B-155513, FEB. 8, 1965

B-155513: Feb 8, 1965

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INC.: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED NOVEMBER 1. WHICH WAS ISSUED BY THE DIRECTORATE OF PROCUREMENT AND PRODUCTION. YOU CONTEND THAT RESTRICTION OF THIS PROCUREMENT TO SMALL BUSINESS FIRMS IS A DISCRIMINATION AGAINST YOU AS A LARGE BUSINESS FIRM. WHICH IS IN KEEPING WITH THE NATIONAL POLICY AND THE SMALL BUSINESS ACT. IS IMPLEMENTED BY ARMED SERVICES PROCUREMENT REGULATION 1-706.5 (A) (1) WHICH PROVIDES. * * * SHALL BE SET ASIDE FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION * * * IF THE CONTRACTING OFFICER DETERMINES THAT THERE IS REASONABLE EXPECTATION THAT BIDS OR PROPOSALS WILL BE OBTAINED FROM A SUFFICIENT NUMBER OF RESPONSIBLE SMALL BUSINESS CONCERNS SO THAT AWARDS WILL BE MADE AT REASONABLE PRICES. * * *" THE DEPARTMENT OF THE AIR FORCE REPORTS THAT IN 1960 AND 1964 ULTRASONIC CLEANERS WERE PROCURED IN ACCORDANCE WITH TWO-STEP FORMAL ADVERTISING AND THAT AT LEAST SIX SMALL BUSINESS FIRMS SUBMITTED ACCEPTABLE TECHNICAL PROPOSALS UNDER BOTH THE FIRST AND SECOND STEPS OF EACH PROCUREMENT.

B-155513, FEB. 8, 1965

TO BLACKSTONE ULTRASONICS, INC.:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED NOVEMBER 1, 1964, PROTESTING THE TOTAL SMALL BUSINESS SET-ASIDE UNDER DEPARTMENT OF THE AIR FORCE INVITATION NO. 41-608-65-286, DATED OCTOBER 6, 1964.

THE INVITATION, WHICH WAS ISSUED BY THE DIRECTORATE OF PROCUREMENT AND PRODUCTION, SAN ANTONIO AIR MATERIAL AREA, KELLY AIR FORCE BASE, SOLICITED BIDS FOR FURNISHING 110 ULTRASONIC CLEANERS, SPARE PARTS, AND DATA, AND PROVIDED FOR A TOTAL SET-ASIDE FOR PARTICIPATION BY SMALL BUSINESS FIRMS ONLY. YOU CONTEND THAT RESTRICTION OF THIS PROCUREMENT TO SMALL BUSINESS FIRMS IS A DISCRIMINATION AGAINST YOU AS A LARGE BUSINESS FIRM.

THE LONG RECOGNIZED POLICY OF THE DEPARTMENT OF DEFENSE THAT A FAIR PROPORTION OF THE DEPARTMENT'S TOTAL PURCHASES OF SUPPLIES AND SERVICES BE PLACED WITH SMALL BUSINESS CONCERNS, WHICH IS IN KEEPING WITH THE NATIONAL POLICY AND THE SMALL BUSINESS ACT, IS IMPLEMENTED BY ARMED SERVICES PROCUREMENT REGULATION 1-706.5 (A) (1) WHICH PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"SUBJECT TO ANY APPLICABLE PREFERENCE FOR LABOR SURPLUS AREA SET ASIDE * * * THE ENTIRE AMOUNT OF AN INDIVIDUAL PROCUREMENT OR A CLASS OF PROCUREMENTS, * * * SHALL BE SET ASIDE FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION * * * IF THE CONTRACTING OFFICER DETERMINES THAT THERE IS REASONABLE EXPECTATION THAT BIDS OR PROPOSALS WILL BE OBTAINED FROM A SUFFICIENT NUMBER OF RESPONSIBLE SMALL BUSINESS CONCERNS SO THAT AWARDS WILL BE MADE AT REASONABLE PRICES. * * *"

THE DEPARTMENT OF THE AIR FORCE REPORTS THAT IN 1960 AND 1964 ULTRASONIC CLEANERS WERE PROCURED IN ACCORDANCE WITH TWO-STEP FORMAL ADVERTISING AND THAT AT LEAST SIX SMALL BUSINESS FIRMS SUBMITTED ACCEPTABLE TECHNICAL PROPOSALS UNDER BOTH THE FIRST AND SECOND STEPS OF EACH PROCUREMENT. THE AIR FORCE FURTHER REPORTS THAT THE CONTRACT FOR THE 1960 PROCUREMENT WAS AWARDED TO THE RESPONSIBLE SMALL BUSINESS FIRM SUBMITTING THE LOW RESPONSIVE BID. THE CONTRACT COVERING THE 1964 PROCUREMENT, HOWEVER, WAS AWARDED TO A BIG BUSINESS CONCERN BUT ONLY AFTER IT WAS FOUND NECESSARY TO REJECT THE BID OF A SMALL BUSINESS FIRM AS BEING NONRESPONSIVE. MOREOVER, IT IS SIGNIFICANT THAT IN THIS CASE SEVEN OF THE EIGHT BIDS RECEIVED IN RESPONSE TO INVITATION NO. 41-608-65-286, WERE FROM SMALL BUSINESS FIRMS AND RANGED FROM TOTAL PRICES OF $313,448 TO $386,600. THE ONLY BID RECEIVED FROM BIG BUSINESS WAS IN THE SUBSTANTIALLY HIGHER TOTAL AMOUNT OF $902,000. THUS, IN THE LIGHT OF THE BID RESPONSES IN THIS CASE AND IN THE TWO PREVIOUS PROCUREMENTS IN 1960 AND 1964, IT IS CLEARLY ESTABLISHED THAT THERE WERE A SUFFICIENT NUMBER OF SMALL BUSINESS CONCERNS WHICH REASONABLY COULD HAVE BEEN EXPECTED TO RESPOND TO THE INVITATION AS WOULD ASSURE AN AWARD OF THE CONTRACT AT A REASONABLE PRICE.

ACCORDINGLY, WE SEE NO LEGAL BASIS FOR OBJECTING TO THE FORM IN WHICH INVITATION NO. 41-608-65-286 WAS ISSUED UNDER THE CIRCUMSTANCES REPORTED AND, THEREFORE, YOUR PROTEST IS DENIED.