B-154252, SEP. 28, 1964

B-154252: Sep 28, 1964

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FOUR BIDS WERE RECEIVED AND OPENED ON APRIL 2. THE BID OF THE LOW BIDDER WAS REJECTED ON THE BASIS OF NONRESPONSIBILITY SINCE IT WAS UNABLE TO FURNISH THE REQUIRED PERFORMANCE BOND. YOUR BID WAS THE NEXT LOWEST. YOU WERE DETERMINED NOT TO BE AN ELIGIBLE SMALL BUSINESS FOR PURPOSES OF THIS PROCUREMENT PURSUANT TO SECTION 121.3-5 (B) (3) OF THE SMALL BUSINESS SIZE STANDARDS REGULATION. AWARD WAS MADE ON APRIL 29. YOU PROTESTED TO THE PROCUREMENT AGENCY THAT AWARD SHOULD NOT HAVE BEEN MADE TO PENNSYLVANIA NORTHEAST SINCE IT DID NOT QUALIFY AS A SMALL BUSINESS CONCERN BECAUSE OF ITS AFFILIATIONS WITH OTHER FIRMS. UNDER PARAGRAPH 1-703 (B) (1) OF THE ARMED SERVICES PROCUREMENT REGULATION THIS PROTEST COULD NOT BE CONSIDERED BY THE PROCUREMENT AGENCY SINCE IT WAS RECEIVED AFTER AWARD.

B-154252, SEP. 28, 1964

TO NATIONAL LAUNDRY AND LINEN SERVICE, INC.:

BY LETTER DATED MAY 20, 1964, WITH ENCLOSURES, AND SUBSEQUENT CORRESPONDENCE, YOU PROTESTED AGAINST THE AWARD OF A CONTRACT BY ANDREWS AIR FORCE BASE, DEPARTMENT OF THE AIR FORCE, TO THE PENNSYLVANIA NORTHEAST LAUNDRY CORPORATION UNDER SMALL BUSINESS SET ASIDE INVITATION FOR BIDS NO. 49-642-64-52, ISSUED ON MARCH 3, 1964, FOR LAUNDRY, DRY CLEANING, DYEING AND REDYEING ITEMS FOR THE HOSPITAL AT THE AIR BASE.

FOUR BIDS WERE RECEIVED AND OPENED ON APRIL 2, 1964. THE BID OF THE LOW BIDDER WAS REJECTED ON THE BASIS OF NONRESPONSIBILITY SINCE IT WAS UNABLE TO FURNISH THE REQUIRED PERFORMANCE BOND. YOUR BID WAS THE NEXT LOWEST. HOWEVER, THE SMALL BUSINESS ADMINISTRATION (SBA) ADVISED YOU ON APRIL 22, 1964, THAT SINCE YOU DID NOT PROPOSE TO FILE INFORMATION CONCERNING YOUR SMALL BUSINESS STATUS, YOU WERE DETERMINED NOT TO BE AN ELIGIBLE SMALL BUSINESS FOR PURPOSES OF THIS PROCUREMENT PURSUANT TO SECTION 121.3-5 (B) (3) OF THE SMALL BUSINESS SIZE STANDARDS REGULATION. AWARD WAS MADE ON APRIL 29, 1964, TO PENNSYLVANIA NORTHEAST AS THE LOWEST SMALL BUSINESS BIDDER. ON APRIL 30, 1964, YOU PROTESTED TO THE PROCUREMENT AGENCY THAT AWARD SHOULD NOT HAVE BEEN MADE TO PENNSYLVANIA NORTHEAST SINCE IT DID NOT QUALIFY AS A SMALL BUSINESS CONCERN BECAUSE OF ITS AFFILIATIONS WITH OTHER FIRMS. UNDER PARAGRAPH 1-703 (B) (1) OF THE ARMED SERVICES PROCUREMENT REGULATION THIS PROTEST COULD NOT BE CONSIDERED BY THE PROCUREMENT AGENCY SINCE IT WAS RECEIVED AFTER AWARD. HOWEVER, SBA WAS REQUESTED BY THE PROCUREMENT AGENCY TO MAKE A SIZE DETERMINATION WITH RESPECT TO THE CONTRACTOR. ON MAY 12, 1964, YOU WERE INFORMED BY THE SBA PHILADELPHIA REGIONAL OFFICE THAT PENNSYLVANIA NORTHEAST WAS AN ELIGIBLE SMALL BUSINESS CONCERN AT THAT TIME.

SECTION 8 (B) (6) OF THE SMALL BUSINESS ACT, AS AMENDED, 15 U.S.C. 637 (B) (6), EMPOWERS AND DIRECTS SBA TO DETERMINE WITHIN ANY INDUSTRY THE CONCERNS WHICH ARE TO BE DESIGNATED SMALL BUSINESS CONCERNS FOR THE PURPOSES OF EFFECTUATING THE PROVISIONS OF THE ACT, AND FURTHER PROVIDES THAT THE PROCUREMENT AGENCIES SHALL ACCEPT THIS DETERMINATION AS CONCLUSIVE. SEE ALSO 13 CFR 121.3. IN VIEW THEREOF, THERE IS NO LEGAL BASIS TO OBJECT TO THE AWARD AS MADE. SEE 42 COMP. GEN. 108; 41 ID. 47; ID. 252; 40 ID. 550.

WITH RESPECT TO YOUR SUGGESTION THAT JACK AND SARA BROOKS MAY NOT BE THE ACTUAL OWNERS OF PENNSYLVANIA NORTHEAST'S VOTING STOCK BUT THAT THEY WERE MERELY NOMINEES OF MR. MORRIS C. GOLDBERG, WHO ALLEGEDLY OWNED SEVERAL LAUNDRIES, WE ARE ADVISED BY SBA THAT ITS EXAMINATION OF THE RECORDS OF THE UNITED STATES DISTRICT COURT IN PHILADELPHIA REVEALED THE FOLLOWING NFORMATION:

"THE U.S. GOVERNMENT'S FORECLOSURE ACTION FILED ON MAY 22, 1964, NAMED PENNSYLVANIA-NORTHEAST LAUNDRY CORPORATION, JACK BROOKS AND SARA BROOKS AMONG THE DEFENDANTS, AND ALLEGED THAT MORRIS C. GOLDBERG HAD A BENEFICIAL INTEREST IN THE FIRM. THE ANSWER FILED BY THE PENNSYLVANIA NORTHEAST LAUNDRY CORPORATION ON JUNE 16, 1964 LISTED JACK BROOKS AND SARA BROOKS ON SOLE OWNERS OF THE CORPORATION, AND MADE A GENERAL DENIAL OF ALL ALLEGATIONS THAT MORRIS C. GOLDBERG HAD AN INTEREST IN THE FIRM. THERE HAS BEEN NO HEARING ON THE MERITS OF THIS POINT, AND JACK BROOKS, SARA BROOKS, AND THE PENNSYLVANIA-NORTHEAST LAUNDRY CORPORATION ARE STILL DEFENDANTS IN THE CASE.

"ON JUNE 2, 1964, PENNSYLVANIA-NORTHEAST LAUNDRY CORPORATION FILED A PETITION IN THE FEDERAL BANKRUPTCY COURT SEEKING RE-ORGANIZATION UNDER CHAPTER X OF THE BANKRUPTCY ACT. THE PETITION AVERRED THAT JACK BROOKS AND SARA BROOKS HELD ALL OF THE CAPITAL STOCK OF THE CORPORATION. ON JUNE 22, 1964, THE PETITIONER FILED WITH THE COURT A LIST OF ALL UNSECURED CREDITORS, SECURED CREDITORS AND STOCK HOLDERS. MORRIS C. GOLDBERG WAS NOT LISTED AS A CREDITOR JACK BROOKS AND SARA BROOKS WERE AGAIN LISTED AS HOLDING 100 PERCENT OF THE STOCK OF THE CORPORATION. * * *" ..END :