B-153900, JUN. 24, 1964

B-153900: Jun 24, 1964

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

INC.: REFERENCE IS MADE TO YOUR LETTER DATED APRIL 6. THE SUBJECT REQUEST FOR PROPOSALS FOR FUEL DELIVERY SERVICES WHICH WAS ISSUED BY THE DEFENSE PETROLEUM SUPPLY CENTER. WAS SPECIFICALLY SET ASIDE FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION. 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. THAT IT IS IN THE INTEREST OF MAINTAINING OR MOBILIZING THE NATION'S FULL PRODUCTIVE CAPACITY. OR IN THE INTEREST OF ASSURING THAT A FAIR PROPORTION OF GOVERNMENT PROCUREMENT IS PLACED WITH SMALL BUSINESS CONCERNS.

B-153900, JUN. 24, 1964

TO SERVICE AND MAINTENANCE FACILITIES, INC.:

REFERENCE IS MADE TO YOUR LETTER DATED APRIL 6, 1964, WITH ENCLOSURES, PROTESTING AWARD OF A CONTRACT UNDER A TOTAL SMALL BUSINESS SET-ASIDE TO MAYTAG AIRCRAFT CORPORATION UNDER RFP-DSA-6-64-N 192.

THE SUBJECT REQUEST FOR PROPOSALS FOR FUEL DELIVERY SERVICES WHICH WAS ISSUED BY THE DEFENSE PETROLEUM SUPPLY CENTER, WASHINGTON, D.C., WAS SPECIFICALLY SET ASIDE FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION. PARAGRAPH 16 OF THE ABOVE RFP STATES:

"16. NOTICE OF TOTAL SMALL BUSINESS SET-ASIDE (NOV. 1963)

"/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 AND SHALL BE REJECTED.

"/B) PARAGRAPH 12 - DEFINITION OF SMALL BUSINESS - IS CANCELLED AND SUPERSEDED BY THE FOLLOWING:

"A "SMALL BUSINESS CONCERN" IS A CONCERN, INCLUDING ITS AFFILIATES, WHICH (1) IS INDEPENDENTLY OWNED AND OPERATED, (2) IS NOT DOMINANT IN THE FIELD OF OPERATION IN WHICH IT IS BIDDING ON GOVERNMENT CONTRACTS, AND (3) THE ANNUAL SALES OR RECEIPTS DO NOT EXCEED $3,000,000.'

THE RECORD SHOWS THAT PROPOSALS WERE RECEIVED FROM THE FOLLOWING COMPANIES, EACH REPRESENTING THEMSELVES TO BE QUALIFIED AS A SMALL BUSINESS.

MAGNUS CORPORATION $165,249.60

MAYTAG AIRCRAFT CORPORATION 108,888.52

SERVICE AND MAINTENANCE

FACILITIES, INC. 139,799.38

IN ACCORDANCE WITH SECTION 1-703 (A) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) THE CONTRACTING OFFICER ACCEPTED AT FACE VALUE THE REPRESENTATION BY EACH OFFEROR REGARDING ITS STATUS AS A SMALL BUSINESS CONCERN. ON APRIL 3, 1964, AWARD WAS APPROPRIATELY MADE TO MAYTAG ON THE BASIS OF ITS LOW BID. IN YOUR LETTER TO THIS OFFICE PROTESTING THE AWARD YOU SUGGEST THAT MAYTAG IS NOT A SMALL BUSINESS CONCERN IN VIEW OF CERTAIN EXISTING RELATIONSHIPS BETWEEN NATIONAL AIRLINES AND LEWIS B. MAYTAG, JR. IN SUPPORT THEREOF, OUR ATTENTION IS INVITED TO A RECORD OF CERTAIN HEARINGS HELD BEFORE THE CIVIL AERONAUTICS BOARD (DOCKET 14121, DATED MARCH 12, 1964) AS WELL AS AN ARTICLE APPEARING IN "AVIATION DAILY" ON JANUARY 28, 1964.

AS PREVIOUSLY INDICATED SECTION 1-703 OF THE ASPR PROVIDES THAT A CONTRACTING OFFICER IS REQUIRED TO ACCEPT AT FACE VALUE EITHER A SMALL BUSINESS CERTIFICATE OR A BIDDER'S SELF-CERTIFICATION IN THE ABSENCE OF A TIMELY WRITTEN PROTEST BY ANOTHER INTERESTED BIDDER. 41 COMP. GEN. 252. A CONTRACT AWARDED IN GOOD FAITH ON THE BASIS OF A BIDDER'S STATEMENT THAT IT QUALIFIES AS A SMALL BUSINESS CONCERN IS NOT VOID AB INITIO, BUT IS VOIDABLE ONLY AT THE OPTION OF THE GOVERNMENT. OTIS STEEL PRODUCTS CORPORATION V. UNITED STATES, 316 F.2D 937; 41 COMP. GEN. 252.

UNDER THE FACTS IN THIS CASE WE HAVE NO HESITANCY IN CONCLUDING THAT MAYTAG'S SELF-CERTIFICATION WAS FULLY JUSTIFIED ON THE DATE OF THE AWARD SINCE SBA HAD MADE A SIZE DETERMINATION LESS THAN TWO MONTHS PRIOR THERETO. WE SHOULD LIKE TO POINT OUT FURTHER THAT BY LETTER DATED JUNE 5, 1964, THE SMALL BUSINESS ADMINISTRATION HAS ADVISED US THAT MAYTAG AIRCRAFT IS A SMALL BUSINESS CONCERN FOR THE PURPOSE OF BIDDING ON TRUCKING CONTRACTS.

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 AS SMALL BUSINESS CONCERNS. THIS 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 ABOVE NOTED, MAYTAG HAS BEEN DETERMINED TO BE A SMALL BUSINESS CONCERN. UNDER THE PROVISIONS OF 15 U.S.C. 637 (B) (6) SUCH DETERMINATION IS CONCLUSIVE. IN VIEW THEREOF, WE FIND NO VALID BASIS FOR OBJECTING TO THE AWARD. YOUR PROTEST IS THEREFORE DENIED.