B-153029, MAR. 3, 1964

B-153029: Mar 3, 1964

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ALLEGING THAT YOU WERE PRECLUDED FROM PROTESTING THE SMALL BUSINESS STATUS OF GEERPRES WRINGER. WHICH WERE AWARDED CONTRACTS UNDER INVITATION FOR BIDS NO. THE BASIS OF YOUR PROTEST TO OUR OFFICE IS THAT YOU WERE NOT NOTIFIED AS PROVIDED IN FEDERAL PROCUREMENT REGULATION SECTION 1 1.703-2 (D) OF SBA'S DETERMINATION THAT YOU WERE NOT SMALL BUSINESS. WAS FOR THE PROCUREMENT OF 166 ITEMS OF "FSC CLASS 7920 - WRINGERS AND MOP WRINGER AND BUCKET" IN ACCORDANCE WITH APPLICABLE SPECIFICATIONS. THE ITEMS IN THIS PROCUREMENT WERE DIVIDED INTO 30 ZONE GROUPS AND AWARD WAS TO BE MADE IN THE AGGREGATE FOR THE ITEMS IN EACH ZONE. BIDDERS WERE REQUIRED TO QUOTE PRICES FOR ALL ITEMS IN A PARTICULAR ZONE TO BE CONSIDERED FOR AWARD FOR SUCH ZONE GROUP.

B-153029, MAR. 3, 1964

TO WHITE MOP WRINGER COMPANY, DIVISION OF ELECTROLUX CORPORATION:

WE REFER TO YOUR LETTER DATED DECEMBER 6, 1963, WITH ENCLOSURES, ALLEGING THAT YOU WERE PRECLUDED FROM PROTESTING THE SMALL BUSINESS STATUS OF GEERPRES WRINGER, INCORPORATED, MUSKEGON, MICHIGAN, OR MARKET FORGE COMPANY, EVERETT, MASSACHUSETTS, WHICH WERE AWARDED CONTRACTS UNDER INVITATION FOR BIDS NO. FPNGF-F-26863-A-9-6-63, PRIOR TO AWARD. THE BASIS OF YOUR PROTEST TO OUR OFFICE IS THAT YOU WERE NOT NOTIFIED AS PROVIDED IN FEDERAL PROCUREMENT REGULATION SECTION 1 1.703-2 (D) OF SBA'S DETERMINATION THAT YOU WERE NOT SMALL BUSINESS.

THE SUBJECT INVITATION, ISSUED BY THE GENERAL SERVICES ADMINISTRATION, FEDERAL SUPPLY SERVICE, PROCUREMENT OPERATIONS DIVISION, 7TH AND D STREETS, S.W., WASHINGTON, D.C., WAS FOR THE PROCUREMENT OF 166 ITEMS OF "FSC CLASS 7920 - WRINGERS AND MOP WRINGER AND BUCKET" IN ACCORDANCE WITH APPLICABLE SPECIFICATIONS. THE ITEMS IN THIS PROCUREMENT WERE DIVIDED INTO 30 ZONE GROUPS AND AWARD WAS TO BE MADE IN THE AGGREGATE FOR THE ITEMS IN EACH ZONE. BIDDERS WERE REQUIRED TO QUOTE PRICES FOR ALL ITEMS IN A PARTICULAR ZONE TO BE CONSIDERED FOR AWARD FOR SUCH ZONE GROUP. CLAUSE 17 ON PAGE 7 OF THE INVITATION ENTITLED "NOTICE OF SMALL BUSINESS SET-ASIDE" PROVIDED AS FOLLOWS:

"/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.'

BIDS WERE OPENED ON SEPTEMBER 6, 1963, AND IT WAS FOUND THAT YOU SUBMITTED THE LOW BID FOR VARIOUS GROUPS OF ITEMS IN THIS PROCUREMENT. HOWEVER, ON SEPTEMBER 13, 1963, PRIOR TO AWARD ANOTHER BIDDER ON THIS INVITATION DIRECTED A LETTER TO THE GENERAL SERVICES ADMINISTRATION, ADVISING THAT WHITE MOP HAD RECENTLY BEEN PURCHASED AND MADE A DIVISION OF ELECTROLUX CORPORATION OF NEW YORK, AND THAT WHITE MOP WAS NO LONGER A SMALL BUSINESS CONCERN. ON SEPTEMBER 25, 1963, THE CHIEF, FUELS AND GENERAL PRODUCTS SECTION, FEDERAL SUPPLY SERVICE, SENT A MEMORANDUM TO THE SMALL BUSINESS ADMINISTRATION REQUESTING THAT A SIZE DETERMINATION BE MADE OF YOUR COMPANY. ON OCTOBER 3, 1963, THE SMALL BUSINESS ADMINISTRATION, 42 BROADWAY, NEW YORK 4, NEW YORK, DIRECTED A LETTER TO YOU REQUESTING THAT YOU COMPLETE AND RETURN FORM 355, ENTITLED "APPLICATION FOR SMALL BUSINESS SIZE DETERMINATION.' ON OCTOBER 9, 1963, YOU ADVISED SBA AS FOLLOWS:

"IT IS TRUE THAT SUBSEQUENT TO THE SUBMISSION OF OUR BID ON AUGUST 22, 1963, ELECTROLUX CORPORATION ACQUIRED THE BUSINESS AND ASSETS OF WHITE MOP WRINGER COMPANY SO THAT TECHNICALLY BECAUSE OF THE NUMBER OF EMPLOYEES EMPLOYED BY ELECTROLUX, WE DO NOT NOW QUALIFY AS A SMALL BUSINESS CONCERN.'

ON OCTOBER 11, 1963, SBA ADVISED GSA THAT:

"SINCE IT IS PUBLIC KNOWLEDGE THAT ELECTROLUX CORPORATION HAS OVER 3000 EMPLOYEES, I HEREBY DETERMINE WHITE MOP WRINGER COMPANY DOES NOT REPEAT NOT QUALIFY AS SMALL BUSINESS FOR PURPOSES OF GOVERNMENT PROCUREMENTS. THIS DETERMINATION IS APPLICABLE TO SUBJECT INVITATION FOR BID.'

THE INVITATION REFERRED TO IN THE SBA LETTER WAS CLEARLY IDENTIFIED AS THE INVITATION INVOLVED IN THIS CASE. ON NOVEMBER 4, 1963, GSA MADE GROUP AWARDS FOR THE ITEMS IN THIS PROCUREMENT TO MARKET FORGE, GEERPRES, AND TWO OTHER COMPANIES.

ON DECEMBER 6, 1963, YOU DIRECTED YOUR LETTER TO OUR OFFICE ALLEGING THAT GEERPRES AND MARKET FORGE MAY BE LARGE BUSINESS, AND THAT YOU WERE PRECLUDED FROM QUESTIONING THE SIZE STATUS OF THESE BIDDERS PRIOR TO AWARD AS SBA DID NOT NOTIFY YOU OF THE DETERMINATION THAT YOU WERE NOT SMALL BUSINESS AS PROVIDED IN FEDERAL PROCUREMENT REGULATION SECTION 1-1.703-2 (D).

THERE IS NO QUESTION THAT YOUR BID WAS PROPERLY REJECTED. IN THIS REGARD 15 U.S.C. 637 (B) (6) PROVIDES THAT SBA IS AUTHORIZED TO DETERMINE WITHIN ANY INDUSTRY THE CONCERNS WHICH ARE TO BE DESIGNATED "SMALL-BUSINESS CONCERNS" ENTITLED TO PREFERENCE IN GOVERNMENT PROCUREMENT, AND WHEN SUCH DETERMINATION IS MADE IT IS CONCLUSIVE UPON THE PROCUREMENT AGENCY. NEITHER OUR OFFICE NOR ANY EXECUTIVE AGENCY OF THE GOVERNMENT MAY QUESTION A DETERMINATION MADE BY SBA OF THE SMALL BUSINESS SIZE OF A CONCERN BIDDING UNDER A WHOLLY SET-ASIDE ADVERTISED PROCUREMENT. IN VIEW THEREOF, THE CONTRACTING OFFICER WAS PRECLUDED BY LAW FROM MAKING A VALID AWARD TO YOUR CONCERN UNDER THIS INVITATION.

IN REGARD TO YOUR CONTENTION THAT YOU WERE PRECLUDED FROM PROTESTING THE SMALL BUSINESS SIZE STATUS OF OTHER BIDDERS PRIOR TO AWARD SINCE SBA DID NOT FORMALLY NOTIFY YOU OF THE DETERMINATION THAT YOU WERE NOT SMALL BUSINESS, WE HAVE THE FOLLOWING COMMENTS. APPARENTLY, ONE REASON YOU DID NOT PROTEST THE SIZE STATUS OF MARKET FORGE OR GEERPRES WAS YOUR BELIEF THAT SUCH A PROTEST WAS UNNECESSARY AS YOU WOULD RECEIVE THE AWARD FOR THE GROUPS OF ITEMS ON WHICH YOUR BID WAS LOW. HOWEVER, YOUR LETTER DATED OCTOBER 9, 1963, TO SBA, INDICATES THAT YOU WERE AWARE PRIOR TO AWARD THAT YOU WERE NOT SMALL BUSINESS AND IT FOLLOWS THAT YOU KNEW THEN THAT YOU PROBABLY WOULD NOT RECEIVE AN AWARD FOR ANY OF THE ITEMS IN THIS PROCUREMENT. IF YOU FELT THAT GEERPRES AND MARKET FORGE ALSO WERE NOT ENTITLED TO AN AWARD SINCE THESE CONCERNS DID NOT QUALIFY AS SMALL BUSINESS YOU WERE FREE BETWEEN THE TIME YOU WROTE YOUR LETTER TO SBA AND NOVEMBER 4, 1963, TO PROTEST THE SIZE STATUS OF THESE BIDDERS. IN THESE CIRCUMSTANCES WE FAIL TO SEE WHY THE ABSENCE OF FORMAL NOTIFICATION BY SBA AS TO YOUR SIZE STATUS SHOULD HAVE HAD ANY EFFECT ON YOUR PROTESTING THE SIZE STATUS OF OTHER BIDDERS PRIOR TO AWARD OR IN WHAT MANNER YOU WERE PRECLUDED FROM PROTESTING THE SIZE STATUS OF OTHER BIDDERS.

FEDERAL PROCUREMENT REGULATION SECTION 1-1.703-1 IN CONNECTION WITH FEDERAL PROCUREMENT REGULATION SECTION 1-1.703-2 (A) PROVIDE THAT THE CONTRACTING OFFICER SHALL ACCEPT THE SELF-CERTIFICATION BY A BIDDER AS TO THE SIZE OF HIS FIRM UNLESS THE CONTRACTING OFFICER DESIRES TO SUBMIT THE MATTER TO THE SMALL BUSINESS ADMINISTRATION OR SOME OTHER BIDDER HAS, PRIOR TO AWARD, SUBMITTED TO THE CONTRACTING OFFICER A WRITTEN PROTEST. SEE ALSO B-147973, APRIL 9, 1962, WHICH CONSIDERED SUBSTANTIALLY THE SAME PROVISION IN ARMED SERVICES PROCUREMENT REGULATION SECTION 1-703. THE RECORD SHOWS THAT YOU DID NOT QUESTION THE SIZE STATUS OF GEERPRES OR MARKET FORGE UNTIL AFTER AWARD AND THE CONTRACTING AGENCY INFORMS US NO PROTESTS WERE RECEIVED PRIOR TO AWARD RELATING TO THE SIZE STATUS OF GEERPRES OR MARKET FORGE. IN SUCH CIRCUMSTANCES, FEDERAL PROCUREMENT REGULATION SECTION 1-1.703-2 (B) PROVIDES THAT A PROTEST AS TO THE SIZE OF ANOTHER BIDDER SHALL NOT BE CONSIDERED. IN OUR VIEW SUCH A RULE IS EMINENTLY REASONABLE AND NECESSARY AS A PRACTICAL MATTER TO THE PROPER ADMINISTRATION OF GOVERNMENT CONTRACTS SINCE A BIDDER IN SUCH CIRCUMSTANCES OTHERWISE COULD NEVER BE SURE THAT AN AWARD TO HIM WOULD BE SUSTAINED. WE DO NOT FEEL THAT THE FACTUAL SITUATION IN WHICH YOU WERE PLACED NEGATES THE REASON FOR OR JUSTIFIES AN EXCEPTION TO THE RULE, AT LEAST IN THE ABSENCE OF A PRIMA FACIE SHOWING THAT THE CONTRACTORS DID NOT QUALIFY AS SMALL BUSINESS AT THE TIME OF AWARD AND THAT THEIR SELF CERTIFICATION AS SMALL BUSINESS WAS NOT MADE IN GOOD FAITH.