B-157684, FEB. 1, 1966, 45 COMP. GEN. 471

B-157684: Feb 1, 1966

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SECTION 1.801-2 (A) OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDING THAT A "LABOR SURPLUS AREA" MEANS A GEOGRAPHICAL AREA WHICH AT THE TIME OF AWARD IS CLASSIFIED BY THE DEPARTMENT OF LABOR AS AN AREA OF SUBSTANTIAL AND PERSISTENT LABOR SURPLUS. AS THE MATTER OF WHETHER OR NOT A SUBSTANTIAL PROPORTION - MORE THAN FIFTY PERCENT - OF THE PROCUREMENT WILL BE PERFORMED IN THE DESIGNATED AREA IS PRIMARILY WITHIN THE JURISDICTION OF THE PROCURING AGENCY. THE BONA FIDES OF THE AWARD WILL NOT BE QUESTIONED ON THAT BASIS. 1966: REFERENCE IS MADE TO YOUR TELEGRAM OF SEPTEMBER 17. NEGOTIATIONS FOR AWARD OF THE SET-ASIDE PORTION WERE TO BE CONDUCTED ONLY WITH RESPONSIBLE LABOR SURPLUS AREA CONCERNS (AND SMALL BUSINESS CONCERNS TO THE EXTENT INDICATED) WHO HAD SUBMITTED RESPONSIVE BIDS ON THE NON-SET- ASIDE PORTION AT A UNIT PRICE NO GREATER THAN 120 PERCENT OF THE HIGHEST UNIT PRICE AT WHICH AN AWARD WAS MADE ON THE NON-SET-ASIDE PORTION.

B-157684, FEB. 1, 1966, 45 COMP. GEN. 471

CONTRACTS - AWARDS - LABOR SURPLUS AREAS - CLASSIFICATION CHANGES THE INFORMATION CONTAINED IN A DEPARTMENT OF LABOR BULLETIN THAT A GEOGRAPHICAL AREA HAD CEASED TO BE IN A SUBSTANTIAL AND PERSISTENT UNEMPLOYMENT CATEGORY PRIOR TO AN AWARD TO A LARGE BUSINESS CONCERN QUALIFYING AS A LABOR SURPLUS AREA CONCERN AT THE TIME OF AWARD WHICH, MAILED DIRECTLY BY THE DEPARTMENT, DID NOT REACH THE PROCURING AGENCY UNTIL AFTER AWARD, HAS NO BEARING ON THE LEGALITY OF THE AWARD AND DOES NOT AFFECT THE VALIDITY OF THE CONTRACT, SECTION 1.801-2 (A) OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDING THAT A "LABOR SURPLUS AREA" MEANS A GEOGRAPHICAL AREA WHICH AT THE TIME OF AWARD IS CLASSIFIED BY THE DEPARTMENT OF LABOR AS AN AREA OF SUBSTANTIAL AND PERSISTENT LABOR SURPLUS, AND AS THE MATTER OF WHETHER OR NOT A SUBSTANTIAL PROPORTION - MORE THAN FIFTY PERCENT - OF THE PROCUREMENT WILL BE PERFORMED IN THE DESIGNATED AREA IS PRIMARILY WITHIN THE JURISDICTION OF THE PROCURING AGENCY, THE BONA FIDES OF THE AWARD WILL NOT BE QUESTIONED ON THAT BASIS.

TO AUDIO DEVICES, INC., FEBRUARY 1, 1966:

REFERENCE IS MADE TO YOUR TELEGRAM OF SEPTEMBER 17, 1965, AND SUPPLEMENTING LETTER OF SEPTEMBER 27, 1965, PROTESTING AGAINST THE AWARD OF A CONTRACT TO MINNESOTA MINING AND MANUFACTURING COMPANY (3M) UNDER IFB 33-601-65-339, ISSUED BY THE 2750TH AIR BASE WING,EWP, WRIGHT PATTERSON AIR FORCE BASE, OHIO.

THE INVITATION AS AMENDED EFFECTIVE JULY 13, 1965, SOLICITED BIDS ON A UNIT PRICE BASIS (TO BE OPENED JULY 22, 1965) FOR THE FURNISHING OF AN ESTIMATED QUANTITY OF REELS OF IBM MAGNETIC TYPE TAPE AND RELATED EQUIPMENT DESCRIBED UNDER ITEMS 1, 1A, AND 1B, AND AN ESTIMATED QUANTITY OF REELS OF RCA MAGNETIC TYPE TAPE AND RELATED EQUIPMENT DESCRIBED UNDER ITEMS 2 AND 2A, AS ORDERED BY THE CONTRACTING OFFICER DURING THE PERIOD SEPTEMBER 1, 1965 THROUGH AUGUST 31, 1966. THE INVITATION PROVIDED THAT THE PROCUREMENT OF AN EQUAL NUMBER OF REELS OF THE TWO TYPES OF TAPE, TOGETHER WITH RELATED EQUIPMENT, HAD BEEN SET ASIDE FOR AWARD ONLY TO ONE OR MORE LABOR SURPLUS AREA CONCERNS AND, TO A LIMITED EXTENT, TO SMALL BUSINESS CONCERNS WHICH DID NOT QUALIFY AS LABOR SURPLUS AREA CONCERNS. NEGOTIATIONS FOR AWARD OF THE SET-ASIDE PORTION WERE TO BE CONDUCTED ONLY WITH RESPONSIBLE LABOR SURPLUS AREA CONCERNS (AND SMALL BUSINESS CONCERNS TO THE EXTENT INDICATED) WHO HAD SUBMITTED RESPONSIVE BIDS ON THE NON-SET- ASIDE PORTION AT A UNIT PRICE NO GREATER THAN 120 PERCENT OF THE HIGHEST UNIT PRICE AT WHICH AN AWARD WAS MADE ON THE NON-SET-ASIDE PORTION, FOLLOWING A STATED ORDER OF GROUP PRIORITY. GROUP 1 WAS DESCRIBED AS "PERSISTENT LABOR SURPLUS AREA CONCERNS WHICH ARE ALSO SMALL BUSINESS CONCERNS; " GROUP 2 AS "OTHER PERSISTENT LABOR SURPLUS AREA CONCERNS; " GROUP 3 AS "SUBSTANTIAL LABOR SURPLUS AREA CONCERNS WHICH ARE ALSO SMALL BUSINESS CONCERNS; " GROUP 4 AS "OTHER SUBSTANTIAL LABOR SURPLUS AREA CONCERNS; " AND GROUP 5 AS ,SMALL BUSINESS CONCERNS WHICH ARE NOT SURPLUS AREA CONCERNS.'

INSOFAR AS HERE MATERIAL, THE CLAUSE ENTITLED "NOTICE OF LABOR SURPLUS AREA SET-ASIDE (NOV. 1964)," INCORPORATED IN THE INVITATION, PROVIDED THAT THE TERM "PERSISTENT LABOR SURPLUS AREA" MEANT AN AREA WHICH "IS CLASSIFIED BY THE DEPARTMENT OF LABOR AS AN "AREA OF SUBSTANTIAL AND PERSISTENT LABOR SURPLUS" (ALSO CALLED AREA OF SUBSTANTIAL AND PERSISTENT UNEMPLOYMENT) AND IS LISTED AS SUCH BY THAT DEPARTMENT IN CONJUNCTION WITH ITS PUBLICATION "AREA MARKET TRENDS; " " THAT THE TERM "PERSISTENT LABOR SURPLUS AREA CONCERN" MEANT A CONCERN "THAT AGREES TO PERFORM, OR CAUSE TO BE PERFORMED, A SUBSTANTIAL PROPORTION OF A CONTRACT IN PERSISTENT LABOR SURPLUS AREAS; , AND THAT A CONCERN "SHALL BE DEEMED TO PERFORM A SUBSTANTIAL PROPORTION OF A CONTRACT IN PERSISTENT LABOR SURPLUS AREAS IF THE COSTS THAT THE CONCERN WILL INCUR ON ACCOUNT OF MANUFACTURING OR PRODUCTION PERFORMED IN SUCH AREAS (BY ITSELF OR ITS FIRST-TIER SUBCONTRACTORS) AMOUNT TO MORE THAN 50 PERCENT OF THE CONTRACT PRICE.' THE CLAUSE ALSO PROVIDED AS FOLLOWS:

(C) IDENTIFICATION OF AREAS OF PERFORMANCE. EACH BIDDER DESIRING TO BE CONSIDERED FOR AWARD AS A LABOR SURPLUS AREA CONCERN ON THE SET ASIDE PORTION OF THIS PROCUREMENT SHALL IDENTIFY IN HIS BID THE GEOGRAPHICAL AREAS IN WHICH HE PROPOSES TO PERFORM, OR CAUSE TO BE PERFORMED, A SUBSTANTIAL PROPORTION OF THE PRODUCTION OF THE CONTRACT. IF THE DEPARTMENT OF LABOR CLASSIFICATION OF ANY SUCH AREA CHANGES AFTER THE BIDDER HAS SUBMITTED HIS BID, THE BIDDER MAY CHANGE THE AREAS IN WHICH HE PROPOSES TO PERFORM, PROVIDED, THAT HE SO NOTIFIES THE CONTRACTING OFFICER BEFORE AWARD OF THE SET-ASIDE PORTION. PRIORITY FOR NEGOTIATION WILL BE BASED UPON THE LABOR SURPLUS CLASSIFICATION OF THE DESIGNATED PRODUCTION AREAS AS OF THE TIME OF THE PROPOSED AWARD.

(D) AGREEMENT. THE BIDDER AGREES THAT, IF AWARDED A CONTRACT AS A PERSISTENT LABOR SURPLUS AREA CONCERN UNDER THE SET-ASIDE PORTION OF THIS PROCUREMENT, HE WILL PERFORM, OR CAUSE TO BE PERFORMED, A SUBSTANTIAL PROPORTION OF THE PRODUCTION IN AREAS CLASSIFIED AT THE TIME OF AWARD, OR AT THE TIME OF PERFORMANCE OF THE CONTRACT, AS PERSISTENT LABOR SURPLUS AREAS AND THAT IF AWARDED A CONTRACT AS A SUBSTANTIAL LABOR SURPLUS AREA CONCERN UNDER THE SET-ASIDE PORTION OF THIS PROCUREMENT, HE WILL PERFORM, OR CAUSE TO BE PERFORMED, A SUBSTANTIAL PROPORTION OF THE PRODUCTION IN AREAS CLASSIFIED AT THE TIME OF AWARD, OR AT THE TIME OF PERFORMANCE OF THE CONTRACT, AS SUBSTANTIAL OR PERSISTENT LABOR SURPLUS AREAS.

A CONTRACT FOR THE NON-SET-ASIDE PORTION OF THE IBM MAGNETIC TYPE TAPE AND RELATED EQUIPMENT DESCRIBED UNDER ITEMS 1, 1A, AND 1B WAS AWARDED TO YOU ON AUGUST 30, 1965, AS THE LOWEST RESPONSIBLE BIDDER, AND A CONTRACT FOR THE NON-SET-ASIDE PORTION OF THE RCA MAGNETIC TYPE TAPE AND RELATED EQUIPMENT DESCRIBED UNDER ITEMS 2 AND 2A WAS AWARDED ON THE SAME DATE TO THE U.S. MAGNETIC TAPE COMPANY, AS THE LOWEST RESPONSIBLE BIDDER FOR THOSE ITEMS. YOUR BID INDICATED, IN THE SPACE PROVIDED FOR SUCH INFORMATION TO BE SHOWN, THAT YOU WERE A SMALL BUSINESS CONCERN.

IT APPEARS THAT 3M, A LARGE BUSINESS CONCERN, WAS THE ONLY BIDDER OFFERING TO PERFORM A SUBSTANTIAL PORTION OF THE WORK IN A LABOR SURPLUS AREA. ITS BID STATED:

SHOULD MINNESOTA MINING AND MANUFACTURING COMPANY RECEIVE AN AWARD, MATERIAL WILL BE FABRICATED AT OUR FREEHOLD, NEW JERSEY PLANT WHICH IS LOCATED IN MONMOUTH COUNTY, NEW JERSEY. MONMOUTH COUNTY IS DESIGNATED AS AN AREA OF PERSISTENT AND SUBSTANTIAL UNEMPLOYMENT AS DEFINED BY THE U.S. DEPARTMENT OF LABOR IN THEIR PUBLICATION "AREA TRENDS IN EMPLOYMENT AND UNEMPLOYMENT," MAY, 1965. MINNESOTA MINING AND MANUFACTURING COMPANY IS CLASSIFIED AS A PERSISTENT AND SUBSTANTIAL LABOR SURPLUS CONCERN AT THE FREEHOLD LOCATION ON ITEMS 1 AND 2.

A "MEMO FOR THE FILE" PREPARED BY THE CONTRACTING OFFICER UNDER DATE OF JULY 30, 1965, WHICH WAS INCLUDED IN THE AIR FORCE FILE OF THIS MATTER WHICH WAS FURNISHED ALONG WITH ITS REPORT TO US ON THE PROTEST, STATES:

1. * * * THIS CONTRACTOR (3M) HAS BEEN CONFIRMED BY THE DEPARTMENT OF LABOR "AREA TRENDS IN EMPLOYMENT AND UNEMPLOYMENT," MAY 1965, AS LOCATED IN FREEHOLD, NEW JERSEY (PLACE OF MANUFACTURE) AND IS CLASSIFIED AS A PERSISTENT AND SUBSTANTIAL LABOR SURPLUS CONCERN.

2. THE SET-ASIDE PORTION WAS NEGOTIATED WITH THE QUALIFIED FIRM WHO AGREED TO ACCEPT THE LOW BID PRICES AWARDED ON ITEM 1 AND ITEM 2 AS FOLLOWS:

ESTIMATED QUANTITIES TOTAL

ITEM 1 4700 REELS 17.20 $80,840.00

ITEM 2 6525 REELS 12.50 $81,562.50 BOTH ITEMS, AT 2% - 30 DAYS DISCOUNT $162,402.50 ESTIMATED.

A PROPOSED CONTRACT (NO. AF 33 (601) 9213) WITH 3M FOR THE FURNISHING OF ITEMS 1 (THE IBM TYPE TAPE) AND 2 (THE RCA TYPE TAPE) OF THE SET-ASIDE PORTION OF THE PROCUREMENT AT THE ABOVE PRICES, SHOWING THE EFFECTIVE DATE AS AUGUST 2, 1965, WAS PREPARED BY THE CONTRACTING OFFICER ON DD FORM 1491. IN THE CONTRACTING OFFICER'S REPORT IN CONNECTION WITH YOUR PROTEST IT IS STATED:

ON 26 AUGUST 1965 THE CONTRACT FILE AF 33 (601) 9213 WAS HAND CARRIED FOR LEGAL REVIEW TO THE BASE LEGAL ADVISOR, EWJ, AFTER IT WAS CONFIRMED THAT THE PLACE OF MANUFACTURE, FREEHOLD, NEW JERSEY, WAS STILL LOCATED IN A LABOR SURPLUS AREA. ON 30 AUGUST 1965 THE CONTRACT FILE WAS HAND CARRIED TO THE BASE COMMANDER FOR MANUAL APPROVAL. APPROVAL WAS RECEIVED ON 1 SEPTEMBER 1965 AND THE CONTRACTOR'S COPY MAILED IMMEDIATELY ON THE SAME DAY.

IN YOUR LETTER OF SEPTEMBER 27, 1965, YOU SET FORTH A BREAKDOWN OF THE COSTS WHICH YOU WOULD INCUR IN PRODUCING THE TAPE REQUIRED TO BE FURNISHED UNDER THE CONTRACT AWARDED TO 3M FOR THE SET-ASIDE, WHICH YOU "ASSUME" WOULD BE ROUGHLY THOSE TO BE INCURRED BY THAT CONCERN. YOU POINT OUT THAT THE COST OF THE EIGHT ITEMS OF MATERIAL LISTED IN YOUR LETTER ALONE AMOUNTS TO 59.7 PERCENT OF THE TOTAL COSTS SHOWN IN YOUR LETTER AND STATE THAT NONE OF THESE, TO YOUR KNOWLEDGE, ARE MANUFACTURED IN LABOR SURPLUS AREAS.

SUBSEQUENT TO THE DATE OF YOUR LETTER OF SEPTEMBER 27, 1965, YOU ADVISED THIS OFFICE INFORMALLY THAT YOU HAD LEARNED MONMOUTH COUNTY, NEW JERSEY, WAS NO LONGER CLASSIFIED BY THE DEPARTMENT OF LABOR AS AN AREA OF SUBSTANTIAL AND PERSISTENT LABOR SURPLUS AT THE TIME THE CONTRACT WAS AWARDED TO 3M AND YOU URGED THIS AS AN ADDITIONAL GROUND FOR YOUR PROTEST.

THE DEPARTMENT OF LABOR'S PUBLICATION "AREA TRENDS IN EMPLOYMENT AND UNEMPLOYMENT" (FORMERLY ENTITLED "AREA LABOR MARKET TRENDS") FOR BOTH MAY AND JUNE OF 1965 LISTED MONMOUTH COUNTY, NEW JERSEY, AS AN AREA OF SUBSTANTIAL AND PERSISTENT UNEMPLOYMENT. HOWEVER, THE JULY 1965 ISSUE OF THE PUBLICATION SHOWS MONMOUTH COUNTY, NEW JERSEY, AS ONE OF THE AREAS WHICH WAS NO LONGER CLASSIFIED AS AN AREA OF SUBSTANTIAL OR PERSISTENT UNEMPLOYMENT. THE PRIMARY MATTER FOR CONSIDERATION THEREFORE IS WHETHER SUCH CHANGE IN CLASSIFICATION HAS ANY BEARING ON THE LEGALITY OF THE AWARD OF CONTRACT NO. AF 33/601/9213 TO 3M.

SECTION 1.801-2 (A) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), 32 CFR 1.801-2, PROVIDES THAT "LABOR SURPLUS AREA" MEANS A GEOGRAPHICAL AREA WHICH AT THE TIME OF AWARD IS ,CLASSIFIED BY THE DEPARTMENT OF LABOR AS AN "AREA OF SUBSTANTIAL AND PERSISTENT LABOR SURPLUS" OR AS AN "AREA OF SUBSTANTIAL AND PERSISTENT LABOR SURPLUS" (ALSO CALLED "AREA OF SUBSTANTIAL AND PERSISTENT UNEMPLOYMENT") (HEREIN REFERRED TO AS AN AREA OF PERSISTENT LABOR SURPLUS) AND LISTED AS SUCH BY THAT DEPARTMENT IN CONJUNCTION WITH ITS PUBLICATION "AREA LABOR MARKET TRENDS," " AND ASPR 1.803 (A) PROVIDES:

(3) EACH DEPARTMENT SHALL ASSURE THAT INFORMATION IDENTIFYING LABOR SURPLUS AREAS IS DISSEMINATED PROMPTLY TO PROCUREMENT PERSONEL;

SECTION 1-801.2 OF AIR FORCE PROCUREMENT INSTRUCTION, AS REVISED JULY 31, 1964, IMPLEMENTS THE ABOVE SECTION BY PROVIDING AS FOLLOWS:

1-801.2 "AREA LABOR MARKET TRENDS," WHICH ESTABLISHES THE BOUNDARIES OF EACH LABOR MARKET AREA AND LISTS COMMUNITIES INCLUDED IN EACH AREA, IS DISTRIBUTED BY THE DEPARTMENT OF LABOR DIRECTLY TO AF PURCHASING ACTIVITIES. HQ AFLC (MCP-5) AND HQ AFSC (SCK-4) WILL PERIODICALLY ASSURE THAT DISTRIBUTION IS ADEQUATE AND THAT THE CONTENTS OF THE PUBLICATION ARE FULLY UNDERSTOOD AND CORRECTLY USED BY COGNIZANT PERSONNEL.

THE REPORT FURNISHED THIS OFFICE BY THE DEPARTMENT OF THE AIR FORCE ADVISES THAT THE PUBLICATION IN QUESTION IS MAILED BY THE DEPARTMENT OF LABOR DIRECTLY TO THE VARIOUS PROCURING ACTIVITIES OF THE AIR FORCE, AND THAT THE 2750TH AIR BASE WING (THE ACTIVITY PLACING THE CONTRACT HERE INVOLVED) RECEIVED THE JULY 1965 ISSUE OF "AREA TRENDS IN EMPLOYMENT AND UNEMPLOYMENT" IN THE REGULAR COURSE OF THE MAIL, BUT NOT UNTIL SEPTEMBER 2, 1965, THE DAY AFTER THE CONTRACT HAD BEEN AWARDED. THE CITED AIR FORCE REGULATIONS REASONABLY ARE TO BE INTERPRETED AS CONTEMPLATING THAT THE PROCUREMENT ACTIVITIES BASE THEIR DETERMINATION OF WHETHER A BIDDER QUALIFIES AS A LABOR SURPLUS AREA CONCERN AT THE TIME OF A LABOR SURPLUS SET-ASIDE AWARD ON THE INFORMATION CONTAINED IN THE LATEST ISSUE OF THE APPLICABLE PUBLICATION WHICH HAS BEEN ISSUED BY THE DEPARTMENT OF LABOR AND EITHER HAS BEEN, OR SHOULD HAVE BEEN, RECEIVED BY THE PROCURING ACTIVITY PRIOR TO THE TIME SUCH DETERMINATION IS REQUIRED TO BE MADE. THE INSTANT CASE THE JUNE 1965 ISSUE OF "AREA TRENDS IN EMPLOYMENT AND UNEMPLOYMENT" WAS THE LATEST ISSUE THEREOF WHICH HAD BEEN, OR SHOULD HAVE BEEN, RECEIVED BY THE 2750TH AIR BASE WING AT THE TIME IT WAS REQUIRED TO DETERMINE WHETHER 3M WAS A LABOR SURPLUS AREA CONCERN FOR PURPOSES OF THE SUBJECT PROCUREMENT, AND THE INFORMATION IN THAT ISSUE INDICATED THAT FREEHOLD, MONMOUTH COUNTY, NEW JERSEY, THE LOCALITY WHERE 3M HAD INDICATED THAT A SUBSTANTIAL PROPORTION OF THE PRODUCTION UNDER THE SUBJECT CONTRACT WOULD BE PERFORMED, WAS AN AREA OF SUBSTANTIAL AND PERSISTENT UNEMPLOYMENT. THE CONTRACTING OFFICER'S DETERMINATION THAT FREEHOLD, NEW JERSEY, WAS AN AREA OF SUBSTANTIAL AND PERSISTENT UNEMPLOYMENT WAS, THEREFORE, REASONABLE AND IN ACCORDANCE WITH THE EXISTING REGULATIONS. UNDER THE CIRCUMSTANCES, THE FACT THAT FREEHOLD HAD CEASED TO BE IN THIS CATEGORY AT THE TIME OF AWARD DOES NOT, IN OUR OPINION, AFFECT THE VALIDITY OF THE CONTRACT. SEE OTIS STEEL PRODUCTS CORPORATION V. UNITED STATES (1963), 316 F.2D 937, 161 CT.CL. 694.

RELATIVE TO THE QUESTION OF WHETHER 3M WAS IN A POSITION TO PERFORM A SUBSTANTIAL PROPORTION (MORE THAN 50 PERCENT) OF THE PRODUCTION OF THE CONTRACT INVOLVED IN MONMOUTH COUNTY, NEW JERSEY, AT THE TIME OF THE AWARD AND THUS COMPLY WITH THE TERMS OF THE AGREEMENT ENTERED INTO, THE REPORT OF THE CONTRACTING OFFICER STATES:

B. THE CONTRACTOR, MINNESOTA MINING AND MANUFACTURING COMPANY, PRIOR TO AWARD, FURNISHED A STATEMENT TO THE CONTRACTING OFFICER ON 5 AUGUST 1965 THAT HIS PLANT LOCATED IN FREEHOLD, NEW JERSEY, APPEARED IN THE MOST RECENT PUBLICATION BY THE U.S. LABOR DEPARTMENT AS AN AREA OF BOTH PERSISTENT AND SUBSTANTIAL UNEMPLOYMENT. IN ADDITION, THE CONTRACTOR STATED PROCUREMENT OF OUTSIDE SUPPLIES AND SERVICES FROM ALL FIRST TIER SUBCONTRACTORS NOT LOCATED IN AREAS OF SUBSTANTIAL AND PERSISTENT OR SUBSTANTIAL LABOR SURPLUS AREAS DOES NOT EXCEED FORTY NINE PERCENT (49 PERCENT) OF THE PRICES OFFERED. IMMEDIATELY PRIOR TO AWARD, THE INFORMATION CONCERNING THE CONTRACTOR'S STATUS IN A LABOR SURPLUS AREA WAS AGAIN CONFIRMED BY THE LATEST AVAILABLE INFORMATION LISTED IN THE PUBLICATION "AREA TRENDS IN EMPLOYMENT AND UNEMPLOYMENT," AND CONFIRMED BY THE SMALL BUSINESS REPRESENTATIVE. (SEE ATTACHMENT 2 TO BASIC LETTER.) TO FURTHER ASSURE THAT THE CONTRACTOR WOULD PERFORM IN HIS FREEHOLD, NEW JERSEY PLANT, AUDIT ASSIGNMENT WAS REQUESTED ON 1 SEPTEMBER 1965 TO THE USAF AUDITOR GENERAL. (SEE ATTACHMENT 4.) THE CONTRACTING OFFICER THUS DETERMINED ON THE BASIS OF THE INFORMATION SUBMITTED BY 3M THAT THE CONCERN WAS IN A POSITION TO PERFORM A SUBSTANTIAL PROPORTION OF THE PRODUCTION UNDER THE CONTRACT IN THE AREA DESIGNATED IN ITS BID. THIS WAS A MATTER PRIMARILY WITHIN THE JURISDICTION OF THE AIR FORCE TO DECIDE AND, SINCE PROVISION WAS MADE FOR AUDIT ASSIGNMENT TO ASSURE THAT PERFORMANCE WAS ACCOMPLISHED AT FREEHOLD, WE FIND NO BASIS FOR QUESTIONING THE BONA FIDES OF THE AWARD ON THIS BASIS.

ACCORDINGLY, YOUR PROTEST MUST BE DENIED.