B-153606, JUN. 26, 1964

B-153606: Jun 26, 1964

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INC.: REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 25. THE SUBJECT REQUEST FOR PROPOSALS WAS ISSUED ON DECEMBER 30. THE MATERIAL WAS TO BE MANUFACTURED IN ACCORDANCE WITH THE ASSISTANT INDUSTRIAL MANAGER'S SPECIFICATION NO. 153 E/71- 418/64. THE PROPOSAL 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.'. THREE PROPOSALS WERE RECEIVED AS FOLLOWS: TABLE ITEM 1 ITEM 1A ITEM 2 ITEM 2A TOTAL DEL. ALL PROPOSALS WERE FORWARDED TO THE REQUIRING ACTIVITY FOR TECHNICAL EVALUATION. ALL OFFERORS WERE REQUESTED TO ADVISE IF THE DELIVERY DATE COULD BE LESSENED. AMERICAN ELECTRONICS CHANGED THEIR DELIVERY TO READ: "/A) DELIVERY OF ITEMS 1 AND 1 (A) WITHIN 6 WEEKS ARE.

B-153606, JUN. 26, 1964

TO AMERICAN ELECTRONICS, INC.:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 25, 1964, PROTESTING AGAINST THE AWARD OF A SMALL BUSINESS SET-ASIDE CONTRACT TO HALBAR ASSOCIATES, INC., UNDER REQUEST FOR PROPOSALS NO. RFP-123-41205, ISSUED BY THE U.S. NAVY PURCHASING OFFICE, LOS ANGELES, CALIFORNIA.

THE SUBJECT REQUEST FOR PROPOSALS WAS ISSUED ON DECEMBER 30, 1963, FOR THE PROCUREMENT OF ONE 5 KW AND ONE 10KW MOTOR GENERATOR SET, INCLUDING EQUIPMENT REPAIR PARTS. THE MATERIAL WAS TO BE MANUFACTURED IN ACCORDANCE WITH THE ASSISTANT INDUSTRIAL MANAGER'S SPECIFICATION NO. 153 E/71- 418/64. THE PROPOSAL 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.' THREE PROPOSALS WERE RECEIVED AS FOLLOWS:

TABLE

ITEM 1 ITEM 1A ITEM 2 ITEM 2A TOTAL DEL. (A) AMERICAN $3,387.00 $562.00 $3,499.00 $562.00 $8,010.00 120 D

ELECTRONICS (B) HALBAR $3,690.00 $400.00 $3,990.00$400.00 $8,480.00 45 D ASSOCIATES (C) WM. $3,490.00 $500.00 $3,995.00 $500.00 $8,485.00 60 D HORLICK

ON JANUARY 22, 1964, ALL PROPOSALS WERE FORWARDED TO THE REQUIRING ACTIVITY FOR TECHNICAL EVALUATION. THE REQUIRING ACTIVITY QUESTIONED THE DELIVERY DATE PORTION OF THE SUBMITTED PROPOSALS, AND IN VIEW THEREOF, ALL OFFERORS WERE REQUESTED TO ADVISE IF THE DELIVERY DATE COULD BE LESSENED. IN REPLY WILLIAM HORLICK STATED DELIVERY COULD BE CHANGED TO 45 DAYS AFTER RECEIPT OF ORDER. AMERICAN ELECTRONICS CHANGED THEIR DELIVERY TO READ: "/A) DELIVERY OF ITEMS 1 AND 1 (A) WITHIN 6 WEEKS ARE; (B) DELIVERY OF ITEMS 2 AND 2 (A) WITHIN 4 WEEKS ARO. ABOVE CHANGES CAN BE EFFECTED IF PARAGRAPH 3.12.1 OF THE SPEC. 153D (71-418/64 CAN BE MODIFIED FROM "TYPE SYNCHRONOUS" TO "TYPE RELUCTANCE SYNCHRONOUS.'" THEREAFTER, ON FEBRUARY 5, 1964, THE REQUIRING ACTIVITY RECOMMENDED PROCUREMENT "BASED ON THE EARLIEST DELIVERY DATE AND TO THE ORIGINAL SPECIFICATIONS.' HALBAR ASSOCIATES CERTIFIED THAT THEY WERE A SMALL BUSINESS CONCERN AND MANUFACTURER, AND AWARD WAS MADE TO HALBAR ON FEBRUARY 24, 1964, UNDER CONTRACT N123 (62679) 35467A.

YOU CHALLENGE THE SMALL BUSINESS STATUS OF HALBAR ASSOCIATES AND YOU STATE THAT HALBAR IS A REPRESENTATIVE OFFICE FOR A SUBSIDIARY OF TELEDYNE (INET-SPRAGUE), A LARGE BUSINESS, WHO WILL BE THE MANUFACTURER OF THE EQUIPMENT. ON SUCH BASIS YOU PROTEST THE AWARD TO HALBAR.

IN ITS REPORT TO US IN THIS MATTER THE SMALL BUSINESS ADMINISTRATION STATES AS FOLLOWS:

"1. HALBAR ASSOCIATES IS A PARTNERSHIP OF MR. HARRISON FRANK OF WOODLAND HILLS, CALIFORNIA, AND MR. ALBERT B. WORCH OF ROLLING HILLS, CALIFORNIA. NEITHER MR. FRANK NOR MR. WORCH ARE OFFICERS, DIRECTORS, OR PRINCIPAL STOCKHOLDERS OF ANY OTHER CONCERN.

"2. THE TOTAL AVERAGE EMPLOYMENT OF HALBAR ASSOCIATES WAS ONLY THREE DURING THE FOUR QUARTERS ENDING DECEMBER 31, 1963, AND IS ONLY FIVE NOW.

"3. IN THE CASE OF THE CONTRACT IN QUESTION HALBAR ASSOCIATES PURCHASED APPROXIMATELY 29 MAJOR COMPONENTS FROM BOTH LARGE AND SMALL BUSINESS CONCERNS AND THEN ASSEMBLED THEM TO NAVY SPECIFICATIONS. A PLANT FOR SUCH PURPOSES IS MAINTAINED AT 1432 CASPIAN AVENUE, LONG BEACH, CALIFORNIA, IN AN AREA LEASED FROM THE SHERWOOD MACHINE SHOP.

"IN VIEW OF THE ABOVE, HALBAR ASSOCIATES IS CONSIDERED TO BE A MANUFACTURER OF THE ITEMS BEING PURCHASED AND, SINCE ITS TOTAL AVERAGE EMPLOYMENT DID NOT EXCEED 500 PERSONS, WE HAVE DETERMINED THAT IT IS AS MALL BUSINESS CONCERN.'

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 DETERMINATION 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 NOTED ABOVE, HALBAR ASSOCIATES HAS BEEN DETERMINED TO BE A SMALL BUSINESS CONCERN, AND IN VIEW OF THE PROVISIONS OF 15 U.S.C. A SMALL BUSINESS CONCERN, AND IN VIEW OF THE PROVISIONS OF 15 U.S.C. 637 (B) (6) SUCH DETERMINATION IS CONCLUSIVE ON THIS OFFICE. IT FOLLOWS THAT THE AWARD OF A CONTRACT TO HALBAR 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.