B-154981, DEC. 1, 1964

B-154981, DEC. 1, 1964

TO ROYAL SERVICES, INC.:

FURTHER REFERENCE IS MADE TO YOUR ATTORNEY'S LETTERS OF AUGUST 17 AND OCTOBER 9, 1964, WITH ENCLOSURES, PROTESTING, ON YOUR BEHALF, AGAINST THE ACTION OF THE MACDILL AIR FORCE BASE, FLORIDA, IN AWARDING A SMALL BUSINESS SET-ASIDE CONTRACT TO MAINTENANCE INCORPORATED PURSUANT TO INVITATION NO. 08-602-64-59.

THE INVITATION DATED MAY 14, 1964, REQUESTED BIDS FOR FURNISHING CUSTODIAL SERVICES AT THE MACDILL AIR FORCE BASE DURING THE PERIOD BEGINNING JULY 1, 1964, AND ENDING JUNE 30, 1965. THIS PROCUREMENT WAS SET ASIDE FOR SMALL BUSINESS CONCERNS IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-706.5. EIGHT RESPONSIVE BIDS WERE RECEIVED AND OPENED ON JUNE 8, 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 YOUR FIRM.

IT IS REPORTED THAT ON JUNE 11, 1964, THE CONTRACTING OFFICER RECEIVED A TELEPHONE CALL FROM THE ATLANTA SMALL BUSINESS ADMINISTRATION REGIONAL OFFICE ADVISING THAT YOUR FIRM HAD CHALLENGED THE SMALL BUSINESS SIZE STATUS OF MAINTENANCE INCORPORATED, AND THAT IN A CONFIRMING TELEGRAM DATED JUNE 12, 1964, THE SMALL BUSINESS ADMINISTRATION (SBA) REQUESTED THE CONTRACTING OFFICER TO DELAY MAKING AN AWARD UNTIL JUNE 25, 1964. IT IS ALSO REPORTED THAT ON JUNE 8 AND 9, 1964, THE ATLANTA OFFICE OF THE SBA HAD DETERMINED MAINTENANCE INCORPORATED TO BE A SMALL BUSINESS CONCERN FOR THE PURPOSE OF AWARDING CONTRACTS AT PATRICK AIR FORCE BASE AND FORT RUCKER, RESPECTIVELY. BY LETTER DATED JUNE 22, 1964, THE CONTRACTING OFFICER ADVISED YOUR ATTORNEY THAT THE SBA HAD ADVISED HIM THAT YOUR FIRM HAD QUESTIONED THE SMALL BUSINESS SIZE STATUS OF MAINTENANCE AND THAT PURSUANT TO THE SBA'S REQUEST HE WOULD WITHHOLD AWARD OF THE CONTRACT UNTIL JUNE 25, 1964. ON JUNE 25, 1964, CONTRACT NO. AF 08 (602) -3187 WAS AWARDED TO MAINTENANCE IN ACCORDANCE WITH ASPR 1-703 (B) (3) WHICH PROVIDES THAT WHERE AN SBA DETERMINATION IS NOT RECEIVED WITHIN 10 WORKING DAYS FROM THE DATE OF THE PROTEST THE BIDDER MAY BE PRESUMED BY THE CONTRACTING OFFICER TO BE A SMALL BUSINESS CONCERN.

BY TELEGRAM DATED JUNE 29, 1964, THE SBA SIZE STANDARDS DIVISION, WASHINGTON, D.C., ADVISED THE CONTRACTING OFFICER 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. THE RECORD SHOWS THAT THE SIZE DETERMINATIONS MADE BY THE DIRECTOR, SIZE STANDARDS DIVISION, SBA, ON MAINTENANCE INCORPORATED WAS APPEALED BY YOUR FIRM TO THE SBA SIZE APPEALS BOARD. BY FINDINGS AND DECISION DATED AUGUST 17, 1964, THE SBA SIZE APPEALS BOARD DETERMINED THAT MAINTENANCE WAS NOT A SMALL BUSINESS CONCERN FOR PURPOSES OF BIDDING ON GOVERNMENT SERVICES CONTRACTS.

ASPR 1-703 PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"1-703 DETERMINATION 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 OF 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).

"/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 WAS IMPRUDENT OR LACKING IN GOOD FAITH. THE RECORD ALSO SHOWS THAT PRIOR TO THE TIME OF THE AWARD, THE ATLANTA REGIONAL OFFICE OF THE SBA DETERMINED THAT IT 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 WAS A LARGE BUSINESS CONCERN UNTIL AUGUST 17, 1964, OR 53 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 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. CF. 41 COMP. GEN. 252.

IN HIS LETTER OF OCTOBER 9, 1964, YOUR ATTORNEY REFERS TO OUR PREVIOUS DECISION OF OCTOBER 6, 1964, B-154453, TO YOU, WHEREIN WE HELD THAT NO LEGAL BASIS EXISTED FOR DISTURBING THE CONTRACT AWARD MADE TO MAINTENANCE PURSUANT TO AN INVITATION ISSUED BY THE PATRICK AIR FORCE BASE, FLORIDA, NOTWITHSTANDING THE FACT THAT SUBSEQUENT TO AWARD, THE SBA DETERMINED THAT THE COMPANY WAS NOT A SMALL BUSINESS CONCERN AT THE TIME AWARD WAS MADE. YOUR ATTORNEY CONTENDS THAT ALTHOUGH YOUR FIRM AND MAINTENANCE INCORPORATED WERE BOTH PARTIES IN THE PATRICK AIR FORCE BASE PROTEST CONSIDERED IN OUR DECISION OF OCTOBER 6, 1964, THE CASES ARE CLEARLY DISTINGUISHABLE AS TO ONE IMPORTANT FACTOR IN THAT, IN THE PATRICK SITUATION, YOUR FIRM WAS THE FOURTH LOWEST BIDDER AND THAT AS SUCH IT WOULD NOT HAVE RECEIVED ANY BENEFIT FROM CANCELLATION OF THE PATRICK AIR FORCE BASE CONTRACT, WHEREAS UNDER THE MACDILL AIR FORCE BASE INVITATION NOW IN QUESTION, YOUR FIRM IS THE SECOND LOWEST BIDDER AND AS SUCH WOULD BENEFIT FROM CANCELLATION OF THE AWARD MADE UNDER THIS INVITATION. YOUR ATTORNEY ALSO STATED THAT IF THE CONTRACT WITH MAINTENANCE FOR FURNISHING CUSTODIAL SERVICES AT THE MACDILL AIR FORCE BASE IS CANCELED, YOUR FIRM WOULD THEN RECEIVE A CONTRACT FOR SUCH SERVICES AND WOULD THEN DIRECTLY RECEIVE THE BENEFITS THAT CONGRESS INTENDED TO GRANT YOUR FIRM BY THE ENACTMENT OF SECTION 631, TITLE 15 OF THE U.S.C. WHICH HE STATES WAS ENACTED FOR THE PURPOSE OF GIVING AND PROMOTING THE GROWTH OF SMALL BUSINESS CONCERNS. THE FACT THAT YOU WERE THE FOURTH LOWEST BIDDER UNDER THE PATRICK AIR FORCE BASE INVITATION DID NOT AFFECT OUR DECISION IN THAT MATTER AND HAD YOU BEEN THE SECOND LOWEST BIDDER UNDER THAT INVITATION OUR CONCLUSION WOULD STILL HAVE BEEN THE SAME. YOUR ATTORNEY STATES THAT IN THE SENSE OF CONGRESS AS ENUNCIATED IN 15 U.S.C. 631, IT IS TO THE BEST INTEREST OF THE UNITED STATES TO SET ASIDE CERTAIN CONTRACTS FOR SMALL BUSINESS CONCERNS. IT IS FURTHER STATED THAT SINCE MAINTENANCE HAS BEEN DETERMINED BY THE SBA NOT TO BE A SMALL BUSINESS CONCERN, AND AS THE CONGRESS HAS DECLARED IN 15 U.S.C. 637 THAT THE SBA'S DETERMINATION AS TO A CONCERN'S SIZE STATUS IS CONCLUSIVE ON ALL FEDERAL CONTRACTING AGENCIES, IT WOULD APPEAR IRRESISTIBLE THAT IT WOULD BE IN THE BEST INTEREST OF THE UNITED STATES TO CANCEL THE CONTRACT AS SOON AS POSSIBLE AND MAKE AN AWARD TO YOUR FIRM, A SMALL BUSINESS CONCERN. YOUR ATTORNEY POINTS OUT THAT THE CONTRACT IN QUESTION IS A JANITORIAL CONTRACT, THE NATURE OF WHICH DOES NOT REQUIRE THE PURCHASE OF ANY SPECIAL MACHINERY OR SUPPLIES OR THE HIRING OF PERSONS OF ANY UNUSUAL SKILLS.

HOWEVER, THE FACTS IN THIS CASE ARE ANALOGOUS TO THOSE CONSIDERED IN OUR PREVIOUS DECISION OF OCTOBER 6, B-154453, TO YOU. WE ARE OF THE OPINION THAT THE SAME PRINCIPLES AS SET FORTH IN THAT DECISION ARE FOR APPLICATION HERE AND THAT A SIMILAR CONCLUSION MUST BE REACHED, THAT IS, THAT IT WOULD NOT BE IN THE GOVERNMENT'S BEST INTEREST TO REQUIRE CANCELLATION OF THE CONTRACT HERE INVOLVED.

ACCORDINGLY, YOUR PROTEST AGAINST THE AWARD OF CONTRACT NO. AF 08 (602) - 3187 TO MAINTENANCE INCORPORATED IS DENIED.