B-154326, SEP. 16, 1964

B-154326, SEP. 16, 1964

TO SELLERS, CONNER AND CUNEO:

REFERENCE IS MADE TO YOUR LETTERS DATED JULY 6 AND AUGUST 18, 1964, RELATIVE TO THE PROTEST OF WOOD STRUCTURE MAINTENANCE, INCORPORATED, AND ASSOCIATES, SEATTLE, WASHINGTON, AGAINST THE REJECTION OF THEIR PROPOSAL AND AWARD OF A CONTRACT TO DATRONICS ENGINEERS UNDER REQUEST FOR PROPOSALS NO. 03-63896-64, ISSUED ON APRIL 9, 1964, BY THE COMMANDER, THIRD COAST GUARD DISTRICT.

THE REQUEST FOR PROPOSALS WAS BASED UPON A REQUIREMENT FOR REHABILITATION OF FOUR 625-FOOT LORAN "C" ANTENNA TOWERS IN ITALY, TURKEY, LIBYA, AND SPAIN WITH THE USE OF GOVERNMENT-FURNISHED MATERIALS. IT WAS CONTEMPLATED THAT THIS WORK WOULD BE COMPLETED OR SUBSTANTIALLY COMPLETED DURING TIME LIMITS SET BY THE DEPARTMENT OF DEFENSE FOR DE-ENERGIZING THE TOWERS, FROM JUNE 10 TO JUNE 30, 1964, FOR THE LIBYAN TOWER AND FROM JUNE 20 TO JUNE 30 FOR THE THREE REMAINING TOWERS. PROSPECTIVE OFFERORS WERE ADVISED THAT AFTER JUNE 30 ANY WORK ON THE TOWERS WOULD BE PERFORMED WITH THE TOWERS "HOT" EXCEPT ONLY FOR INTERVALS TO PERMIT PERSONNEL TO MOUNT AND LEAVE THEM.

PROPOSALS WERE ORIGINALLY SCHEDULED FOR PUBLIC OPENING ON MAY 1, 1964, BUT THE OPENING DATE WAS CHANGED TO MAY 8 IN VIEW OF MODIFICATIONS MADE IN THE REQUEST FOR PROPOSALS BY AMENDMENT NO. 2 DATED APRIL 27, 1964. UPON ANALYSIS OF THE EIGHT PROPOSALS RECEIVED, IT APPEARED THAT THE PROPOSAL SUBMITTED IN THE NAME OF WOOD STRUCTURE MAINTENANCE, INCORPORATED, AND ASSOCIATES, SIGNED BY MR. CLEM PILIP AS MANAGER, WAS THE LOWEST AS TO PRICE ALTHOUGH SUCH PROPOSAL CONTAINED NUMEROUS CLERICAL ERRORS. THE PROPOSAL OF DATRONICS ENGINEERS WAS THE LOWEST OF THE SEVEN REMAINING PROPOSALS AND IT WAS CONSIDERED TO BE THE SECOND LOWEST OF THE EIGHT PROPOSALS RECEIVED WHEN ON MAY 18, 1964, MR. PILIP VISITED THE THIRD COAST GUARD DISTRICT OFFICE IN NEW YORK AND SUBMITTED A CORRECTED LUMP-SUM PROPOSAL OF $51,711.80.

THE CONTRACTING OFFICER EVENTUALLY DETERMINED THAT MR. PILIP HAD NOT SUBMITTED SUFFICIENT EVIDENCE OF HIS ABILITY TO PERFORM WITHIN THE TIME LIMITS SET BY THE DEPARTMENT OF DEFENSE FOR DE-ENERGIZING THE TOWERS. THERE ARE ALSO INVOLVED QUESTIONS AS TO WHETHER THE CONTRACT SHOULD HAVE BEEN AWARDED TO MR. PILIP'S COMPANY AND ITS ASSOCIATES IF MR. PILIP HAD FURNISHED A PERFORMANCE BOND OR COMMITMENT THEREFOR IN ACCORDANCE WITH THE REQUEST MADE DURING THE COURSE OF THE INVESTIGATION AND AS TO WHETHER MR. PILIP'S COMPANY AND ITS ASSOCIATES COULD QUALIFY AS A RESPONSIBLE CONTRACTOR FOR THE PARTICULAR WORK.

AS INDICATED IN YOUR LETTER OF JULY 6, 1964, THE CONTRACTING OFFICER BELIEVED THAT THE AWARD SHOULD NOT BE MADE TO YOUR CLIENT FOR SUBSTANTIALLY THE FOLLOWING STATED REASONS: (1) PROTESTANT HAD NO ACTIVE ORGANIZATION; (2) NO PLAN EXISTED AS TO THE METHOD BY WHICH FOREIGN EMPLOYEES WOULD BE OBTAINED; (3) PROTESTANT HAD NEVER PERFORMED IN A FOREIGN COUNTRY AND WAS NOT FAMILIAR WITH DOING BUSINESS INTERNATIONALLY; (4) THE FINANCIAL INFORMATION SUBMITTED WAS NOT CERTIFIED NOR INDEPENDENTLY VERIFIED AND IN ANY EVENT WAS NOT CONVINCING; (5) A DUN AND BRADSTREET REPORT OF MARCH 1964 INDICATED THAT PROTESTANT HAD NO ACTIVE CONTRACTS; (6) PROTESTANT DID NOT PROVIDE A PERFORMANCE BOND; AND (7) THERE WERE NUMEROUS ERRORS IN PROTESTANT'S PROPOSAL INDICATING A LACK OF RESPONSIBILITY.

YOU SUGGESTED THAT ALL OF THESE REASONS FOR REJECTION OF YOUR CLIENT'S PROPOSAL RELATE TO ELEMENTS OF RESPONSIBILITY IN THE CATEGORIES OF "CAPACITY" AND "CREDIT" AND, SINCE YOUR CLIENT IS SMALL BUSINESS, THE AWARD ACTION MAY HAVE BEEN IMPROPER BECAUSE THE PROPOSED ADMINISTRATIVE REJECTION OF THE PROPOSAL WAS NOT REFERRED TO THE SMALL BUSINESS ADMINISTRATION IN ACCORDANCE WITH THE GENERAL REQUIREMENT OF SUBSECTION 1- 1.708-2, FEDERAL PROCUREMENT REGULATIONS (FPR). THAT SUBSECTION IS DESIGNED TO ALLOW A MAXIMUM OF 15 DAYS FOR THE SMALL BUSINESS ADMINISTRATION TO DECIDE IN A PARTICULAR CASE WHETHER OR NOT TO ISSUE A CERTIFICATE OF COMPETENCY WHICH WOULD, UNDER THE LAW, BE CONCLUSIVE ON THE CONTRACTING AGENCY IN A DETERMINATION OF THE SMALL BUSINESS FIRM'S RESPONSIBILITY INSOFAR AS THE ELEMENTS OF CAPACITY AND CREDIT, INVOLVED IN ANY SUCH DETERMINATION, MIGHT BE CONCERNED. HOWEVER, AS YOU POINTED OUT, THE REGULATION DOES NOT REQUIRE REFERRAL TO THE SMALL BUSINESS ADMINISTRATION WHERE AN AWARD MUST BE MADE WITHOUT DELAY AND THE CONTRACTING OFFICER INCLUDES IN THE CONTRACT FILE A STATEMENT BY HIM WHICH JUSTIFIES IMMEDIATE ACTION.

YOU STATED THAT ALL OF THE INFORMATION OBTAINED FROM THE THIRD COAST GUARD DISTRICT WITH RESPECT TO THE PROTESTANT'S PRIOR PERFORMANCE UNDER SIMILAR CONTRACTS, AND ITS REPUTATION AND ABILITY IN GENERAL, WAS FAVORABLE; THAT VERY COMPLIMENTARY RECOMMENDATIONS ON BEHALF OF THE PROTESTANT WERE RECEIVED FROM NUMEROUS SOURCES; THAT A SIMILAR CONTRACT HAD BEEN PERFORMED BY THE PROTESTANT IN A SATISFACTORY MANNER; AND THAT THE CONTRACTING OFFICER'S OWN ADVISERS ADVISED HER THAT THE PROTESTANT'S PROPOSED METHOD OF RECRUITING PERSONNEL IN EUROPE WAS FEASIBLE. YOU THEREFORE SUGGESTED THAT THERE EXISTED NO INFORMATION UPON WHICH A DETERMINATION OF LACK OF CAPACITY OR CREDIT COULD HAVE BEEN BASED. ALSO, YOU STATED THAT THE CONTRACT FILE SUBMITTED BY THE COAST GUARD CONTAINS NO STATEMENT FROM THE CONTRACTING OFFICER WHICH MENTIONS THE CITED EXCEPTION TO THE SMALL BUSINESS REFERRAL REQUIREMENT OF THE FEDERAL PROCUREMENT REGULATIONS OR FURNISHES INFORMATION TO THE EFFECT THAT A COPY OF THE CONTRACTING OFFICER'S DETERMINATION TO MAKE AN AWARD WITHOUT SUCH REFERRAL WAS GIVEN TO THE SMALL BUSINESS ADMINISTRATION'S REPRESENTATIVE.

WE OBTAINED A SUPPLEMENTAL REPORT FROM THE COAST GUARD AND THERE WAS SUBSEQUENTLY RECEIVED YOUR LETTER DATED AUGUST 18, 1964, ENCLOSING A LETTER DATED AUGUST 10, 1964, FROM MR. PILIP, CONCERNING THE MATTER OF THE REQUESTED PERFORMANCE BOND OR COMMITMENT THEREFOR. MR. PILIP ALLEGES THAT HE WAS ADVISED IN THE FIRST INSTANCE THAT NO BOND WOULD BE REQUIRED; THAT IT WAS NOT UNTIL THE AFTERNOON OF MAY 18 THAT HE LEARNED THAT A BOND WOULD BE REQUIRED, AND THAT THE DEADLINE FOR MEETING THE REQUIREMENT WAS 11 A.M., MAY 21; THAT ON MAY 20 HIS COMPANY WIRED THE COAST GUARD THAT A BOND WOULD BE FORTHCOMING; AND THAT ON MAY 21 THE COMPANY WAS ADVISED BY TELEGRAM THAT, DUE TO TIME RESTRICTIONS FOR COMPLETION OF THE WORK AND ITS FAILURE TO RESPOND BY THE TIME SET, ITS PROPOSAL WAS REJECTED. MR. PILIP CONTENDED THAT HE WAS NOT GIVEN SUFFICIENT TIME TO OBTAIN A BOND, CONSIDERING THAT HIS BONDING COMPANY IS A SEATTLE CONCERN, AND THAT THE COAST GUARD COULD HAVE HAD NO SERIOUS DOUBTS AS TO HIS ABILITY TO OBTAIN A BOND AFTER RECEIPT OF A LETTER DATED MAY 12, 1964, FROM THE BONDING COMPANY, CONCERNING MR. PILIP'S GENERAL REPUTATION AND FINANCIAL RESPONSIBILITY.

THE ALLEGATIONS MADE BY MR. PILIP REGARDING THE TIME A PERFORMANCE BOND WAS FIRST REQUESTED ARE CONTRARY TO THE INFORMATION SET FORTH IN STATEMENTS BY THE CONTRACTING OFFICER IN REPORTS OF MEETINGS WITH MR. PILIP ON MAY 18 AND 20 AT THE THIRD COAST GUARD DISTRICT OFFICE IN NEW YORK AND IN A REPORT OF A TELEPHONE CONVERSATION WITH MR. PILIP ON MAY 13. ACCORDING TO SUCH STATEMENTS, WHICH APPARENTLY WERE PREPARED IN EACH CASE WITHIN RELATIVELY SHORT PERIODS OF TIME AFTER THE TELEPHONE CALL AND THE MEETINGS TOOK PLACE, MR. PILIP WAS ASKED IN THE COURSE OF THE TELEPHONE CALL OF MAY 13 IF HE COULD FURNISH A PERFORMANCE BOND AND AT THE MEETING OF MAY 18 HE ADMITTED THAT HE WAS UNABLE TO GET A BOND FROM THE BROKER WHOSE LETTER OF MAY 12 ENDORSED HIS COMPANY. MR. PILIP EVIDENTLY ATTEMPTED TO OBTAIN A BOND IN NEW YORK SINCE IT IS REPORTED IN CONNECTION WITH THE MEETING OF MAY 20 THAT MR. PILIP HAD TELEPHONED THE COAST GUARD SEEKING INFORMATION AS TO THE NAMES OF BONDING COMPANIES WHICH WOULD BOND A JOB OUTSIDE THE UNITED STATES.

AT THE MEETING OF MAY 20, 1964, MR. PILIP REPORTEDLY WAS ADVISED THAT TOO MUCH TIME HAD ALREADY BEEN LOST IN ALLOWING HIM TO PROVE HIS ABILITY TO PERFORM, AND THAT IT WAS IMPERATIVE THAT THE CONTRACT AWARD BE DELAYED NO LONGER; ALSO THAT HE HAD NOT FURNISHED EVIDENCE OF HIS ABILITY TO OBTAIN A PERFORMANCE BOND AND TO HAVE SUFFICIENT LABOR ON HAND TO ASSURE COMPLETION OF THE REHABILITATION WORK ON THE TOWERS WITHIN THE SHORT TIME ALLOWED. MR. PILIP REQUESTED THAT HE BE GIVEN UNTIL 11 A.M., MAY 21, TO PROVE HIS ABILITY TO PERFORM THE JOB SATISFACTORILY.

ALTHOUGH THERE IS A CONFLICT IN THE TWO VERSIONS OF THE PERFORMANCE BOND MATTER, IT IS APPARENT THAT WE WOULD NOT BE WARRANTED IN TAKING THE POSITION THAT THE CONTRACTING OFFICER HAS NOT CORRECTLY SET FORTH THE PARTICULAR CIRCUMSTANCES OF THE CASE. ALSO, IT APPEARS THAT, IF THE TELEGRAM OF MAY 20 FROM HIS COMPANY HAD BEEN RECEIVED BEFORE THE MAY 21, 11 A.M., DEADLINE, IT WOULD NOT HAVE BEEN ACCEPTABLE AS SHOWING THAT HE HAD A FIRM COMMITMENT FROM HIS SEATTLE BONDING COMPANY TO PROVIDE A BOND IF REQUIRED.

IT IS ASSUMED THAT YOUR STATEMENT THAT THE CONTRACTING OFFICER DID NOT FOLLOW THE ADVICE OF HER OWN ADVISERS IS DERIVED FROM THE CONTRACTING OFFICER'S REPORT CONCERNING A TELEPHONE CALL RECEIVED ON THE MORNING OF MAY 21 FROM AN OFFICIAL AT "HEADQUARTERS, EVC" WHICH OFFICE APPARENTLY WAS FAMILIAR WITH THE TECHNICAL REQUIREMENTS OF THE PROPOSED WORK. MR. PILIP WAS STATED AS HAVING CALLED AT THAT OFFICE TO DISCUSS HIS PLAN OF OPERATION AND IT WAS REPORTED THAT THE GOVERNMENT REPRESENTATIVES AT SUCH MEETING CONSIDERED THAT MR. PILIP'S COMPANY "MIGHT BE ABLE" TO DO THE JOB IN THE MANNER PROPOSED, THAT IS, BY EMPLOYMENT OF ONLY THREE STATESIDE PERSONNEL WHO, WITH MR. PILIP, WOULD SUPERVISE THE WORK AT THE FOUR STATIONS USING LOCAL HELP TO PERFORM THE TOWER WORK. THE GOVERNMENT OFFICIAL WHO MADE THE TELEPHONE CALL REPORTEDLY WAS ASKED WHETHER HE WOULD RECOMMEND AN AWARD TO MR. PILIP'S COMPANY WITHOUT REQUIRING A PERFORMANCE BOND, AND HIS REPLY WAS THAT HE WOULD NOT CONSIDER THE AWARD WITHOUT SUCH A BOND.

THE CONTRACTING OFFICER HAS FURNISHED A STATEMENT DENYING THAT SHE FAILED TO FOLLOW THE ADVICE OF HER REGULAR ADVISERS WHO WERE INVOLVED IN THE CONSIDERATION OF THE QUALIFICATIONS OF MR. PILIP'S COMPANY. AT THE MEETINGS OF MAY 18 AND 20 THOSE ADVISERS AND THE CONTRACTING OFFICER REPORTEDLY WERE IN COMPLETE AGREEMENT ON THE PROPOSITION THAT APPROXIMATELY 15 STATESIDE PERSONNEL WOULD BE NECESSARY TO PERFORM THE WORK AT THE FOUR TOWERS IN A SATISFACTORY MANNER AND WITHIN THE TIME LIMITATIONS THEREFOR. ALSO, THE CONTRACTING OFFICER STATES THAT THE DECISION TO REJECT THE OFFER OF MR. PILIP'S COMPANY WAS FULLY COORDINATED AND CONCURRED IN BY RESPONSIBLE STAFF OFFICERS OF THE DISTRICT AND COAST GUARD HEADQUARTERS.

HAVING IN MIND THE SCOPE OF ADMINISTRATIVE DISCRETION IN SUCH MATTERS, IT APPEARS THAT THERE WAS A SUFFICIENT BASIS FOR A DETERMINATION THAT MR. PILIP'S COMPANY DID NOT QUALIFY AS A RESPONSIBLE PROSPECTIVE CONTRACTOR FOR THE PARTICULAR WORK, NOTWITHSTANDING THE FAVORABLE COMMENTS OF HIS FORMER ASSOCIATES AND THOSE OF HIS LOCAL BANK AND BONDING OR INSURANCE COMPANY, OR THE FACT THAT HE HAD PERFORMED A SIMILAR CONTRACT FOR THE GOVERNMENT AT ATTU, ALASKA, WHICH INVOLVED REHABILITATION OF A SINGLE 625- FOOT LORAN TOWER, AND WHICH WAS NOT COMPLETED ON TIME ALTHOUGH NO QUESTION WAS RAISED AS TO THE QUALITY OF HIS WORK.

WHEN MR. PILIP BID ON THE WORK HERE INVOLVED, AND EVEN WHEN HIS PROPOSAL WAS UNDER SERIOUS CONSIDERATION, HE HAD NO ACTIVE ORGANIZATION OR COMMITMENTS FROM PROSPECTIVE STATESIDE EMPLOYEES AND HE REPORTEDLY FAILED TO PRODUCE SATISFACTORY EVIDENCE CONCERNING THE ASSOCIATES WHO OSTENSIBLY WERE ALSO BIDDING ON THE JOB. THESE CIRCUMSTANCES WOULD SEEM IN THEMSELVES TO HAVE JUSTIFIED A DETERMINATION THAT MR. PILIP'S COMPANY COULD NOT BE REGARDED AS A SERVICE CONTRACTOR AS DEFINED IN FPR 1-1.214, ONE OF THE ESSENTIAL REQUIREMENTS UNDER FPR 1-1.310.5 FOR QUALIFICATION OF A BIDDER OR OFFEROR ON A SERVICE CONTRACT. NOR DOES IT APPEAR THAT AN OPINION BY ANY GOVERNMENT OFFICIAL THAT MR. PILIP "MIGHT BE ABLE" TO PERFORM IN THE MANNER HE PROPOSED WOULD HAVE BEEN SUFFICIENT TO HAVE RELIEVED THE CONTRACTING OFFICER FROM HER RESPONSIBILITY TO DETERMINE, AS REQUIRED BY FPR 1-1.310.6, THAT THE PROSPECTIVE CONTRACTOR "IS RESPONSIBLE.' IN OUR OPINION, THERE MUST BE AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY TO PERMIT A CONTRACT AWARD AND SUCH DETERMINATION MUST BE BASED UPON A REASONABLE BELIEF THAT THE PROSPECTIVE CONTRACTOR "CAN PERFORM" AS DISTINGUISHED FROM A BELIEF THAT THE BIDDER OR OFFEROR "MIGHT BE ABLE" TO PERFORM.

THE CONTRACTING OFFICER HAS INDICATED THAT UNDER THE APPLICABLE REGULATIONS NO AWARD COULD PROPERLY HAVE BEEN MADE TO MR. PILIP'S COMPANY ON THIS PROCUREMENT AND IT IS UNFORTUNATE THAT ANY INFORMATION WAS GIVEN TO MR. PILIP TO THE EFFECT THAT THE FURNISHING OF A PERFORMANCE BOND WOULD BE CONSIDERED AS PROOF OF HIS FIRM'S ABILITY TO PERFORM THE PROPOSED WORK. THE FURNISHING OF SUCH A BOND WOULD HAVE BEEN SIGNIFICANT ONLY WITH RESPECT TO PROVING MR. PILIP'S FINANCIAL RESPONSIBILITY AND INSURING THE GOVERNMENT AGAINST CERTAIN FINANCIAL LOSSES, BUT THE FURNISHING OF SUCH BOND CERTAINLY COULD NOT HAVE OVERCOME THE DOUBTS ENTERTAINED BY THE CONTRACTING OFFICER AS TO THE ABILITY OF MR. PILIP TO COMPLETE THE TOWER REHABILITATION WORK IN AN EFFICIENT AND TIMELY MANNER, WITH THE EMPLOYMENT OF A VERY LIMITED NUMBER OF STATESIDE SUPERVISORY PERSONNEL AND RECRUITMENT OF LABORERS IN EUROPE IMMEDIATELY PRIOR TO THE TIMES SET FOR COMMENCEMENT OF THE WORK AT THE FOUR SITES. THE CONCLUSION THEREFORE APPEARS TO BE REQUIRED THAT THE REJECTION OF THE PROPOSAL OF YOUR CLIENT WAS NOT ARBITRARY IN ANY RESPECT. ALSO, THERE APPEARS TO BE NO REASONABLE BASIS FOR QUESTIONING THE CONTRACTING OFFICER'S ACTION IN REQUESTING THE FURNISHING OF A PERFORMANCE BOND OR COMMITMENT THEREFOR DURING THE NEGOTIATION PROCEEDINGS WHEN DOUBTS WERE ENTERTAINED NOT ONLY WITH RESPECT TO MR. PILIP'S TECHNICAL QUALIFICATIONS, ORGANIZATION AND PROPOSED PLAN OF OPERATION BUT, ALSO, WITH RESPECT TO HIS FINANCIAL RESPONSIBILITY.

AS YOUR ASSOCIATE WAS ADVISED INFORMALLY, IT WOULD NOT HAVE BEEN PROPER FOR OUR OFFICE TO CONSIDER THE MERITS OF THE PROTEST UNLESS AND UNTIL ADDITIONAL INFORMATION WAS DEVELOPED CONCERNING THE QUESTION AS TO WHETHER ANY CONSIDERATION WAS GIVEN BY THE CONTRACTING OFFICER TO THE SMALL BUSINESS REFERRAL PROVISIONS OF THE FEDERAL PROCUREMENT REGULATIONS. THAT POINT, THE CONTRACTING OFFICER HAS INDICATED THAT THE PROPOSED REJECTION OF YOUR CLIENT'S PROPOSAL WAS NOT REFERRED TO THE SMALL BUSINESS ADMINISTRATION DUE TO THE URGENCY FOR THE MAKING OF A CONTRACT AWARD, AND THERE HAS BEEN FURNISHED A COPY OF HER LETTER DATED JUNE 17, 1964, TO THE SMALL BUSINESS ADMINISTRATION'S OFFICE IN SEATTLE, WASHINGTON, EXPLAINING THE REASONS FOR REJECTION OF THE PROPOSAL. IT IS REPORTED THAT THIS LETTER WAS SENT UPON THE REQUEST OF THE SMALL BUSINESS ADMINISTRATION'S REPRESENTATIVE IN NEW YORK WITH WHOM THE CONTRACTING OFFICER HAD DISCUSSED THE BASIS FOR REJECTION OF THE PARTICULAR PROPOSAL AND THE URGENCY FOR MAKING A CONTRACT AWARD.

ADDITIONAL INFORMATION HAS BEEN FURNISHED TO THE EFFECT THAT, ALTHOUGH THE REHABILITATION WORK AT THE FOUR TOWER SITES WAS CONTEMPLATED FOR A CONSIDERABLE LENGTH OF TIME, THE LAST SOLICITATION WAS IN EUROPE AND IT RESULTED IN THE RECEIPT OF A SINGLE BID IN MARCH 1964, WHICH WAS BELIEVED TO BE EXCESSIVE IN AMOUNT. THE THIRD COAST GUARD DISTRICT WAS DIRECTED IN APRIL 1964 TO SOLICIT PROPOSALS AND IT DOES NOT APPEAR THAT THE PREPARATION OF THE REQUEST FOR PROPOSALS OR THE CONSIDERATION OF THE PROPOSALS RECEIVED WAS DELAYED UNREASONABLY. THEREFORE, AND IN VIEW OF THE IMMINENCE OF THE PERIOD DURING WHICH THE TOWERS WERE SCHEDULED TO BE DE-ENERGIZED, IT SEEMS REASONABLY CLEAR THAT THE COAST GUARD ACTION IN THE MATTER CANNOT IN ANY MANNER BE REGARDED AS HAVING CONSTITUTED AN ATTEMPT TO CIRCUMVENT THE REQUIREMENTS OF THE SMALL BUSINESS ACT AS IMPLEMENTED BY SUBPART 1-1.7 OF THE FEDERAL PROCUREMENT REGULATIONS.

THERE IS SOME QUESTION WHETHER THE CONTRACTING OFFICER'S WRITTEN STATEMENT INCLUDED IN THE CONTRACT FILE, A COPY OF WHICH WAS FURNISHED TO THE SMALL BUSINESS ADMINISTRATION REPRESENTATIVE, MET THE REQUIREMENT FOR A STATEMENT JUSTIFYING IMMEDIATE ACTION PURSUANT TO FPR 1-1.708-2 (A) (1). HOWEVER, SINCE THE EXISTING SITUATION WOULD APPEAR TO OTHERWISE HAVE JUSTIFIED INVOKING THE EXCEPTION TO THE REQUIREMENT THAT THE MATTER BE SUBMITTED TO THE SMALL BUSINESS ADMINISTRATION, WE FIND NO BASIS TO CONCLUDE THAT THE POSSIBLE FAILURE OF THE WRITTEN STATEMENT OF JUSTIFICATION TO MEET THE STANDARDS SET BY THE REGULATION WOULD SUPPORT A DETERMINATION AT THIS TIME, THAT THE CONTRACT AWARDED SHOULD BE INVALIDATED. SEE B-146344, OCTOBER 2, 1961.

ACCORDINGLY, THE PROTEST TO OUR OFFICE IN THE MATTER MUST BE, AND IS, HEREBY DENIED.