B-156718, JUN. 16, 1965

B-156718: Jun 16, 1965

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TO VECTOR TELEMETRY CORPORATION: REFERENCE IS MADE TO YOUR TELEGRAM OF MAY 6 AND TO YOUR LETTER DATED MAY 11. BE CANCELED AND THAT A NEW IFB BE ISSUED WHICH WILL PERMIT LARGE BUSINESS CONCERNS TO PARTICIPATE IN THE BIDDING. ONE OF WHICH WAS NONRESPONSIVE AND ANOTHER OF WHICH WAS BY A BIDDER WHICH HAS SINCE BECOME A LARGE BUSINESS CONCERN. A REASONABLE EXPECTATION DID NOT EXIST THAT BIDS WOULD BE RECEIVED FROM MORE THAN ONE QUALIFIED BIDDER AND THE TOTAL SMALL BUSINESS SET-ASIDE CLAUSE SHOULD THEREFORE HAVE BEEN REMOVED FROM THE INVITATION IN RESPONSE TO YOUR REQUEST. YOU ALSO FEEL THAT THE FACT THAT DATA-CONTROL WAS THE ONLY RESPONSIVE BIDDER UNDER IFB NO. P-1162 SUPPORTS YOUR POSITION THAT IT WAS TANTAMOUNT TO A SOLE SOURCE PROCUREMENT.

B-156718, JUN. 16, 1965

TO VECTOR TELEMETRY CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAM OF MAY 6 AND TO YOUR LETTER DATED MAY 11, 1965, REQUESTING THE CONTRACT FOR SUBCARRIER DISCRIMINATORS AND ASSOCIATED EQUIPMENT AWARDED TO DATA-CONTROL SYSTEMS UNDER NATIONAL AERONAUTICS AND SPACE ADMINISTRATION, WALLOPS STATION, INVITATION FOR BIDS NO. P-1162, A SMALL BUSINESS SET-ASIDE, BE CANCELED AND THAT A NEW IFB BE ISSUED WHICH WILL PERMIT LARGE BUSINESS CONCERNS TO PARTICIPATE IN THE BIDDING.

YOU CONTEND THAT SINCE A PREVIOUS ADVERTISEMENT FOR THE EQUIPMENT AS A SMALL BUSINESS SET-ASIDE UNDER THE SUBSEQUENTLY CANCELED IFB NO. P 1009 PRODUCED ONLY THREE BIDS, ONE OF WHICH WAS NONRESPONSIVE AND ANOTHER OF WHICH WAS BY A BIDDER WHICH HAS SINCE BECOME A LARGE BUSINESS CONCERN, A REASONABLE EXPECTATION DID NOT EXIST THAT BIDS WOULD BE RECEIVED FROM MORE THAN ONE QUALIFIED BIDDER AND THE TOTAL SMALL BUSINESS SET-ASIDE CLAUSE SHOULD THEREFORE HAVE BEEN REMOVED FROM THE INVITATION IN RESPONSE TO YOUR REQUEST. YOU ALSO FEEL THAT THE FACT THAT DATA-CONTROL WAS THE ONLY RESPONSIVE BIDDER UNDER IFB NO. P-1162 SUPPORTS YOUR POSITION THAT IT WAS TANTAMOUNT TO A SOLE SOURCE PROCUREMENT.

PARAGRAPH 1.706-5 (A) OF THE NASA PROCUREMENT REGULATION PROVIDES FOR SETTING ASIDE FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION THE ENTIRE AMOUNT OF AN INDIVIDUAL PROCUREMENT WHERE THERE IS A REASONABLE EXPECTATION THAT BIDS WILL BE OBTAINED FROM A SUFFICIENT NUMBER OF RESPONSIBLE SMALL BUSINESS CONCERNS SO THAT AWARDS WILL BE MADE AT REASONABLE PRICES. SUCH PARAGRAPH ALSO STATES "WHILE THE PAST PROCUREMENT HISTORY OF THE ITEM OR SIMILAR ITEMS IS IMPORTANT, IT IS NOT THE ONLY CONTROLLING FACTOR WHICH SHOULD BE CONSIDERED IN DETERMINING WHETHER A REASONABLE EXPECTATION EXISTS.'

THE RECORD SHOWS THAT THE PROCUREMENT WAS SET ASIDE FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION BASED ON A JOINT DETERMINATION BY THE SMALL BUSINESS ADMINISTRATION REPRESENTATIVE AND THE NASA CONTRACTING OFFICER AT WALLOPS STATION. IT IS REPORTED THAT IN MAKING THE DETERMINATION, CONSIDERATION WAS GIVEN TO THE STATION'S PROSPECTIVE BIDDERS LIST OF SUPPLIERS OF SUBCARRIER DISCRIMINATORS, AND INVITATIONS WERE SENT TO 30 OF THE FIRMS INCLUDING 14 KNOWN TO BE SMALL BUSINESS CONCERNS, FOUR OF WHICH HAD SUBMITTED BIDS ON PRIOR DISCRIMINATORS, AND INVITATIONS WERE SENT TO 30 OF THE FIRMS INCLUDING 14 KNOWN TO BE SMALL BUSINESS CONCERNS, FOUR OF WHICH HAD SUBMITTED BIDS ON PRIOR DISCRIMINATOR PROCUREMENTS AND WERE CONSIDERED ABLE TO COMPETE WITH EACH OTHER UNDER THE SUBJECT INVITATION. THE RECORD DOES NOT INDICATE THAT THE SBA REPRESENTATIVE OR THE CONTRACTING OFFICER HAD INFORMATION SHOWING THAT ANY OF SUCH PREVIOUS BIDDERS WOULD NOT SUBMIT BIDS ON IFB NO. P-1162 OR THAT BIDS WOULD NOT BE RECEIVED FROM THOSE OTHER SMALL BUSINESS CONCERNS HAVING CAPABILITY TO PRODUCE THE DISCRIMINATORS TO WHICH CONCERNS INVITATIONS WERE TO BE SENT. THE FACT THAT UNDER SUCH CIRCUMSTANCES ONLY DATA-CONTROL AND ONE OTHER FIRM, WHICH WAS DETERMINED TO BE A LARGE BUSINESS CONCERN, CHOSE TO SUBMIT BIDS DOES NOT IN OUR VIEW ESTABLISH SUCH A VITAL INADEQUACY IN THE BASIS FOR THE SMALL BUSINESS SET-ASIDE AS TO NULLIFY THE CONTRACT AWARDED. THIS CONNECTION WE HAVE BEEN INFORMALLY ADVISED BY NASA THAT ON TWO RECENT IFBS ISSUED BY LANGLEY RESEARCH CENTER SOLICITING BIDS FROM BOTH LARGE AND SMALL BUSINESS CONCERNS BIDS WERE RECEIVED FROM FOUR LARGE AND FOUR SMALL BUSINESS CONCERNS OUT OF THE 35 FIRMS SOLICITED ON THE FIRST IFB, AND OUT OF THE 30 FIRMS SOLICITED ON THE SECOND IFB ONLY ONE LARGE CONCERN AND ONE SMALL CONCERN SUBMITTED BIDS. IN EACH INSTANCE THE LOW BID WAS SUBMITTED BY A SMALL BUSINESS CONCERN WHICH ON THE SECOND IFB IS REPORTED TO BE DATA -CONTROL.

ALTHOUGH THE BROADER COMPETITION ANTICIPATED BY THE PROCURING ACTIVITY DID NOT MATERIALIZE IN THE CASE AT HAND, THE PURPOSE OF SUCH COMPETITION, AS SET OUT IN NASA PR 1.706-5 (A), IS TO INSURE THAT AWARD WILL BE MADE AT A FAIR PRICE TO THE GOVERNMENT. DATA-CONTROL'S BID OF $97,205 COMPARES FAVORABLY WITH ITS PRIOR BID OF $97,400 ON THE SAME ITEMS UNDER CANCELED IFB NO. P-1009 (WHICH BID WAS LESS THAN THE BID OF THE OTHER RESPONSIVE BIDDER) AND IS SUBSTANTIALLY LOWER THAN THE ADMINISTRATIVELY ESTIMATED COST. SUCH FACTORS DO NOT INDICATE THAT THE LIMITED COMPETITION ON THE READVERTISEMENT OF THE PROCUREMENT, EVEN IF ANTICIPATED, HAD ANY EFFECT ON DATA-CONTROL'S BID OR RESULTED IN THE GOVERNMENT NOT OBTAINING A FAIR AND REASONABLE PRICE FOR THE EQUIPMENT.

SECTION 15 OF THE SMALL BUSINESS ACT OF 1958, AS AMENDED, 15 U.S.C. 644, PROVIDES THAT SMALL BUSINESS CONCERNS SHALL RECEIVE ANY AWARD OF A CONTRACT WHERE THE SMALL BUSINESS ADMINISTRATION AND THE PROCURING AGENCY DETERMINE SUCH ACTION TO BE IN THE INTEREST OF ASSURING THAT A FAIR PROPORTION OF GOVERNMENT PURCHASES ARE PLACED WITH SMALL BUSINESS CONCERNS. A JOINT DETERMINATION TO SET ASIDE THE PROCUREMENT EXCLUSIVELY FOR SMALL BUSINESS WAS MADE BY THE SMALL BUSINESS ADMINISTRATION AND THE PROCURING ACTIVITY UNDER THE BROAD TERMS OF THE CITED STATUTE AND REGULATIONS PROMULGATED THEREUNDER. SUCH A DETERMINATION IS FUNDAMENTALLY A MATTER OF SOUND ADMINISTRATIVE DISCRETION AND IS ORDINARILY NOT SUBJECT TO REVIEW BY OUR OFFICE. WE DO NOT FEEL THAT THE CIRCUMSTANCES OF THIS CASE CLEARLY DEMONSTRATE AN ABUSE OF SUCH ADMINISTRATIVE DISCRETION BY THE GOVERNMENT OFFICIALS CONCERNED. IN VIEW THEREOF, WE FIND NO BASIS TO QUESTION THE VALIDITY OF THE SET-ASIDE AND YOUR PROTEST IS THEREFORE DENIED.

CONCERNING FUTURE PROCUREMENTS OF SUBCARRIER DISCRIMINATORS, THE CONTRACT AND PROCUREMENT OFFICER AT WALLOPS STATION ADVISED NASA HEADQUARTERS ON MARCH 29, 1965, THAT DUE TO THE EXPERIENCE OBTAINED ON IFB NO. P-1162 THAT STATION INTENDED TO ALLOW FULL AND FREE COMPETITION ON THE NEXT PROCUREMENT OF SIMILAR TYPE DISCRIMINATORS.