B-154576, JULY 29, 1964, 44 COMP. GEN. 34

B-154576, JULY 29, 1964, 44 COMP. GEN. 34

CONTRACTS - AWARDS - LABOR SURPLUS AREAS - FAILURE TO FURNISH INFORMATION EFFECT UNDER AN INVITATION PROVIDING THAT RESPONSIBLE LABOR SURPLUS AREA CONCERNS SUBMITTING RESPONSIBLE BIDS ON THE NON-SET-ASIDE PORTION OF THE PROCUREMENT WHO OFFER TO PERFORM MORE THAN 50 PERCENT OF MANUFACTURING AND PRODUCTION COSTS IN PERSISTENT AND SUBSTANTIAL LABOR SURPLUS AREAS WILL QUALIFY TO NEGOTIATE IN THE FIVE PRIORITY GROUPS ESTABLISHED, A SMALL BUSINESS CONCERN, THE SECOND LOW BIDDER ON THE NON SET-ASIDE PORTION OF THE PROCUREMENT, OFFERING TO PERFORM 41 PERCENT OF COSTS IN PERSISTENT LABOR SURPLUS AREAS AND 12 PERCENT IN SUBSTANTIAL LABOR SURPLUS AREAS, WHO ALTHOUGH RESPONSIVE TO THE INVITATION ONLY FURNISHED INFORMATION FOR THE THIRD PRIORITY GROUP--- SMALL BUSINESS CONCERNS THAT WILL PERFORM IN SUBSTANTIAL LABOR SURPLUS AREAS--- MAY NOT HAVE THE INFORMATION THAT GENERAL AND ADMINISTRATIVE EXPENSES WERE INADVERTENTLY NOT CONSIDERED AS MANUFACTURING AND PRODUCTION COST ACCEPTED TO CHANGE THE CONCERN'S THIRD PRIORITY CLASSIFICATION TO THE TOP GROUP--- PERSISTENT LABOR SURPLUS AREA CONCERNS--- TO OBTAIN FIRST CONSIDERATION ELIGIBILITY, THEREBY PASSING OVER BIDDERS WHO HAD QUALIFIED IN THE PRESCRIBED MANNER.

TO THE SECRETARY OF THE ARMY, JULY 29, 1964:

REFERENCE IS MADE TO LETTER OF JUNE 26, 1964, FROM THE DEPUTY DIRECTOR, PROCUREMENT AND PRODUCTION, HEADQUARTERS, ARMY MATERIEL COMMAND, SUBMITTING FOR DECISION THE PROTEST OF POLAN INDUSTRIES, INC., AGAINST PRIOR NEGOTIATIONS WITH ANY OTHER BIDDER FOR THE LABOR SURPLUS SET-ASIDE PORTION UNDER INVITATION AMC/T/-11-184-64-300/AF/ LS.

WITH RESPECT TO THE SET-ASIDE PORTION, THE INVITATION PROVIDES THAT NEGOTIATIONS WILL BE CONDUCTED ONLY WITH RESPONSIBLE LABOR SURPLUS AREA CONCERNS (AND SMALL BUSINESS CONCERNS TO THE EXTENT INDICATED) WHO HAVE SUBMITTED RESPONSIVE BIDS OR PROPOSALS ON THE NON-SET-ASIDE PORTION AT A UNIT PRICE WITHIN 120 PERCENT OF THE HIGHEST AWARD MADE ON THE NON-SET- ASIDE PORTION IN THE FOLLOWING ORDER OF PRIORITY:

GROUP 1. PERSISTENT LABOR SURPLUS AREA CONCERNS WHICH ARE ALSO SMALL BUSINESS CONCERNS.

GROUP 2. OTHER PERSISTENT LABOR SURPLUS AREA CONCERNS.

GROUP 3. SUBSTANTIAL LABOR SURPLUS AREA CONCERNS WHICH ARE ALSO SMALL BUSINESS CONCERNS.

GROUP 4. OTHER SUBSTANTIAL LABOR SURPLUS AREA CONCERNS.

GROUP 5. SMALL BUSINESS CONCERNS WHICH ARE NOT LABOR SURPLUS AREA CONCERNS.

THE INVITATION PROVIDES FURTHER THAT WITHIN EACH OF THE ABOVE GROUPS NEGOTIATIONS WITH SUCH CONCERNS ARE TO BE CONDUCTED IN THE ORDER OF THEIR BIDS ON THE NON-SET-ASIDE PORTION, BEGINNING WITH THE LOWEST RESPONSIVE BID.

THERE IS INCLUDED IN THE INVITATION A DEFINITION OF THE TWO TYPES OF LABOR SURPLUS AREA CONCERNS. A "PERSISTENT LABOR SURPLUS AREA CONCERN" IS DEFINED AS ONE WHICH AGREES TO PERFORM, OR CAUSE TO BE PERFORMED, A SUBSTANTIAL PROPORTION OF A CONTRACT IN PERSISTENT LABOR SURPLUS AREAS. IT IS STATED FURTHER THAT A CONCERN IS DEEMED TO PERFORM A SUBSTANTIAL PROPORTION OF A CONTRACT IN SUCH AREAS IF THE COSTS WHICH THE CONCERN WILL INCUR ON ACCOUNT OF MANUFACTURING OR PRODUCTION PERFORMED IN SUCH AREAS AMOUNT TO MORE THAN 50 PERCENT OF THE CONTRACT PRICE. A "SUBSTANTIAL LABOR SURPLUS AREA CONCERN" IS DEFINED AS ONE WHICH AGREES TO PERFORM, OR CAUSE TO BE PERFORMED, A SUBSTANTIAL PROPORTION OF A CONTRACT IN SUBSTANTIAL LABOR SURPLUS AREAS. IN THAT REGARD IT IS PROVIDED THAT A CONCERN SHALL BE DEEMED TO PERFORM A SUBSTANTIAL PROPORTION OF A CONTRACT IN SUBSTANTIAL LABOR SURPLUS AREAS IF THE COSTS WHICH THE CONCERN WILL INCUR ON ACCOUNT OF MANUFACTURING OR PRODUCTION PERFORMED IN SUBSTANTIAL AND PERSISTENT LABOR SURPLUS AREAS AMOUNT TO MORE THAN 50 PERCENT OF THE CONTRACT PRICE.

IN ADDITION, THE INVITATION STATES THAT THE BIDDER AGREES THAT, IF AWARDED A CONTRACT AS A PERSISTENT LABOR SURPLUS AREA CONCERN UNDER THE SET-ASIDE PORTION OF THE PROCUREMENT, HE WILL PERFORM, OR CAUSE TO BE PERFORMED, A SUBSTANTIAL PROPORTION OF THE PRODUCTION IN AREAS CLASSIFIED AT THE TIME OF AWARD, OR AT THE TIME OF PERFORMANCE OF THE CONTRACT, AS PERSISTENT LABOR SURPLUS AREAS; AND THAT IF AWARDED A CONTRACT AS A SUBSTANTIAL LABOR SURPLUS AREA CONCERN UNDER THE SET ASIDE PORTION OF THIS PROCUREMENT, HE WILL PERFORM, OR CAUSE TO BE PERFORMED, A SUBSTANTIAL PROPORTION OF THE PRODUCTION IN AREAS CLASSIFIED AT THE TIME OF AWARD, OR AT THE TIME OF PERFORMANCE OF THE CONTRACT, AS SUBSTANTIAL OR PERSISTENT LABOR SURPLUS AREAS.

FURTHER, THE INVITATION AND AMENDMENT 1 TO THE INVITATION BOTH PROVIDE THAT A BIDDER DESIRING TO BE CONSIDERED FOR AWARD AS A LABOR SURPLUS AREA CONCERN ON THE SET-ASIDE PORTION OF THE PROCUREMENT SHALL IDENTIFY THE AREAS IN WHICH HE PROPOSES TO PERFORM, OR CAUSE TO BE PERFORMED, A SUBSTANTIAL PROPORTION OF THE CONTRACT, THE FORMER STIPULATING THAT SUCH IDENTIFICATION SHOULD BE MADE IN THE BID, THE LATTER INDICATING THE PLACE IN THE BID WHERE THE BIDDER SHOULD IDENTIFY THE AREAS. IN CONNECTION WITH THE LATTER, THE AMENDMENT STATES THAT IF A BIDDER SETS FORTH MORE THAN ONE LABOR SURPLUS AREA, HE SHALL FURTHER INDICATE FOR EACH SUCH AREA THE MINIMUM PERCENTAGE OF THE CONTRACT PRICE WHICH HE WILL INCUR AS COSTS ON ACCOUNT OF MANUFACTURING OR PRODUCTION OF THE CONTRACT. THEREAFTER FOLLOWS AN ADMONITION THAT IF A BIDDER FAILS TO INDICATE SUCH PERCENTAGES AS REQUIRED HIS BID WILL BE CONSTRUED AS DESIGNATING FOR PERFORMANCE OF A SUBSTANTIAL PROPORTION OF THE CONTRACT THAT AREA WHICH IS LEAST FAVORABLE TO THE BIDDER FOR THE PURPOSE OF QUALIFYING THE BIDDER FOR AWARD OF THE SET-ASIDE AND THE DETERMINATION OF THE ORDER OF PRIORITY FOR NEGOTIATION FOR THE SET-ASIDE.

POLAN INDUSTRIES IS THE SECOND LOW BIDDER ON THE NON-SET-ASIDE PORTION OF THE PROCUREMENT. IN VIRTUE OF THE FACT THAT POLAN IS SMALL BUSINESS AND THAT IN THE SPACE PROVIDED FOR THE IDENTIFICATION OF AREAS OF PERFORMANCE THAT BIDDER NAMED PERSISTENT LABOR SURPLUS AREAS AND SHOWED PERCENTAGES TOTALING 41 PERCENT THEREFOR AND NAMED SUBSTANTIAL LABOR SURPLUS AREAS AND SHOWED PERCENTAGES TOTALING 12 PERCENT THEREFOR, THE CONTRACTING OFFICER PROPOSES TO CLASSIFY THE BIDDER IN PRIORITY GROUP 3 FOR NEGOTIATION. POLAN CONTENDS, FOR REASONS THAT WILL BE SET FORTH BELOW, THAT IT SHOULD BE CLASSIFIED IN GROUP 1. WERE SUCH A CLASSIFICATION MADE, IT WOULD BE ELIGIBLE FOR FIRST CONSIDERATION FOR AWARD SINCE IT WOULD BE THE LOWEST BIDDER IN THAT PRIORITY GROUP, THE OTHER TWO BIDDERS THEREIN HAVING BID HIGHER PRICES.

POLAN CONTENDS IT IS ENTITLED TO FIRST PRIORITY FOR A VARIETY OF REASONS. IT STATES THAT INASMUCH AS THE INVITATION CALLED FOR "MINIMUM PERCENTAGES" OF MANUFACTURING OR PRODUCTION, IT SHOWED THAT A MINIMUM OF 41 PERCENT OF THE CONTRACT PRICE WOULD CONSIST OF MANUFACTURING OR PRODUCTION COSTS WHICH WOULD BE INCURRED IN PERSISTENT LABOR SURPLUS AREAS AND DID NOT INCLUDE GENERAL AND ADMINISTRATIVE COSTS WHICH IT ESTIMATES WOULD BE 10 PERCENT OF THE CONTRACT PRICE BECAUSE THE INVITATION DID NOT SPECIFICALLY MENTION GENERAL AND ADMINISTRATIVE COSTS. POLAN INDICATES FURTHER THAT IT DID NOT BELIEVE THAT THE PROVISION IN THE INVITATION THAT BIDDERS WOULD BE PENALIZED IF THEY FAILED TO INDICATE "SUCH PERCENTAGES AS REQUIRED" HAD ANY BEARING UPON IT, SINCE THAT WAS INTERPRETED AS APPLYING WHERE A BIDDER DID NOT SHOW ANY PERCENTAGES. POLAN STATES THAT IT IS RESPONSIVE TO WHAT WAS CALLED FOR AND THAT IF THE INFORMATION IT FURNISHED DOES NOT MAKE IT ENTIRELY CLEAR THAT IT IS ENTITLED TO FIRST PRIORITY IN NEGOTIATING FOR THE SET-ASIDE PORTION, THE CONTRACTING OFFICER SHOULD SEEK SUCH ADDITIONAL INFORMATION AS MAY BE REQUIRED. IN THAT CONNECTION, BOTH IN REPRESENTATIONS TO THE CONTRACTING OFFICER AND IN A LETTER OF JUNE 30, 1964, TO OUR OFFICE, IT IS CONTENDED THAT B 153267, JUNE 8, 1964, IS PERTINENT TO THE MATTER IN THAT IT WAS INDICATED THEREIN THAT POLAN COULD FURNISH INFORMATION AFTER BID OPENING TO SHOW THAT IT WOULD PERFORM IN A PERSISTENT LABOR SURPLUS AREA. THE EFFECT OF THE DECISION IS SAID TO BE THAT THE MATTER INVOLVED IS ONE GOING TO RESPONSIBILITY OF THE BIDDER WHICH COULD BE RESOLVED AFTER BID OPENING. ALSO, IN THE JUNE 30 LETTER, IT IS POINTED OUT THAT THE INVITATION PROVIDES THAT THE BIDDER AGREES THAT IF AWARDED A CONTRACT AS A PERSISTENT LABOR SURPLUS AREA CONCERN HE WILL PERFORM AS SUCH AND IT IS CONTENDED THAT THE COMMITMENT CANNOT BE VARIED BY THE ESTIMATED PERCENTAGES, CITING B-151745, JULY 2, 1963, 43 COMP. GEN. 23, SO THAT SINCE POLAN INDICATES A DESIRE TO BE CONSIDERED FOR AWARD IN ACCORDANCE WITH THE AGREEMENT, IT SHOULD BE ACCORDED THAT OPPORTUNITY OF THE CONTRACTING OFFICER WILL BE SATISFIED ON THE BASIS OF A PREAWARD SURVEY THAT IT WILL PERFORM AS AGREED.

IN 41 COMP. GEN. 417, 418, IT IS STATED:

THE SET-ASIDE PORTION IS, OF COURSE, A NEGOTIATED PROCUREMENT AND, THEREFORE, IS NOT SUBJECT TO THE STRICT RULES GOVERNING PROCUREMENT BY FORMAL ADVERTISING. NEVERTHELESS, IT IS OUR POSITION THAT REQUIREMENTS FOR AND LIMITATIONS ON ELIGIBILITY FOR AWARD UNDER THE SET-ASIDE WHICH ARE STATED IN AN INVITATION SHOULD BE FOLLOWED IN THE AWARD OF THE SET ASIDE PORTION. * * *

IN LINE WITH THAT VIEW, OUR DECISIONS HAVE STATED THAT INVITATIONS INVOLVING LABOR SURPLUS SET-ASIDES SHOULD STATE THE INFORMATION WHICH BIDDERS ARE TO FURNISH IN THEIR BIDS AND THE EFFECT OF FAILURE TO FURNISH IT. 41 COMP. GEN. 160, 165; B-146244, SEPTEMBER 6, 1961; B 145942, B- 146040, SEPTEMBER 6, 1961; AND B-149697, NOVEMBER 5, 1962. THUS, WHERE AN INVITATION REQUIRED A BIDDER TO STATE SPECIFIC INFORMATION IN HIS BID AS TO THE PLACES OF MANUFACTURE OR PRODUCTION AND THE PERCENT OF THE CONTRACT PRICE TO BE PERFORMED AT SUCH PLACES AND ADVISED THAT FAILURE TO SUBMIT THE INFORMATION WITH THE BID WILL PRECLUDE ANY CONSIDERATION AS A LABOR SURPLUS AREA CONCERN, OUR OFFICE SAID:

* * * THE RULE IS WELL ESTABLISHED IN ADVERTISED PROCUREMENTS THAT A BIDDER'S FAILURE TO SUPPLY INFORMATION, IN HIS BID, WHICH IS NECESSARY TO A FULL AND COMPLETE EVALUATION OF THE BID WILL RENDER THE BID NONRESPONSIVE TO THE INVITATION FOR BIDS. IT IS ALSO THE SETTLED RULE THAT WHERE SUCH MATERIAL INFORMATION IS OMITTED FROM A BID IT MAY NOT BE SUPPLIED AFTER BID OPENING. * * *

B-150676, FEBRUARY 7, 1963.

THE DECISION WENT ON TO CONCLUDE THAT THE REQUIREMENT FOR THE INFORMATION IN THAT CASE AND THE WARNING OF THE CONSEQUENCES FOR FAILING TO FURNISH IT WERE "IN ACCORD WITH THE ESTABLISHED RULES.' SEE, ALSO, B-151051, MAY 2, 1963, WHEREIN IT WAS CONCLUDED THAT SINCE BIDDERS WERE WARNED THAT THE FAILURE TO IDENTIFY THE AREAS WHERE MORE THAN 50 PERCENT OF THE TOTAL COST OF PERFORMANCE WOULD BE INCURRED WOULD RESULT IN A DETERMINATION THAT THE BIDDER IS NOT A LABOR SURPLUS AREA CONCERN FOR THE PURPOSE OF PRIORITY OF NEGOTIATION, OUR OFFICE WOULD NOT BE WARRANTED IN DISAGREEING WITH A DETERMINATION TO CONSIDER A BIDDER WHICH DID NOT FURNISH THE REQUIRED INFORMATION AS NOT QUALIFYING AS A LABOR SURPLUS AREA CONCERN. MOREOVER, IN B-151247, JUNE 28, 1963, OUR OFFICE HELD THAT A BIDDER COULD NOT CHANGE ITS PRIORITY FROM GROUP 3 TO GROUP 1 UPON AN ALLEGATION THAT IT MADE AN ERROR IN INDICATING IT WOULD PERFORM IN A SUBSTANTIAL LABOR SURPLUS AREA BECAUSE SUCH CHANGE WOULD DISCRIMINATE AGAINST THE OTHER BIDDERS. PASSING UPON THE MATTER, IT WAS STATED:

* * * WE CONSISTENTLY HAVE HELD THAT A BIDDER'S FAILURE TO FURNISH INFORMATION WITH HIS BID WHICH IS NECESSARY FOR COMPLETE BID EVALUATION WILL RENDER THE BID NONRESPONSIVE, AND THAT SUCH NONRESPONSIVENESS MAY NOT BE CURED AFTER BIDS ARE OPENED. THEREFORE, IT WOULD NOT BE PROPER FOR DERO (THE BIDDER) TO CORRECT ITS OMISSION OF GEOGRAPHICAL INFORMATION AFTER THE CONTENTS OF BIDS ARE PUBLICLY REVEALED. CF. 40 COMP. GEN. 432.

IN THE IMMEDIATE CASE, THE INVITATION REQUIRES A BIDDER TO INDICATE FOR EACH AREA THE MINIMUM PERCENTAGE OF THE CONTRACT PRICE WHICH IT WILL INCUR AS COSTS ON ACCOUNT OF MANUFACTURING OR PRODUCTION OF THE CONTRACT. POLAN SEEKS TO MAKE CAPITAL OF THE FACT THAT THE REQUIREMENT UTILIZES THE WORDS "MANUFACTURING OR PRODUCTION" AND SAYS NOTHING ABOUT GENERAL AND ADMINISTRATION COSTS. HOWEVER, IT IS OBSERVED THAT THE REQUIREMENT SPEAKS OF COSTS ON "ACCOUNT OF MANUFACTURING OR PRODUCTION," SO THAT THE COSTS TO BE TAKEN INTO CONSIDERATION WERE NOT MERELY THE DIRECT COSTS OF PERFORMANCE, BUT ALSO THE INDIRECT COSTS TO BE INCURRED BY REASON OF SUCH PERFORMANCE. IN THAT CONNECTION, IT IS NOTEWORTHY THAT SIMILAR LANGUAGE IS EMPLOYED IN ASPR 1-801.1, PERTAINING TO LABOR SURPLUS AREA CONCERNS, AND THE EXAMPLES CONTAINED THEREIN SHOW THAT BESIDES PURCHASE OF MATERIALS AND DIRECT LABOR, OVERHEAD IS TO BE CONSIDERED A COST ON ACCOUNT OF MANUFACTURING OR PRODUCTION. IN VIEW THEREOF, POLAN SHOULD HAVE KNOWN THAT THE GENERAL AND ADMINISTRATION COSTS PROPERLY WERE FOR INCLUSION IN ITS PERCENTAGES OF COSTS. HOWEVER THAT MAY BE, POLAN MAY NOT NOW INCLUDE SUCH COSTS TO CHANGE ITS PRIORITY CLASSIFICATION.

WHILE POLAN SEEKS TO MAKE A POINT OF THE FACT THAT THE INVITATION REQUIREMENT CALLS FOR ,MINIMUM PERCENTAGE" AND THE SENTENCE FOLLOWING STATES THAT IF A BIDDER FAILS TO INDICATE SUCH PERCENTAGES AS REQUIRED, HE WILL BE PENALIZED, IN OUR OPINION THE BALANCE OF THE SENTENCE MAKES IT CLEAR THAT THE PURPOSE OF THE INFORMATION IS TO ESTABLISH THE STATUS OF A BIDDER FOR PRIORITY FOR NEGOTIATION AND SHOULD HAVE REASONABLY CONVEYED TO THE BIDDER THAT THE MINIMUM CALLED FOR SHOULD BE ONE WHICH IS SUFFICIENT TO PLACE THE BIDDER IN THE CATEGORY IN WHICH IT INTENDS TO BE CONSIDERED. IN THAT CONNECTION, THE SENTENCE THEN INDICATES THAT THE INFORMATION IS FOR "THE PURPOSE OF QUALIFYING THE BIDDER FOR AWARD OF THE SET-ASIDE PORTION OF THE PROCUREMENT AND THE DETERMINATION OF THE "ORDER OF PRIORITY" FOR NEGOTIATION FOR THE SET-ASIDE PORTION.' UNDER POLAN'S THEORY, IN EFFECT, THE PERCENTAGE INFORMATION SERVES NO PURPOSE. THIS WOULD BE AN UNREASONABLE INTERPRETATION, IN VIEW OF THE PENALTY WHICH THE INVITATION IMPOSES FOR FAILURE TO COMPLY WITH THE REQUEST FOR INFORMATION.

AS POLAN INDICATES, IT WAS RESPONSIVE TO THE INVITATION. UNFORTUNATELY, THE TOTAL OF THE PERCENTAGES (53 PERCENT) DESIGNATED FOR THE PERSISTENT AND SUBSTANTIAL LABOR SURPLUS AREAS IDENTIFIED IN ITS BID BY THE DEFINITION EMPLOYED IN THE INVITATION MAKES IT ELIGIBLE FOR CONSIDERATION ONLY AS A SUBSTANTIAL LABOR SURPLUS AREA CONCERN. IN THAT CONTEXT, THE ATTEMPT OF POLAN TO FURNISH ADDITIONAL INFORMATION AT THIS TIME APPEARS TO BE FOR NO OTHER PURPOSE THAN CHANGING TO A HIGHER PRIORITY AND THEREBY PASSING OVER OTHER BIDDERS WHO QUALIFIED IN THE MANNER PRESCRIBED IN THE INVITATION. THE DECISION IN B 153267, JUNE 8, 1964, IS DISTINGUISHABLE FROM THE INSTANT MATTER. IN THE CITED CASE, POLAN WAS ALLOWED TO FURNISH INFORMATION TO SHOW THAT IT WOULD PERFORM IN A PERSISTENT LABOR SURPLUS AREA AS IT HAD INDICATED IN ITS BID. IN THE IMMEDIATE CASE, POLAN IS ATTEMPTING TO FURNISH THE INFORMATION TO SHOW THAT IT WOULD PERFORM IN A SUPERIOR CATEGORY THAN THAT WHICH WAS INDICATED IN ITS BID. ALSO, IN THE FORMER CASE, IT ALREADY HAD FIRST PRIORITY OVER OTHER BIDDERS WHEN IT WAS ALLOWED TO FURNISH THE INFORMATION, WHEREAS HERE IT IS ATTEMPTING TO FURNISH THE INFORMATION TO OBTAIN FIRST PRIORITY AND THEREBY PASS OVER OTHER BIDDERS.

WHILE THE AGREEMENT PROVISION IN THE INVITATION IS TO THE EFFECT THAT IF A BIDDER IS AWARDED A CONTRACT AS A PERSISTENT LABOR SURPLUS AREA CONCERN, HE WILL PERFORM AS SUCH, THE SAME PROVISION CONTINUES TO STATE THAT IF AWARDED THE CONTRACT AS A SUBSTANTIAL LABOR SURPLUS AREA CONCERN, THE BIDDER AGREES TO PERFORM IN THAT MANNER. THIS AGREEMENT DEALS WITH THE EVENTUALITY OF WHAT THE BIDDER WILL DO DEPENDING UPON THE CATEGORY IN WHICH HE RECEIVES THE AWARD. WE DO NOT FIND THEREIN ANYTHING WHICH INDICATES WHICH OF THE TWO CATEGORIES HE IS BIDDING ON. IN THE PLACE PROVIDED FOR FURNISHING SUCH INFORMATION, THE DATA FURNISHED WAS SUCH AS TO INDICATE THAT HE WAS BIDDING IN THE "SUBSTANTIAL" CATEGORY RATHER THAN THE "PERSISTENT" CATEGORY. FOR PURPOSES OF ASCERTAINING THE BIDDER'S PRIORITY FOR NEGOTIATION, THE INFORMATION AS TO THE "SUBSTANTIAL" CATEGORY SHOULD MORE APPROPRIATELY PREVAIL.

THE DECISION B-151745, JULY 2, 1963, IS NOT APPLICABLE SINCE THE QUESTION BEFORE OUR OFFICE IN THAT CASE WAS WHETHER THE BIDDER WAS RESPONSIVE TO THE INVITATION. WE HELD THAT IT WAS. IN THE IMMEDIATE CASE, THERE IS NO QUESTION BUT THAT POLAN WAS RESPONSIVE TO THE INVITATION. HOWEVER, THERE WERE ANY ONE OF FIVE CATEGORIES THAT THE BIDDER COULD RESPOND TO. THE ONLY QUESTION IS AS TO WHICH CATEGORY THE BIDDER RESPONDED. FROM THE INFORMATION FURNISHED IN ITS BID, IT IS APPARENT THAT IT RESPONDED TO THE THIRD CATEGORY. WHILE THE AGREEMENT IN THE INVITATION IS SUCH THAT IF AWARDED A CONTRACT IN A PERSISTENT LABOR SURPLUS AREA THE BIDDER WOULD PERFORM AS SUCH, WE DO NOT BELIEVE THAT ANY BIDDER REASONABLY WOULD HAVE CONTEMPLATED THAT, IF IT FURNISHED INFORMATION SHOWING THAT IT WOULD ACT AS A SUBSTANTIAL LABOR SURPLUS AREA CONCERN, IT WOULD BE AWARDED A CONTRACT AS A PERSISTENT LABOR SURPLUS AREA CONCERN WHERE THE INVITATION ALSO PROVIDED THAT IF AWARDED A CONTRACT AS A SUBSTANTIAL LABOR SURPLUS ARE CONCERN IT WOULD PERFORM AS SUCH.

IN VIEW OF THE FOREGOING, WE DO NOT FEEL WARRANTED IN OBJECTING TO THE CONTRACTING OFFICER'S DETERMINATION TO MAINTAIN POLAN IN THE SUBSTANTIAL LABOR SURPLUS AREA CATEGORY.