B-153108, FEB. 5, 1964

B-153108: Feb 5, 1964

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TO MAYTAG AIRCRAFT CORPORATION: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF DECEMBER 18. SPECIFICALLY YOU PROTEST THE FACT THAT THE ABOVE INVITATION FOR BIDS WAS SET ASIDE FOR SMALL BUSINESS UNDER SIZE STANDARDS SUBSTANTIALLY LOWER THAN THOSE IN PREVIOUS INSTANCES. THE RECORD DISCLOSES THAT THE SUBJECT INVITATION WAS ISSUED BY DPSC ON NOVEMBER 18. IS NOT ONLY REQUIRED TO FURNISH FUEL DELIVERY SERVICES. THE SMALL BUSINESS ADMINISTRATION HAS DETERMINED THAT THE APPLICABLE SIZE STANDARD IS THAT A CONCERN. HAVE TOTAL AVERAGE ANNUAL RECEIPTS OF $1 MILLION OR LESS FOR THE PRECEDING THREE FISCAL YEARS.'. DSA-6-64-162 WAS SET ASIDE FOR SMALL BUSINESS IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION SECTION 1-706.5.

B-153108, FEB. 5, 1964

TO MAYTAG AIRCRAFT CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF DECEMBER 18, 1963, PROTESTING AGAINST AN AWARD UNDER INVITATION FOR BIDS NO. DSA-6-64-162, ISSUED BY THE DEFENSE PETROLEUM SUPPLY CENTER (DPSC), WASHINGTON 25, D.C. SPECIFICALLY YOU PROTEST THE FACT THAT THE ABOVE INVITATION FOR BIDS WAS SET ASIDE FOR SMALL BUSINESS UNDER SIZE STANDARDS SUBSTANTIALLY LOWER THAN THOSE IN PREVIOUS INSTANCES.

THE RECORD DISCLOSES THAT THE SUBJECT INVITATION WAS ISSUED BY DPSC ON NOVEMBER 18, 1963, AS THE PROCURING ACTIVITY FOR COMMERCIAL FUEL DELIVERY SERVICES AT VARIOUS NAVAL AIR STATIONS IN THE UNITED STATES. THE CONTRACTOR AT THE NAVAL AIR STATION, MERIDIAN, MISSISSIPPI, UNLIKE MOST OTHER BASES, IS NOT ONLY REQUIRED TO FURNISH FUEL DELIVERY SERVICES, BUT MUST ALSO OPERATE AND MAINTAIN A GOVERNMENT-OWNED FUEL STORAGE STATION. THIS REQUIREMENT APPEARS AS ITEM 4 ON PAGE 12 OF THE INVITATION IN QUESTION. ON PAGE NO. 1 OF THE INVITATION THE FOLLOWING APPEARS:

"CAUTION TO BIDDERS:--- THIS PROCUREMENT HAS BEEN SET-ASIDE FOR PARTICIPATION BY SMALL BUSINESS CONCERNS ONLY. (SEE PARAGRAPH 15 OF THE ADDITIONAL TERMS AND CONDITIONS). DUE TO THE OPERATION AND MAINTENANCE OF THE GOVERNMENT-OWNED FUEL STORAGE STATION, THE SMALL BUSINESS ADMINISTRATION HAS DETERMINED THAT THE APPLICABLE SIZE STANDARD IS THAT A CONCERN, INCLUDING ITS AFFILIATES, HAVE TOTAL AVERAGE ANNUAL RECEIPTS OF $1 MILLION OR LESS FOR THE PRECEDING THREE FISCAL YEARS.'

THE CONTRACTING OFFICER REPORTS THAT IFB NO. DSA-6-64-162 WAS SET ASIDE FOR SMALL BUSINESS IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION SECTION 1-706.5, ONLY AFTER A SURVEY REVEALED THAT FOUR SMALL BUSINESSES INTENDED TO BID ON THE PROCUREMENT IN QUESTION.

IN VIEW OF THE EXPRESSED CONGRESSIONAL POLICY IN FAVOR OF SMALL BUSINESS PARTICIPATION IN THE GOVERNMENT PROCUREMENT PROGRAM, AND THE CONSIDERABLE DISCRETION PLACED WITH THE SBA AND THE CONTRACTING AGENCY TO IMPLEMENT THIS POLICY BY MEANS OF TOTAL OR PARTIAL SET-ASIDES (15 U.S.C. 631, 644), SMALL BUSINESS SET-ASIDES CANNOT BE CONSIDERED IMPROPER BY THIS OFFICE UNLESS THEIR EFFECT IS TO INCREASE SMALL BUSINESS AWARDS IN A PARTICULAR AREA BEYOND A "FAIR PROPORTION.' 41 COMP. GEN. 649, 650-651.

CONCERNING THE QUESTION OF CHANGING SIZE STANDARDS, THE CONTRACTING OFFICER REPORTS THAT THE SMALL BUSINESS STANDARD USED PREVIOUSLY HAD BEEN BASED ON THE NUMBER OF EMPLOYEES RATHER THAN ON A COMPANY'S ANNUAL RECEIPTS. THOUGH WE HAVE NOT BEEN INFORMED OF THE REASON FOR CHANGING THE SIZE STANDARDS IN QUESTION, WE SHOULD LIKE TO POINT OUT THAT THE SMALL BUSINESS SIZE STANDARDS USED WERE THOSE PRESCRIBED BY THE SMALL BUSINESS ADMINISTRATION, WHICH PURSUANT TO 15 U.S.C. 637 (B) (6) ARE CONCLUSIVE ON THE PROCUREMENT OFFICERS OF THE GOVERNMENT; FURTHER WE DO NOT FEEL WE HAVE THE AUTHORITY TO DETERMINE A SIZE STANDARD FIXED BY THE SMALL BUSINESS ADMINISTRATION TO BE ERRONEOUS. 41 COMP. GEN. 649, 653.

THEREFORE, SINCE BOTH THE DECISION TO SET ASIDE THE PROCUREMENT AND THE SIZE STANDARD DETERMINATION APPEAR TO HAVE BEEN MADE WITHIN THE FRAMEWORK OF THE PERTINENT LAWS AND REGULATIONS, WE FIND NO BASIS TO QUESTION EITHER THE SET-ASIDE OR THE VALIDITY OF A RESULTING AWARD.