B-156904, AUG. 19, 1965

B-156904: Aug 19, 1965

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

THE INVITATION WAS PREPARED ON STANDARD FORM 33 (OCT. 1957 EDITION). TWO BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. THE CONTRACT WAS AWARDED TO ROBINSON AS THE LOW BIDDER. IS THAT THE AWARD OF THE CONTRACT TO ROBINSON WAS UNAUTHORIZED SINCE IT IS A LARGE BUSINESS CONCERN AND THE INVITATION INVITED BIDS ONLY FROM SMALL BUSINESS. IN SUPPORT OF YOUR CONTENTION THAT THE INVITATION WAS RESTRICTED TO SMALL BUSINESS. YOU DRAW ATTENTION TO THE FACT THAT BIDDERS WERE REQUIRED TO INDICATE ON A SHEET ATTACHED TO STANDARD FORM 33 (WHICH WAS REQUIRED TO BE ACKNOWLEDGED BY BIDDERS AS AN AMENDMENT THERETO) WHETHER THEY HAD. OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS ON THE REVERSE OF STANDARD FORM 33 WAS DELETED BY A PROVISION CONTAINED IN THE ADDITIONAL TERMS AND CONDITIONS INCORPORATED IN THE INVITATION WHICH ALSO SUBSTITUTED THE FOLLOWING PROVISION IN LIEU THEREOF: "DEFINITION OF SMALL BUSINESS: A SMALL BUSINESS CONCERN FOR THE PURPOSE OF GOVERNMENT PROCUREMENT IS A CONCERN.

B-156904, AUG. 19, 1965

TO PHILIP ANTHONY MESI, ESQ.:

REFERENCE IT MADE TO YOUR LETTER OF JUNE 1, 1965, PROTESTING ON BEHALF OF AAA PIPE CLEANING CORPORATION AGAINST THE AWARD OF A CONTRACT TO ROBINSON PIPE CLEANING COMPANY UNDER INVITATION NO. SCC-18-049-65 77, ISSUED BY THE U.S. ARMY JOINT SUPPORT COMMAND, FORT RITCHIE, MARYLAND.

THE INVITATION WAS PREPARED ON STANDARD FORM 33 (OCT. 1957 EDITION), AND IT INVITED BIDS, TO BE OPENED MAY 12, 1965, FOR FURNISHING ALL LABOR, MATERIAL AND EQUIPMENT NECESSARY FOR THE CLOSED-CIRCUIT TELEVISION INSPECTION OF THE SANITARY SEWER SYSTEM AT FORT RITCHIE.

TWO BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION, ONE FROM ROBINSON PIPE CLEANING COMPANY IN THE AMOUNT OF $6,543.21, AND THE OTHER FROM AAA IN THE AMOUNT OF $9,916. THE CONTRACT WAS AWARDED TO ROBINSON AS THE LOW BIDDER, ON MAY 28, 1965.

THE BASIS FOR AAA'S PROTEST, AS SET FORTH IN YOUR LETTER, IS THAT THE AWARD OF THE CONTRACT TO ROBINSON WAS UNAUTHORIZED SINCE IT IS A LARGE BUSINESS CONCERN AND THE INVITATION INVITED BIDS ONLY FROM SMALL BUSINESS.

IN SUPPORT OF YOUR CONTENTION THAT THE INVITATION WAS RESTRICTED TO SMALL BUSINESS, YOU DRAW ATTENTION TO THE FACT THAT BIDDERS WERE REQUIRED TO INDICATE ON A SHEET ATTACHED TO STANDARD FORM 33 (WHICH WAS REQUIRED TO BE ACKNOWLEDGED BY BIDDERS AS AN AMENDMENT THERETO) WHETHER THEY HAD, OR HAD NOT, PREVIOUSLY BEEN DENIED A SMALL BUSINESS CERTIFICATE BY THE SMALL BUSINESS ADMINISTRATION. ALSO, YOU DRAW ATTENTION TO THE FACT THAT PARAGRAPH 10, DEFINITION OF SMALL BUSINESS, OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS ON THE REVERSE OF STANDARD FORM 33 WAS DELETED BY A PROVISION CONTAINED IN THE ADDITIONAL TERMS AND CONDITIONS INCORPORATED IN THE INVITATION WHICH ALSO SUBSTITUTED THE FOLLOWING PROVISION IN LIEU THEREOF:

"DEFINITION OF SMALL BUSINESS: A SMALL BUSINESS CONCERN FOR THE PURPOSE OF GOVERNMENT PROCUREMENT IS A CONCERN, INCLUDING ITS AFFILIATES, WHICH IS INDEPENDENTLY OWNED AND OPERATED, IS NOT DOMINANT IN THE FIELD OF OPERATION IN WHICH IT IS BIDDING ON GOVERNMENT CONTRACTS AND CAN FURTHER QUALIFY UNDER THE CRITERIA CONCERNING NUMBER OF EMPLOYEES, AVERAGE ANNUAL RECEIPTS, OR OTHER CRITERIA, AS PRESCRIBED BY THE SMALL BUSINESS ADMINISTRATION. (SEE CODE OF FEDERAL REGULATIONS, TITLE 13, PART 121, AS AMENDED, WHICH CONTAINS DETAILED INDUSTRY DEFINITIONS AND RELATED PROCEDURES.)"

FURTHERMORE, YOU STATE THAT PRIOR TO BIDDING A STANDARD FORM 129 WAS, UPON REQUEST, SUBMITTED TO THE CONTRACTING OFFICER BY AAA "TO QUALIFY SAID CORPORATION TO BID THE ABOVE CONTRACT.'

STANDARD FORM 129 (AUG. 1952), A SPECIMEN OF WHICH APPEARS AT SECTION 1- 16.901-129 OF THE FEDERAL PROCUREMENT REGULATIONS, 41 CFR 1 16-901-129, REVISED AS OF JAN. 1, 1965, IS ENTITLED ,BIDDER'S MAILING LIST APPLICATION," AND THE INFORMATION CALLED FOR THEREIN WOULD RELATE NO MORE TO SMALL BUSINESS THAN TO LARGE BUSINESS. ON THE REVERSE (PART 2) OF THE FORM, UNDER THE HEADING "INFORMATION AND INSTRUCTIONS," IT IS STATED:

"PERSONS OR CONCERNS WISHING TO BE ADDED TO A PARTICULAR AGENCY'S BIDDER'S MAILING LIST FOR SUPPLIES OR SERVICES SHALL FILE THIS PROPERLY COMPLETED AND CERTIFIED BIDDER'S MAILING LIST APPLICATION, TOGETHER WITH SUCH OTHER LISTS AS MAY BE ATTACHED TO THE APPLICATION FORM, WITH EACH PROCUREMENT OFFICE OF THE FEDERAL AGENCY WITH WHICH THEY DESIRE TO DO BUSINESS. * * *"

THE USE OF STANDARD FORM 129 IN CONNECTION WITH THE ESTABLISHMENT AND MAINTENANCE OF BIDDERS MAILING LISTS IS PRESCRIBED BY SECTION 1 2.205-1 OF THE FEDERAL PROCUREMENT REGULATIONS, 41 CFR 1-205-1, WHICH STATES IN SUBSECTION (B) THAT "ALL ELIGIBLE AND QUALIFIED CONCERNS WHICH HAVE SUBMITTED BIDDERS MAILING LIST APPLICATIONS, OR WHICH THE PROCURING ACTIVITY CONSIDERS CAPABLE OF FILLING THE REQUIREMENTS OF A PARTICULAR PROCUREMENT, SHALL BE PLACED ON THE APPROPRIATE BIDDERS MAILING LIST.' THE FORM IS THUS REQUIRED TO BE FILED BY LARGE BUSINESS CONCERNS, AS WELL AS SMALL BUSINESS CONCERNS, WHICH DESIRE TO BE PLACED ON A FEDERAL AGENCY'S BIDDERS MAILING LIST.

PARAGRAPH 16-102 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), 32 CFR 16-102, REVISED AS OF JAN. 1, 1965, PROVIDES THAT STANDARD FORM 33 (WHICH IS A COMBINATION INVITATION FOR BID, SCHEDULE, AND AWARD FORM FOR SUPPLY CONTRACTS PROMULGATED BY THE ADMINISTRATOR OF GENERAL SERVICES) MAY BE USED BY THE DEFENSE AGENCIES TO EFFECT PROCUREMENT BY FORMAL ADVERTISING PROVIDED THE INVITATION FOR BIDS AND SCHEDULE PORTIONS OF STANDARD FORM 33 ARE PREPARED IN ACCORDANCE WITH ASPR 2-201. SUBSECTION (A) OF THAT PARAGRAPH, REVISED AS OF APRIL 1, 1965, PROVIDES IN PERTINENT PART THAT FOR SUPPLY AND SERVICE CONTRACTS THE INVITATION FOR BIDS SHALL CONTAIN THE FOLLOWING INFORMATION IF APPLICABLE TO THE PROCUREMENT INVOLVED:

"/XXXV) PENDING REVISION OF STANDARD FORMS 30 AND 33, THE FOLLOWING DEFINITION OF SMALL BUSINESS SHALL BE SUBSTITUTED FOR THE CURRENTLY CITED DEFINITIONS THEREIN:

"/THE IDENTICAL DEFINITION OF SMALL BUSINESS WHICH WAS INSERTED AS PARAGRAPH 10 OF THE TERMS AND CONDITIONS INCORPORATED IN THE SUBJECT INVITATION BY THE ADDITIONAL TERMS AND CONDITIONS THEREOF, SUPRA, IS HERE SET FORTH)

"/XXXVI) WHEN THE PROCUREMENT INVOLVES A SET-ASIDE FOR * * * SMALL BUSINESS CONCERNS, THE FOLLOWING PROVISION WILL BE PLACED ON THE FACE OF THE INVITATION OR ON A COVER SHEET.

"THIS IS A--- PERCENT SET ASIDE FOR (SMALL BUSINESS) * * * CONCERNS. (MAR. 1964)"

STANDARD FORM 33, INCLUDING ALL THE TERMS AND CONDITIONS ON THE REVERSE (PAGE 2) THEREOF, WAS DESIGNED TO BE AND IS REGULARLY USED IN CONNECTION WITH ADVERTISED PROCUREMENTS OF SUPPLIES AND SERVICES WITHOUT REGARD TO WHETHER THE PROCUREMENTS ARE SET ASIDE FOR SMALL BUSINESS CONCERNS.

THE SEVERAL PROVISIONS IN THE FORM REQUIRING BIDDERS TO INDICATE WHETHER OR NOT THEY ARE SMALL BUSINESS WERE DESIGNED NOT ONLY TO FACILITATE THE DETERMINATION BY THE PROCURING ACTIVITY OF A BIDDER'S STATUS WHERE A SMALL BUSINESS SET-ASIDE IS INVOLVED, BUT ALSO TO FACILITATE THE DETERMINATION OF RESPONSIBILITY IN THOSE INSTANCES WHERE THE QUESTION OF RESPONSIBILITY IS REQUIRED TO BE REFERRED TO THE SMALL BUSINESS ADMINISTRATION. ADDITION, SUCH INFORMATION IS MATERIAL IN CASE OF TIE BIDS, AND IS NECESSARY TO ENABLE THE AGENCIES TO FURNISH REPORTS REQUIRED BY CONGRESSIONAL COMMITTEES AS TO THE NUMBER AND VOLUME OF CONTRACTS AWARDED TO SMALL BUSINESS FIRMS.

IF THE PROCURING ACTIVITY HAD INTENDED TO RESTRICT THE SUBJECT PROCUREMENT TO SMALL BUSINESS, IT WOULD HAVE BEEN REQUIRED TO INCLUDE A PROVISION SIMILAR TO THAT SET FORTH IN ASPR 2-201 (A) (XXXVI), SUPRA, IN THE INVITATION. NOT ONLY WAS NO SUCH PROVISION INCLUDED THEREIN, BUT THE PAPERS AND DOCUMENTS FURNISHED TO US IN THIS MATTER BY THE DEPARTMENT OF THE ARMY INCLUDE A MEMORANDUM FOR THE RECORD DATED APRIL 15, 1965, PREPARED BY MILDRED B. SHROYER, PROCUREMENT AGENT AT THE PURCHASING AND CONTRACTING OFFICE, U.S. ARMY JOINT SUPPORT COMMAND, FORT RITCHIE, WHICH STATES THAT SHE CALLED MR. FORENZKY, A REPRESENTATIVE OF THE SMALL BUSINESS ADMINISTRATION AT BALTIMORE, MARYLAND, ON APRIL 14, 1965, REGARDING THE POSSIBILITY OF A SMALL BUSINESS SET-ASIDE IN CONNECTION WITH THE SUBJECT PROCUREMENT, AND THAT MR. FORENSKY CALLED BACK ON APRIL 15 AND ,RECOMMENDED THAT WE ISSUE IFB ON OPEN COMPETITION AND NOT A SET ASIDE AS WE HAVE NOT HAD PREVIOUS PURCHASING EXPERIENCE TO KNOW IF WE WILL RECEIVE BID FROM SMALL BUSINESS FIRM.'

IT IS TRUE THAT, FOLLOWING THE RECEIPT OF YOUR LETTER OF MAY 13, 1965, PROTESTING, ON BEHALF OF AAA, AGAINST THE AWARD OF ANY CONTRACT TO ROBINSON PIPE CLEANING COMPANY ON THE GROUNDS THAT THE INVITATION WAS A SET-ASIDE FOR SMALL BUSINESS AND ROBINSON COULD NOT QUALIFY AS SUCH, THE CONTRACTING OFFICER REQUESTED A SIZE DETERMINATION ON ROBINSON BY THE SMALL BUSINESS ADMINISTRATION. HOWEVER, AS INDICATED BY LETTER OF MAY 25, 1965, FROM THE CHIEF OF THE PROCUREMENT AND MANAGEMENT ASSISTANCE DIVISION, SMALL BUSINESS ADMINISTRATION, PHILADELPHIA, PENNSYLVANIA, TO THE CONTRACTING OFFICER, A COPY OF WHICH WAS ENCLOSED WITH YOUR LETTER OF JUNE 1, 1965, THE REQUEST FOR A SIZE DETERMINATION WAS DISCOVERED TO HAVE BEEN MADE IN ERROR AND WAS WITHDRAWN AFTER THE CONTRACTING OFFICER'S ATTENTION WAS DIRECTED TO THE FACT THAT THE INVITATION INVOLVED WAS NOT RESTRICTED TO SMALL BUSINESS.

ACCORDINGLY, NO LEGAL BASIS EXISTS FOR QUESTIONING THE ACTION OF THE DEPARTMENT OF THE ARMY IN AWARDING THE CONTRACT TO ROBINSON PIPE CLEANING COMPANY, AND YOUR PROTEST MUST THEREFORE BE DENIED.