B-155196, NOV. 6, 1964

B-155196, NOV. 6, 1964

TO LASKO METAL PRODUCTS, INCORPORATED:

BY LETTER DATED SEPTEMBER 17, 1964, YOU PROTESTED AGAINST AWARD OF THE LABOR SURPLUS SET-ASIDE PORTION OF INVITATION FOR BIDS NO. 197-33 65, ISSUED ON JULY 24, 1964, BY THE UNITED STATES NAVAL ORDNANCE PLANT, LOUISVILLE, KENTUCKY, DEPARTMENT OF THE NAVY, TO EITHER OF THE TWO LOWEST BIDDERS.

THE NON-SET-ASIDE PORTION OF THE INVITATION CALLED FOR A QUANTITY OF 100,648 EACH BOMB FIN, MK 15 MOD O (ITEM 1); THE SET-ASIDE PORTION (ITEM 2) COVERED A SIMILAR QUANTITY. BIDS WERE OPENED ON AUGUST 31, 1964. EMTEX DIVISION OF MISSILE SYSTEMS CORPORATION OF TEXAS SUBMITTED THE LOW BID ($72.45 PER UNIT) ON THE NON-SET-ASIDE PORTION AND, ON SEPTEMBER 16, 1964, RECEIVED AWARD ON THAT PORTION AT A PRICE OF $7,291,947.60. SEPTEMBER 17, 1964, EMTEX RECEIVED AWARD FOR THE SET-ASIDE PORTION (ITEM 2), ALSO AT A PRICE OF $7,291,947.60.

YOU PROTEST ON THE BASIS THAT EMTEX FAILED TO QUOTE A PRICE FOR ITEM 2 (THE SET-ASIDE PORTION) OR TO INDICATE A GEOGRAPHICAL LOCATION FOR PERFORMING THE SET-ASIDE PORTION OF THE CONTRACT OR TO INDICATE WHETHER OR NOT ITS SUPPLIERS WOULD BE LARGE OR SMALL BUSINESS.

CLAUSE 20.0 OF THE INVITATION PROVIDED THAT A BIDDER DESIRING TO BE CONSIDERED FOR AWARD AS A LABOR SURPLUS AREA CONCERN MUST (A) MAKE AN AFFIRMATIVE REPRESENTATION THAT HE IS A LABOR SURPLUS AREA CONCERN AND (B) IDENTIFY IN HIS BID, PRIOR TO THE TIME OF OPENING, THE GEOGRAPHICAL AREAS IN WHICH HE PROPOSES TO PERFORM OR CAUSE TO BE PERFORMED A SUBSTANTIAL PROPORTION OF THE PRODUCTION OF THE CONTRACT. THE RECORD SHOWS THAT EMTEX REPRESENTED IN ITS BID (PAGE 10) THAT IT WAS A PERSISTENT LABOR SURPLUS AREA CONCERN AND A SMALL BUSINESS CONCERN; THE RECORD ALSO SHOWS THAT EMTEX INCLUDED WITH, AND AS PART OF, ITS BID A LETTER DATED AUGUST 28, 1964, STATING AS FOLLOWS:

"FOR PURPOSES OF EVALUATION FOR THE LABOR SURPLUS SET-ASIDE PORTION OF THIS IFB, EMTEX HEREWITH REPRESENTS THAT IT IS A PERSISTENT LABOR SURPLUS AREA CONCERN (AS DEFINED IN THE SCHEDULE OF THE IFB).

"THE AREAS WHERE SUCH WORK IS PROPOSED TO BE PERFORMED ARE AS FOLLOWS:

MEXIA, TEXAS

CRESSONA, PENNSYLVANIA

PITTSBURGH (ALLEGHENY COUNTY), PA.

BRISTOL, CONNECTICUT"

NAVY REPORTS THAT THE AREAS INDICATED IN THE LETTER ARE PERSISTENT LABOR SURPLUS AREAS.

AT THE TIME OF THE AWARD, EMTEX PROPOSED THAT A SUBSTANTIAL PROPORTION OF THE CONTRACT WORK WOULD BE PERFORMED BY ITS SUPPLIERS AT CRESSONA, PENNSYLVANIA; NEW KENSINGTON, PENNSYLVANIA; MASSENA, NEW YORK; BRISTOL, CONNECTICUT; AND GREENVILLE, TENNESSEE. NAVY REPORTS THAT THESE AREAS ARE CLASSIFIED AS AREAS OF PERSISTENT LABOR SURPLUS.

THE PRICE WHICH A BIDDER MUST MEET IN ORDER TO RECEIVE THE LABOR SURPLUS SET-ASIDE PORTION OF AN INVITATION IS DETERMINED SOLELY BY THE AWARD MADE ON THE OPEN ADVERTISED PORTION OF THE INVITATION. ASPR 1 804.2/D) (1); SEE 40 COMP. GEN. 489. CONSEQUENTLY, BIDDERS WERE NOT REQUIRED TO INSERT A PRICE ON ITEM 2 OF THE INVITATION (THE SET-ASIDE QUANTITY), SINCE THAT PRICE WAS TO BE SET BY THE AWARD ON ITEM 1, THE OPEN PORTION OF THE INVITATION.

WE NOTE THAT EMTEX CHANGED SOME OF ITS PROPOSED AREAS FOR PERFORMANCE AFTER THE BID OPENING. THE PURPOSE OF REQUIRING A BIDDER TO DESIGNATE IN HIS BID THE GEOGRAPHICAL AREAS IN WHICH HE PROPOSES TO PERFORM A LABOR SURPLUS SET-ASIDE IS TO ESTABLISH AT THE TIME OF BID OPENING THE BIDDER'S PRIORITY FOR THE SET-ASIDE NEGOTIATION. THUS WE HAVE HELD THAT A BIDDER MAY BE PERMITTED TO CHANGE HIS GEOGRAPHICAL AREAS FOR PERFORMANCE WHERE THE AREAS COINCIDE IN CATEGORY WITH THOSE ORIGINALLY DESIGNATED. 153267, JUNE 8, 1964. IT APPEARS THAT ALL THE AREAS DESIGNATED BY EMTEX WERE AREAS OF PERSISTENT LABOR SURPLUS.

FINALLY, THE RECORD SHOWS THAT EMTEX CERTIFIED ITSELF AS A SMALL BUSINESS CONCERN. ITS CERTIFICATION WAS NOT CHALLENGED PRIOR TO AWARD AND, IN ACCORDANCE WITH REGULATION, EMTEX WAS PROPERLY CONSIDERED FOR AWARD AS A SMALL BUSINESS CONCERN. SEE ASPR 1-703. THE FACT THAT SOME OR ALL OF ITS SUBCONTRACTORS MIGHT NOT QUALIFY AS SMALL BUSINESS CONCERNS WOULD NOT AFFECT THE SIZE STATUS OF EMTEX. B-150607, MAY 14, 1963.

ACCORDINGLY, YOUR PROTEST AGAINST THE SET-ASIDE AWARD TO EMTEX IS DENIED.