B-154453, OCT. 6, 1964

B-154453, OCT. 6, 1964

TO ROYAL SERVICES, INC.:

FURTHER REFERENCE IS MADE TO YOUR ATTORNEY'S LETTER OF JUNE 11, 1964, WITH ENCLOSURES, PROTESTING, ON YOUR BEHALF, AGAINST THE AWARD OF ANY CONTRACT UNDER INVITATION NO. 08-606-64-244, ISSUED BY THE PATRICK AIR FORCE BASE, FLORIDA, AND AGAINST THE SIZE DETERMINATIONS MADE BY THE SMALL BUSINESS ADMINISTRATION, SIZE STANDARDS DIVISION, IN REGARD TO THE SIZE STATUS OF AMCOR, C., AND MAINTENANCE INCORPORATED.

THE INVITATION REQUESTED BIDS FOR FURNISHING CUSTODIAL SERVICES AT THE PATRICK AIR FORCE BASE DURING THE PERIOD BEGINNING JULY 1, 1964, AND ENDING JUNE 30, 1965. THE PROCUREMENT WAS RESTRICTED TO SMALL BUSINESS CONCERNS ONLY. SIX BIDS WERE RECEIVED AND OPENED ON MAY 25, 1964. MAINTENANCE INCORPORATED SUBMITTED THE LOWEST BID FOR THE REQUIRED SERVICES AND THAT FIRM, ON THE FACE OF THE BID FORM, CERTIFIED ITSELF AS A SMALL BUSINESS CONCERN. THE SECOND LOWEST BID WAS SUBMITTED BY HALSIL PRODUCTS COMPANY, INC.; THE THIRD LOWEST BID WAS SUBMITTED BY AMCOR, INC.; AND THE FOURTH LOWEST BID WAS SUBMITTED BY YOUR FIRM.

BY TELEGRAM DATED MAY 26, 1964, ADDRESSED TO THE CONTRACTING OFFICER, AMCOR, INC., THE THIRD LOWEST BIDDER, PROTESTED AGAINST AN AWARD TO MAINTENANCE INCORPORATED ON THE BASIS THAT IT WAS NOT A SMALL BUSINESS FIRM QUALIFIED FOR AWARD BECAUSE THE GROSS RECEIPTS OF THAT FIRM AND ITS AFFILIATES HAVE EXCEEDED THE ONE MILLION DOLLAR ANNUAL AVERAGE OVER THE PAST THREE FISCAL YEARS. BY LETTER DATED MAY 27, 1964, YOUR ATTORNEYS ADVISED THE CONTRACTING OFFICER THAT YOUR FIRM WAS ALSO PROTESTING AGAINST AN AWARD TO MAINTENANCE INCORPORATED FOR THE SAME REASON AS EXPRESSED IN AMCOR'S PROTEST AND, ALSO, FOR THE REASON THAT SUCH FIRM WAS DETERMINED LAST YEAR TO BE A LARGE BUSINESS CONCERN. IN VIEW OF THE PROTESTS RECEIVED FROM YOUR FIRM AND AMCOR, INC., THE CONTRACTING OFFICER REQUESTED SIZE DETERMINATIONS OF MAINTENANCE INCORPORATED AND AMCOR, INC., OF THE SMALL BUSINESS ADMINISTRATION (SBA). ON JUNE 8, 1964, THE SBA NOTIFIED THE CONTRACTING OFFICER THAT ITS REGIONAL OFFICE IN ATLANTA, GEORGIA, HAD DETERMINED THAT MAINTENANCE INCORPORATED AND AMCOR, INC., WERE SMALL BUSINESS CONCERNS FOR PURPOSES OF THIS PROCUREMENT. THE RECORD INDICATES THAT BY LETTER DATED JUNE 10, 1964, YOUR FIRM REQUESTED THE SBA TO RECONSIDER ITS DETERMINATION THAT MAINTENANCE INCORPORATED AND AMCOR, INC., WERE SMALL BUSINESS CONCERNS FOR PURPOSES OF THIS PROCUREMENT. LETTER DATED JUNE 11, 1964, TO OUR OFFICE, YOU REQUESTED THAT WE INVESTIGATE THE SMALL BUSINESS SIZE STATUS OF MAINTENANCE INCORPORATED AND AMCOR, INC. BY LETTER DATED JUNE 29, 1964, THE SBA SIZE STANDARDS DIVISION, WASHINGTON, D.C., ADVISED YOUR FIRM THAT IT HAD REVIEWED THE DETERMINATION OF ITS ATLANTA REGIONAL OFFICE THAT MAINTENANCE INCORPORATED WAS A SMALL BUSINESS CONCERN FOR THE PURPOSES OF BIDDING ON GOVERNMENT SERVICES CONTRACTS AND THAT IT CONCURRED IN THE DETERMINATION MADE BY THAT OFFICE. IT IS REPORTED THAT AFTER ASCERTAINING THE SBA RULING ON MAINTENANCE INCORPORATED AND BECAUSE OF THE URGENT REQUIREMENT FOR THE SERVICES, THE PROCUREMENT ACTIVITY WAS AUTHORIZED ON JUNE 29, 1964, TO PROCEED WITH THE AWARD. ON JUNE 30, 1964, CONTRACT NO. AF 08/606/-6606 WAS AWARDED TO MAINTENANCE INCORPORATED.

THE RECORD SHOWS THAT THE SIZE DETERMINATIONS MADE BY THE DIRECTOR, SIZE STANDARDS DIVISION, SBA, ON BOTH MAINTENANCE INCORPORATED AND AMCOR, INC., WERE APPEALED BY YOUR FIRM TO THE SBA SIZE APPEALS BOARD. BY FINDINGS AND DECISION DATED AUGUST 11, 1964, THE SBA SIZE APPEALS BOARD DETERMINED THAT AMCOR, INC., WAS A SMALL BUSINESS FIRM FOR PURPOSES OF BIDDING ON GOVERNMENT SERVICES CONTRACTS. BY A FINDINGS AND DECISION OF AUGUST 17, 1964, THE SIZE APPEALS BOARD DETERMINED THAT MAINTENANCE INCORPORATED WAS NOT A SMALL BUSINESS CONCERN FOR PURPOSES OF BIDDING ON GOVERNMENT SERVICES CONTRACTS.

SINCE AWARD OF THE CONTRACT TO MAINTENANCE INCORPORATED WAS MADE ON THE BASIS OF TWO SBA DETERMINATIONS THAT SUCH FIRM WAS A SMALL BUSINESS CONCERN, THE PRIMARY QUESTION FOR CONSIDERATION IS WHETHER THE THIRD DETERMINATION MADE BY THE SBA SIZE APPEALS BOARD AFTER AWARD THAT MAINTENANCE INCORPORATED WAS NOT A SMALL BUSINESS CONCERN PRIOR TO AWARD RENDERED THE RESULTING CONTRACT A NULLITY.

PARAGRAPH 1-703 OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDES AS FOLLOWS:

"1-703DETERMINATION OF STATUS AS SMALL BUSINESS CONCERN.

"/A) EXCEPT AS PROVIDED IN (B) BELOW, THE CONTRACTING OFFICER SHALL ACCEPT AT FACE VALUE FOR THE PARTICULAR PROCUREMENT INVOLVED, A REPRESENTATION BY THE BIDDER OR OFFEROR THAT IT IS A SMALL BUSINESS CONCERN (SEE 1-701.1).

"/B) REPRESENTATION BY A BIDDER OR OFFEROR THAT IT IS A SMALL BUSINESS CONCERN SHALL BE EFFECTIVE, EVEN THOUGH QUESTIONED IN ACCORDANCE WITH THE TERMS OF THIS SUBPARAGRAPH (B), UNLESS THE SBA, IN RESPONSE TO SUCH QUESTION AND PURSUANT TO THE PROCEDURES IN (3) BELOW, DETERMINES THAT THE BIDDER OR OFFEROR IN QUESTION IS NOT A SMALL BUSINESS CONCERN. THE CONTROLLING POINT IN TIME FOR A DETERMINATION CONCERNING THE SIZE STATUS OF A QUESTIONED BIDDER OR OFFEROR SHALL BE THE DATE OF AWARD, EXCEPT THAT NO BIDDER OR OFFEROR SHALL BE ELIGIBLE FOR AWARD AS A SMALL BUSINESS CONCERN UNLESS HE HAS IN GOOD FAITH REPRESENTED HIMSELF AS SMALL BUSINESS PRIOR TO THE OPENING OF BIDS OR CLOSING DATE FOR SUBMISSION OF OFFERS (SEE 2-405 (II) WITH RESPECT TO MINOR INFORMALITIES AND IRREGULARITIES IN BIDS).

"/1) ANY BIDDER OR OFFEROR MAY, PRIOR TO AWARD, QUESTION THE SMALL BUSINESS STATUS OF ANY APPARENTLY LOW BIDDER OR OFFEROR BY SENDING A WRITTEN PROTEST TO THE CONTRACTING OFFICER RESPONSIBLE FOR THE PARTICULAR PROCUREMENT. ANY CONTRACTING OFFICER WHO RECEIVES SUCH A PROTEST OR WHO WISHES TO QUESTION THE SMALL BUSINESS STATUS OF A BIDDER OR OFFEROR HIMSELF SHALL FORWARD SUCH PROTEST RECORD (OR SUBMIT A WRITTEN PROTEST) TO THE SMALL BUSINESS ADMINISTRATION REGIONAL OFFICE SERVING THE AREA IN WHICH THE PROTESTED CONCERN IS LOCATED. THE SMALL BUSINESS ADMINISTRATION WILL PROMPTLY NOTIFY THE CONTRACTING OFFICER OF THE DATE OF ITS RECEIPT OF ANY SUCH PROTEST AND WILL ADVISE THE QUESTIONED BIDDER OR OFFEROR THAT HIS SMALL BUSINESS STATUS IS UNDER REVIEW. THE PROTEST SHALL CONTAIN THE BASIS FOR THE PROTEST TOGETHER WITH SPECIFIC DETAILED EVIDENCE SUPPORTING THE PROTESTANT'S CLAIM THAT SUCH BIDDER IS NOT A SMALL BUSINESS. PROTEST RECEIVED AFTER AWARD OF A CONTRACT WILL NOT BE CONSIDERED A "PROTEST" AND WILL BE RETURNED TO THE SENDER WITH AN EXPLANATION OF WHY IT COULD NOT BE ACTED UPON.

"/2) A CONTRACTING OFFICER MAY, PRIOR TO AWARD, QUESTION THE SMALL BUSINESS STATUS OF THE APPARENTLY SUCCESSFUL BIDDER OR OFFEROR BY SENDING A WRITTEN NOTICE TO THE SBA REGIONAL OFFICE OF THE REGION IN WHICH THE BIDDER OR OFFEROR HAS HIS PRINCIPAL PLACE OF BUSINESS. SUCH NOTICE SHALL CONTAIN A STATEMENT OF THE BASIS FOR QUESTIONING AND OF AVAILABLE SUPPORTING FACTS. SBA WILL PROMPTLY NOTIFY THE CONTRACTING OFFICER OF THE DATE SUCH NOTICE WAS RECEIVED AND WILL ADVISE THE BIDDER OR OFFEROR IN QUESTION THAT HIS SMALL BUSINESS STATUS IS UNDER REVIEW.

"/3) SBA WILL DETERMINE THE SMALL BUSINESS STATUS OF THE QUESTIONED BIDDER OR OFFEROR AND NOTIFY THE CONTRACTING OFFICER AND THE BIDDER OR OFFEROR OF ITS DECISION. IF THE SBA DETERMINATION IS NOT RECEIVED BY THE CONTRACTING OFFICER WITHIN TEN WORKING DAYS AFTER SBA'S RECEIPT OF THE PROTEST OR NOTICE QUESTIONING SMALL BUSINESS STATUS, IT SHALL BE PRESUMED THAT THE QUESTIONED BIDDER OR OFFEROR IS A SMALL BUSINESS CONCERN. THIS PRESUMPTION WILL NOT BE USED AS A BASIS FOR MAKING AN AWARD TO THE QUESTIONED BIDDER OR OFFEROR WITHOUT FIRST ASCERTAINING WHEN A SIZE DETERMINATION CAN BE EXPECTED FROM SBA AND, WHERE PRACTICABLE, WAITING FOR SUCH DETERMINATION, UNLESS FURTHER DELAY IN AWARD WOULD BE DISADVANTAGEOUS TO THE GOVERNMENT. PENDING SBA DETERMINATION OR EXPIRATION OF THE TEN-DAY PERIOD, WHICHEVER IS EARLIER, PROCUREMENT ACTION SHALL BE SUSPENDED PROVIDED THAT SUCH TEN DAY SUSPENSION PERIOD SHALL NOT APPLY TO ANY URGENT PROCUREMENT ACTION WHICH, AS DETERMINED BY THE CONTRACTING OFFICER, MUST, IN ORDER TO PROTECT THE PUBLIC INTEREST, BE AWARDED WITHOUT DELAY AND AS TO WHICH HE INSERTS IN THE CONTRACT FILE A STATEMENT SIGNED BY HIM JUSTIFYING THIS DETERMINATION.'

UNDER THESE REGULATIONS A SMALL BUSINESS SELF-CERTIFICATION MADE IN GOOD FAITH IS EFFECTIVE, EVEN THOUGH QUESTIONED, UNLESS THE SBA DETERMINES, AS PROVIDED IN SUBPARAGRAPH (B) (3), ABOVE, THAT THE QUESTIONED BIDDER IS NOT A SMALL BUSINESS CONCERN. THE RECORD BEFORE US DOES NOT INDICATE THAT THE CERTIFICATION MADE BY MAINTENANCE INCORPORATED WAS IMPRUDENT AND LACKING IN GOOD FAITH. THE RECORD ALSO SHOWS THAT PRIOR TO THE TIME OF THE AWARD, THE SBA ON TWO OCCASIONS DETERMINED THAT MAINTENANCE INCORPORATED WAS A SMALL BUSINESS CONCERN. SIZE DETERMINATIONS OR CERTIFICATIONS BY THE SBA REMAIN EFFECTIVE UNTIL REVOKED. OTIS STEEL PRODUCTS CORPORATION V. UNITED STATES, 316 F.2D 937. IT IS ALSO NOTED THAT THE SBA SIZE APPEALS BOARD DID NOT DETERMINE THAT MAINTENANCE INCORPORATED WAS A LARGE BUSINESS CONCERN UNTIL AUGUST 17, 1964, OR 48 DAYS AFTER AWARD OF THE CONTRACT. THEREFORE, AT THE TIME OF THE AWARD THE ONLY SBA DETERMINATION OF WHICH THE CONTRACTING OFFICE WAS AWARE WAS THAT MAINTENANCE INCORPORATED WAS A SMALL BUSINESS CONCERN. THUS, THE AWARD WAS MADE STRICTLY IN ACCORDANCE WITH THE APPLICABLE REGULATIONS. UNDER THESE CIRCUMSTANCES, WE FEEL THAT IT WOULD NOT BE IN THE GOVERNMENT'S BEST INTEREST TO REQUIRE CANCELLATION OF THE CONTRACT. COMPARE 41 COMP. GEN. 252 WHERE WE HELD THAT A CONTRACT AWARDED ON THE BASIS OF A PREAWARD DETERMINATION BY THE SBA TO THE EFFECT THAT THE SUCCESSFUL BIDDER WAS A SMALL BUSINESS CONCERN WOULD NOT BE DISTURBED WHERE, SUBSEQUENT TO AWARD, THE SBA DETERMINED THAT THE BIDDER WAS NOT A SMALL BUSINESS AT THE TIME AWARD WAS MADE.

ACCORDINGLY, YOUR PROTEST AGAINST THE AWARD OF CONTRACT NO. AF 08/606/- 6606 TO MAINTENANCE INCORPORATED IS DENIED.