B-155581, JAN. 15, 1965

B-155581, JAN. 15, 1965

TO MR. NELSON DICK, VICE PRESIDENT, MONTGOMERY ELEVATOR COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 10, 1964, PROTESTING THE AWARD OF A CONTRACT TO THE TRIMON ELEVATOR COMPANY, INC., CHICAGO, ILLINOIS, FOR THE CONVERSION OF ELEVATORS, UNDER PROJECT 12- 5401/9564.11, TO A GROUP AUTOMATIC SUPERVISORY CONTROL SYSTEM AT THE VETERANS ADMINISTRATION RESEARCH HOSPITAL, CHICAGO, ILLINOIS.

IT APPEARS THAT IN RESPONSE TO INVITATION NO. 64-35, WHICH WAS ISSUED ON MAY 15, 1964, BY THE HOSPITAL, TWO BIDS WERE RECEIVED FOR THE WORK REQUIRED UNDER THE INVITATION, ONE FROM THE TRIMON ELEVATOR COMPANY, INC., IN THE TOTAL AMOUNT OF $198,670 AND THE OTHER FROM YOUR COMPANY IN THE AMOUNT OF $259,710. TRIMON'S BID WAS REJECTED UPON THE BASIS OF THE CORPORATION'S LACK OF EXPERIENCE AND, UPON APPEAL, THE MATTER WAS SUBMITTED TO THE SMALL BUSINESS ADMINISTRATION FOR INVESTIGATION AND CERTIFICATION AS TO THE COMPANY'S COMPETENCY. THE SMALL BUSINESS ADMINISTRATION CERTIFIED THAT THE CORPORATION WAS COMPETENT AS TO CAPACITY AND CREDIT AND, IN VIEW THEREOF, CONTRACT NO. 5225C-125 WAS AWARDED TO TRIMON.

YOU QUESTION THE PROPRIETY OF THE AWARD ON THE GROUND THAT THE TRIMON ELEVATOR COMPANY, INC., DOES NOT MEET THE EXPERIENCE REQUIREMENTS SET FORTH IN THE SPECIFICATIONS, IT BEING CONTENDED THAT IT IS A FIRM THAT MERELY ASSEMBLES ELEVATOR COMPONENTS AND DOES NOT MANUFACTURE ELEVATORS, THAT IT DOES NOT HAVE THE EXPERIENCE, TECHNICAL QUALIFICATIONS, AND FACILITIES TO INSTALL FOUR CAR GROUP SUPERVISORY CONTROL EQUIPMENT, AND THAT IT CANNOT GIVE A LIST SHOWING THREE OR MORE INSTALLATIONS COMPARABLE TO THE INSTALLATION HERE REQUIRED.

EVEN ASSUMING TRIMON'S INABILITY TO MEET SUCH QUALIFICATION REQUIREMENTS, IN ALL RESPECTS, THAT CIRCUMSTANCES WOULD NOT PRECLUDE CONSIDERATION OF ITS BID. IN CASES WHERE A BIDDER EXCLUDED BY THE PROVISIONS OF QUALIFICATION REQUIREMENTS SUCH AS HERE INVOLVED CANNOT OTHERWISE BE FOUND TO BE LACKING IN RESPONSIBILITY, WE HAVE HELD THE REQUIREMENTS TO BE IMPROPER AS AN UNAUTHORIZED RESTRICTION OF COMPETITION. SEE 39 COMP. GEN. 173, WHEREIN WE STATED THAT "THE STATEMENT OF SUCH QUALIFICATIONS SHOULD NOT BE CONSIDERED AS HAVING THE EFFECT OF TRANSFORMING THE PURELY FACTUAL QUESTION OF RESPONSIBILITY INTO A LEGAL QUESTION OF CONFORMITY TO THE INVITATION.'

IN CONNECTION WITH THE FOREGOING, SECTION 8/B) (7) OF THE SMALL BUSINESS ACT, AS AMENDED BY PUB.L. 85-836, 15 U.S.C. 637 (B) (7), PROVIDES THAT THE ISSUANCE OF A CERTIFICATE OF COMPETENCY BY THE SMALL BUSINESS ADMINISTRATION IS CONCLUSIVE UPON GOVERNMENT PROCUREMENT OFFICERS WITH RESPECT TO THE COMPETENCY, AS TO CAPACITY AND CREDIT, OF ANY SMALL BUSINESS CONCERN TO PERFORM A GOVERNMENT CONTRACT. MOREOVER, THE APPLICABLE FEDERAL PROCUREMENT REGULATIONS 1-1.708-1 STATES, IN PERTINENT PART, THAT:

"AS USED IN THIS SECTION,"CAPACITY" MEANS THE OVERALL ABILITY OF A PROSPECTIVE SMALL BUSINESS CONTRACTOR TO MEET QUALITY, QUANTITY, AND TIME REQUIREMENTS OF A PROPOSED CONTRACT AND INCLUDES ABILITY TO PERFORM, ORGANIZATION, EXPERIENCE, TECHNICAL KNOWLEDGE, SKILLS,"KNOW HOW," TECHNICAL EQUIPMENT, AND FACILITIES.'

UNDER THE STATUTE ABOVE CITED THE CONGRESS HAS THUS SPECIFICALLY LIMITED THE RIGHT OF PROCURING AGENCIES TO DETERMINE THE RESPONSIBILITY OF SMALL BUSINESS BIDDERS BY GIVING THE SMALL BUSINESS ADMINISTRATION THE FINAL WORD AS TO THOSE ELEMENTS OF RESPONSIBILITY INCLUDED IN THE TERMS ,CAPACITY AND CREDIT.' INASMUCH AS THE EXPERIENCE REQUIREMENTS SET FORTH IN THE INVITATION HERE CLEARLY GO TO MATTERS OF RESPONSIBILITY WHICH ARE PROPERLY INCLUDED IN THE DEFINITIONS OF ,CAPACITY" IN FEDERAL PROCUREMENT REGULATIONS 1-1.708 1, SUPRA, AND SINCE THE SMALL BUSINESS ADMINISTRATION'S CERTIFICATION IS IN EFFECT A DETERMINATION OF TRIMON'S RESPONSIBILITY WHICH IS CONCLUSIVE UPON THE PROCUREMENT AGENCY, IT MUST BE CONCLUDED THAT THE AWARD TO THAT CONCERN WAS VALID.

FURTHER, WE SEE NO MERIT TO YOUR CONTENTION THAT THERE IS A CONFLICT BETWEEN SECTION 3, PARAGRAPH "A," OF THE GENERAL REQUIREMENTS AND SECTION 12, PARAGRAPH "A," OF THE GENERAL CONDITIONS. THE GENERAL REQUIREMENTS PERTAIN ONLY TO THE ACTUAL CONSTRUCTION WORK, WHEREAS THE PURCHASE OF EQUIPMENT UNDER SECTION 12 OF THE GENERAL CONDITIONS IS NOT RELATED TO THE AMOUNT OF CONSTRUCTION WORK THE CONTRACTOR ITSELF MUST PERFORM. ALSO, THE CONTRACTOR UNDER SECTION 12 AGREES TO ACCOMPLISH THE MAXIMUM AMOUNT OF SUBCONTRACTING WITH SMALL BUSINESS CONCERNS THAT THE CONTRACTOR "FINDS TO BE CONSISTENT WITH THE EFFICIENT PERFORMANCE OF THIS CONTRACT.' THEREFORE, THE CONTRACTOR IS NOT OBLIGATED TO SUBCONTRACT WITH ANY SMALL BUSINESS CONCERNS IF IT IS NOT CONSISTENT WITH THE EFFICIENT PERFORMANCE OF THE CONTRACT.