B-154717, OCT. 22, 1964

B-154717: Oct 22, 1964

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GOODIS AND GREENFIELD: REFERENCE IS MADE TO YOUR LETTER OF JULY 14. THE BASIS OF THE PROTEST IS THAT ZERO FALSELY CERTIFIED ITSELF TO BE SMALL BUSINESS. IS DOMINANT IN ITS FIELD. THUS IS NOT A SMALL BUSINESS CONCERN AS DEFINED IN THE INVITATION. WHICH WAS ISSUED MAY 28. THE PROCUREMENT WAS RESTRICTED TO SMALL BUSINESS. THERE WAS INCLUDED IN ITS PROVISIONS THE FOLLOWING LANGUAGE: "SMALL BUSINESS SIZE STANDARDS "FOR THE PURPOSE OF THIS INVITATION FOR BIDS (NOTWITHSTANDING ANY OTHER SIZE STANDARD WHICH MAY BE CONTAINED HEREIN). A CONCERN IS CLASSIFIED AS SMALL BUSINESS. ZERO INDICATED PERFORMANCE IN OTHER THAN A LABOR SURPLUS AREA WHILE CONTAINER RESEARCH STATED THAT IT WAS A PERSISTENT LABOR SURPLUS AREA CONCERN.

B-154717, OCT. 22, 1964

TO FOLZ, BARD, KAMSLER, GOODIS AND GREENFIELD:

REFERENCE IS MADE TO YOUR LETTER OF JULY 14, 1964, ON BEHALF OF CONTAINER RESEARCH CORPORATION, SUPPLEMENTING A TELEGRAM OF THE SAME DATE FROM THE CORPORATION AND PROTESTING AGAINST THE AWARD OF CONTRACT TO ZERO MANUFACTURING COMPANY UNDER INVITATION FOR BIDS NO. AMC/A/36 038-64- 1094/SP). THE BASIS OF THE PROTEST IS THAT ZERO FALSELY CERTIFIED ITSELF TO BE SMALL BUSINESS, IN THAT IT EMPLOYS MORE THAN 500 PERSONS, HAD SALES IN EXCESS OF $12 MILLION DURING THE PAST FISCAL YEAR, IS DOMINANT IN ITS FIELD, AND THUS IS NOT A SMALL BUSINESS CONCERN AS DEFINED IN THE INVITATION.

THE INVITATION, WHICH WAS ISSUED MAY 28, 1964, BY FRANKFORD ARSENAL, PHILADELPHIA, PENNSYLVANIA, SOLICITED BIDS TO FURNISH 26 SETS OF MOUNTING FRAMES AND COMBINATION CASES WITH WORK TABLES. THE PROCUREMENT WAS RESTRICTED TO SMALL BUSINESS, AND IN LIEU OF A STANDARD INDUSTRIAL CLASSIFICATION (SIC) CODE, WHICH GOVERNS THE LIMITATION ON NUMBER OF EMPLOYEES, THERE WAS INCLUDED IN ITS PROVISIONS THE FOLLOWING LANGUAGE:

"SMALL BUSINESS SIZE STANDARDS

"FOR THE PURPOSE OF THIS INVITATION FOR BIDS (NOTWITHSTANDING ANY OTHER SIZE STANDARD WHICH MAY BE CONTAINED HEREIN), A CONCERN IS CLASSIFIED AS SMALL BUSINESS, IF, IN ADDITION TO MEETING ALL OTHER CRITERIA, ITS NUMBER OF EMPLOYEES DOES NOT EXCEED 500 PERSONS (SEE CODE OF FEDERAL REGULATIONS, TITLE 13, PART 121, AS AMENDED FOR DETAILED DEFINITION AND RELATED PROCEDURES).'

ON JUNE 22, 1964, THE DATE OF BID OPENING, ONLY TWO BIDS HAD BEEN RECEIVED--- A BID FROM ZERO MANUFACTURING CORPORATION IN THE NET TOTAL AMOUNT OF $349,038.04 AND A BID FROM CONTAINER RESEARCH CORPORATION IN THE NET TOTAL AMOUNT OF $379,040.02. BOTH BIDDERS HAD CERTIFIED THEMSELVES AS SMALL BUSINESS CONCERNS; ZERO INDICATED PERFORMANCE IN OTHER THAN A LABOR SURPLUS AREA WHILE CONTAINER RESEARCH STATED THAT IT WAS A PERSISTENT LABOR SURPLUS AREA CONCERN. SINCE ZERO, THE LOW BIDDER, MET THE MINIMUM STANDARDS PRESCRIBED IN ARMED SERVICES PROCUREMENT REGULATION 1-903 FOR A RESPONSIBLE PROSPECTIVE CONTRACTOR AND ITS PRICE WAS CONSIDERED REASONABLE, AWARD WAS MADE TO ZERO ON JUNE 30, 1964, UPON RECOMMENDATION OF THE FRANKFORD ARSENAL CONTRACTOR SELECTION BOARD.

IN YOUR PROTEST, YOU STATE THAT CONTAINER RESEARCH REGISTERED AN ORAL PROTEST WITH FRANKFORD ARSENAL ON JUNE 29, 1964, AND THAT SUCH PROTEST WAS CONFIRMED IN WRITING ON JULY 1. YOU FURTHER STATE THAT ON JULY 9 THE CONTRACTING OFFICER CONFIRMED BY LETTER A TELEPHONE CONVERSATION OF JULY 7 INFORMING YOU THAT THE PROTEST WAS DENIED.

IN A REPORT FORWARDED TO OUR OFFICE ON AUGUST 25, 1964, THE ARMY MATERIAL COMMAND (AMC) HAS ADVISED THAT THE PROCUREMENT WAS ERRONEOUSLY CLASSIFIED DURING THE PLANNING STATE UNDER SIC CODE 1941 "SIGHTING AND FIRE CONTROL EQUIPMENT," WHICH LIMITS THE EMPLOYMENT SIZE TO 500 PERSONS, AND THAT THE LANGUAGE IN THE INVITATION REGARDING THE 500 EMPLOYEE LIMITATION, WHICH RESULTED FROM THE MISCLASSIFICATION, WAS INADVERTENTLY CARRIED THROUGH THE PROCUREMENT CYCLE BEYOND THE DATE OF BID OPENING. UPON REEVALUATION, THE PROPER SIC CODE, BASED ON THE QUANTITY OF ALUMINUM IN THE SETS, WAS DETERMINED BY THE CONTRACTING ACTIVITY TO BE 3411, WHICH PERMITS EMPLOYMENT OF 1,000 PERSONS. IN RESPONSE TO OUR REQUEST FOR A SPECIFIC DETERMINATION REGARDING ZERO'S QUALIFICATIONS AS A SMALL BUSINESS CONCERN FOR THIS PROCUREMENT, THE SBA HAS ADVISED US IN A REPORT DATED OCTOBER 12, 1964, THAT ZERO IS NOT DOMINANT IN SIC 3411 AND FOR THE PAST FOUR QUARTERS HAS AVERAGED 691 EMPLOYEES, WHICH FIGURE INCLUDES THE EMPLOYEES OF FIVE FIRMS ZERO CLAIMS ARE NOT ITS AFFILIATES.

AN INVESTIGATION BY THE CONTRACTING AGENCY DISCLOSES THAT YOUR WRITTEN PROTEST WAS RECEIVED BY THE CONTRACTING OFFICER ON JULY 7, 1964, WHO CALLED YOUR MR. GREENFIELD ON THE SAME DATE AND ADVISED THAT AN AWARD HAD BEEN MADE ON JUNE 30, 1964, AND THAT ANY CHALLENGE OF A BIDDER'S SMALL BUSINESS STATUS MUST BE IN WRITING AND MUST BE RECEIVED BEFORE AWARD. THE CONVERSATION WAS CONFIRMED BY THE CONTRACTING OFFICER'S LETTER OF JULY 9, 1964, WHICH CITED ARMED SERVICES PROCUREMENT REGULATION 1-703 (B) (1), AND OUR UNPUBLISHED DECISION B 153132, FEBRUARY 4, 1964, WHICH INDICATES SUCH REGULATION IS EMINENTLY REASONABLE AND NECESSARY TO THE PROPER ADMINISTRATION OF GOVERNMENT CONTRACTS.

THE AMC REPORT ALSO SHOWS THAT ZERO WAS REQUESTED TO EXPLAIN ITS SELF CERTIFICATION AS A SMALL BUSINESS CONCERN UNDER THE LANGUAGE OF THE INVITATION, SINCE IT HAD MORE THAN 500 EMPLOYEES. ZERO'S REPLY WAS TO THE EFFECT THAT IT HELD A SMALL BUSINESS CERTIFICATE DATED MAY 29, 1963, FOR DRAWING OF ALUMINUM, SIC 3352, WHICH ALLOWS 750 EMPLOYEES, AND THAT SINCE THE PRINCIPAL PRODUCT INVOLVED IN THE PROCUREMENT IN QUESTION IS DEEP DRAWN ALUMINUM CONTAINERS, IT FALLS WITHIN SIC 3352. ZERO ALSO STATES THAT OTHER POSSIBLE CLASSIFICATIONS ARE SIC 3662 AND 3729. IN THIS CONNECTION, THE CONTRACTING OFFICER REPORTS THAT THE PROCUREMENT ITEM IS SUSCEPTIBLE OF SEVERAL POSSIBLE CLASSIFICATIONS, INCLUDING SIC 3353, 3662, 3729, AND 3411.

ASPR 1-703 PROVIDES THAT THE CONTRACTING OFFICER SHALL ACCEPT AT FACE VALUE THE SELF-CERTIFICATION BY A BIDDER AS TO THE SIZE OF ITS FIRM UNLESS THE CONTRACTING OFFICER DESIRES TO SUBMIT THE MATTER TO THE SMALL BUSINESS ADMINISTRATION (SBA), OR UNLESS SOME OTHER BIDDER HAS, PRIOR TO AWARD, SUBMITTED A WRITTEN PROTEST TO THE CONTRACTING OFFICER. THE RECORD BEFORE US SHOWS THAT WHILE YOU CONFERRED BY TELEPHONE BEFORE AWARD WITH A MRS. CALL AN, WHO WAS NOT THE CONTRACTING OFFICER AT FRANKFORD ARSENAL, AND QUESTIONED ZERO'S SMALL BUSINESS STATUS, NO WRITTEN PROTEST WAS RECEIVED BY THE CONTRACTING OFFICER UNTIL AFTER THE AWARD. IN SUCH CIRCUMSTANCES, ASPR 1-703 (B) (1) PROVIDES THAT A PROTEST AS TO THE SIZE OF ANOTHER BIDDER SHALL NOT BE CONSIDERED. WHILE IT IS UNFORTUNATE THAT YOUR TELEPHONE PROTEST TO MRS. CALL AN WAS NOT BROUGHT TO THE ATTENTION OF THE CONTRACTING OFFICER WHO MIGHT HAVE ADVISED YOU OF THE NEED FOR A TIMELY RECEIPT OF A WRITTEN PROTEST, YOU ARE NOT RELIEVED THEREBY OF THE RESPONSIBILITY FOR COMPLYING WITH THE APPLICABLE REGULATION.

CONCERNING THE DISCREPANCY BETWEEN THE DEFINITION OF A SMALL BUSINESS CONCERN IN THE INVITATION AND THE EMPLOYEE LIMITATION APPLICABLE TO SIC CODE 3411, UNDER SBA REGULATIONS, THE SMALL BUSINESS SIZE STANDARDS WHICH ARE PRESCRIBED BY SBA ARE MADE CONCLUSIVE ON THE PROCUREMENT OFFICERS OF THE GOVERNMENT BY THE PROVISIONS OF 15 U.S.C. 637 (B) (6). IN THIS CONNECTION WE HAVE HELD THAT THE SMALL BUSINESS STATUS OF A BIDDER, WHICH IS DETERMINED BY SBA IN ACCORDANCE WITH ITS REGULATIONS, IS NOT SUBJECT TO QUESTION MERELY BECAUSE THE INVITATION FOR BIDS DEFINED A SMALL BUSINESS CONCERN IN A DIFFERENT MANNER. B 152431, OCTOBER 23, 1963.

IN VIEW OF THE REPORTED FACTS AND CIRCUMSTANCES, WE MUST CONCLUDE THAT ZERO'S SELF-CERTIFICATION AS A SMALL BUSINESS CONCERN WAS MADE IN GOOD FAITH. ACCORDINGLY, THERE BEING NO WRITTEN PROTEST BEFORE THE CONTRACTING OFFICER PRIOR TO AWARD, THE ACCEPTANCE OF ZERO'S SELF CERTIFICATION WAS AUTHORIZED UNDER ASPR 1-703, AND THE WRITTEN PROTEST ON BEHALF OF CONTAINER RESEARCH WHICH WAS SUBSEQUENTLY RECEIVED WAS PROPERLY DENIED UNDER ASPR 1-703 (B) (1). WE FIND NO VALID BASIS TO QUESTION THE AWARD TO ZERO, AND YOUR PROTEST MUST BE DENIED.