR CONTROLLED BY A PARENT COMPANY; FURTHER, IN RESPONSE TO THE REQUEST OF THE SCOTT AIR FORCE BASE PROCUREMENT OFFICE FOR A SIZE DETERMINATION OF EMCOR SERVICES, INC., THE MINNEAPOLIS REGIONAL OFFICE, SMALL BUSINESS ADMINISTRATION, BY LETTER DATED OCTOBER 31, 1963, ADVISED THE PROCUREMENT OFFICE THAT THE CORPORATION WAS SMALL BUSINESS FOR THE PURPOSE OF JANITORIAL AND CUSTODIAL SERVICES AND, BASED ON THIS DETERMINATION, THE SUBJECT CONTRACT WAS AWARDED. ADDITIONALLY, THE RECORD SHOWS THAT BY A TELEPHONE CONVERSATION ON OCTOBER 29, 1963, THE BASE PROCUREMENT OFFICE ADVISED THE MINNEAPOLIS REGIONAL OFFICE, SMALL BUSINESS ADMINISTRATION, OF YOUR CONTENTION THAT EMCOR SERVICES, INC., WAS CONTROLLED IN FULL OR PART BY MIDWEST SERVICES, INC., WHICH LATTER CORPORATION RECENTLY WAS DENIED AN AWARD OF CONTRACT BY THE FEDERAL AVIATION AGENCY BECAUSE IT WAS NOT SMALL BUSINESS. THUS IT IS OBVIOUS THAT THE MINNEAPOLIS REGIONAL OFFICE WAS AWARE OF THE BASIS OF YOUR PROTEST AT THE TIME IT WAS CONSIDERING THE SIZE DETERMINATION STATUS OF EMCOR SERVICES, INC.

ACCORDINGLY, SINCE THE DETERMINATION MADE BY THE SMALL BUSINESS ADMINISTRATION UNDER THE CIRCUMSTANCES SET FORTH IS CONCLUSIVE AND BINDING ON OUR OFFICE, YOUR PROTEST MUST BE DENIED.