B-156042, JUN. 21, 1965

B-156042: Jun 21, 1965

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INC.: REFERENCE IS MADE TO YOUR LETTER OF JUNE 8. AT THE BEGINNING OF THE YEAR UNDER INVITATION FOR BIDS 65-32 BE CANCELED BECAUSE THE SIZE APPEALS BOARD AND THE ADMINISTRATOR OF THE SMALL BUSINESS ADMINISTRATION (SBA) RECENTLY HAVE REVERSED THE DETERMINATION MADE AT THE BEGINNING OF THE YEAR BY THE ATLANTA REGIONAL OFFICE OF THE SBA THAT VOGUE CLEANERS IS A SMALL BUSINESS FOR GOVERNMENT PROCUREMENTS OF LAUNDRY AND DRY CLEANING SERVICE. REQUIRES THAT "OFFICES OF THE GOVERNMENT HAVING PROCUREMENT * * * POWERS * * * SHALL ACCEPT AS CONCLUSIVE THE (SMALL BUSINESS) ADMINISTRATION'S DETERMINATION AS TO WHICH ENTERPRISES ARE TO BE DESIGNATED . THE AWARD WHICH WAS MADE TO VOGUE CLEANERS RESULTED FROM THE ATLANTA BRANCH OF THE SBA ADVISING THE PROCUREMENT OFFICE THAT THE COMPANY WAS A SMALL BUSINESS FOR THE PURPOSE OF THE PROCUREMENT.

B-156042, JUN. 21, 1965

TO MR. JACK P. INSCO, SECRETARY-TREASURER, HOME SERVICE LAUNDRY AND CLEANERS, INC.:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 8, 1965, REQUESTING THAT THE CONTRACT FOR LAUNDRY AND DRY CLEANING SERVICE AWARDED TO VOGUE CLEANERS AND LAUNDRY, INC., AT THE BEGINNING OF THE YEAR UNDER INVITATION FOR BIDS 65-32 BE CANCELED BECAUSE THE SIZE APPEALS BOARD AND THE ADMINISTRATOR OF THE SMALL BUSINESS ADMINISTRATION (SBA) RECENTLY HAVE REVERSED THE DETERMINATION MADE AT THE BEGINNING OF THE YEAR BY THE ATLANTA REGIONAL OFFICE OF THE SBA THAT VOGUE CLEANERS IS A SMALL BUSINESS FOR GOVERNMENT PROCUREMENTS OF LAUNDRY AND DRY CLEANING SERVICE.

SECTION 8 (B) (6) OF THE SMALL BUSINESS ACT, 15 U.S.C. 637 (B) (6), REQUIRES THAT "OFFICES OF THE GOVERNMENT HAVING PROCUREMENT * * * POWERS * * * SHALL ACCEPT AS CONCLUSIVE THE (SMALL BUSINESS) ADMINISTRATION'S DETERMINATION AS TO WHICH ENTERPRISES ARE TO BE DESIGNATED ,SMALL-BUSINESS CONCERNS.'"

APPARENTLY, THE AWARD WHICH WAS MADE TO VOGUE CLEANERS RESULTED FROM THE ATLANTA BRANCH OF THE SBA ADVISING THE PROCUREMENT OFFICE THAT THE COMPANY WAS A SMALL BUSINESS FOR THE PURPOSE OF THE PROCUREMENT. THEREFORE, AT THE TIME OF AWARD, THE ONLY SBA SIZE DETERMINATION OF WHICH THE CONTRACTING OFFICE WAS AWARE WAS THAT VOGUE CLEANERS WAS A SMALL BUSINESS CONCERN.

WHILE THE SBA HAS NOW DETERMINED THAT VOGUE CLEANERS WAS NOT ELIGIBLE AS A SMALL BUSINESS CONCERN FOR PURPOSES OF AWARD UNDER THE SUBJECT INVITATION, SINCE AT THE TIME OF AWARD THERE WAS AN SBA DETERMINATION THAT VOGUE CLEANERS WAS A SMALL BUSINESS CONCERN AND THE SMALL BUSINESS ACT REQUIRES THE PROCUREMENT OFFICES OF THE GOVERNMENT TO ACCEPT SUCH DETERMINATIONS AS CONCLUSIVE, THE ACTION OF THE CONTRACTING OFFICER IN MAKING AN AWARD TO VOGUE CLEANERS WOULD APPEAR TO HAVE RESULTED IN A VALID AND BINDING CONTRACT. IN THESE CIRCUMSTANCES, OUR OFFICE DOES NOT ORDINARILY CONSIDER IT TO BE IN THE GOVERNMENT'S BEST INTEREST TO REQUIRE CANCELLATION OF A CONTRACT. IN THAT CONNECTION, SEE 41 COMP. GEN. 252 WHEREIN OUR OFFICE HELD THAT A CONTRACT AWARDED ON THE BASIS OF PREAWARD DETERMINATIONS BY SBA TO THE EFFECT THAT A SUCCESSFUL BIDDER WAS A SMALL BUSINESS CONCERN WOULD NOT BE DISTURBED WHERE SUBSEQUENT TO AWARD THE SBA DETERMINED THAT THE BIDDER WAS NOT A SMALL BUSINESS AT THE TIME AWARD WAS MADE.