B-159537, SEP. 7, 1966

B-159537, SEP. 7, 1966

TO TESTLAB CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JUNE 22, 1966, PROTESTING THE AWARD OF A CONTRACT TO THE MINE AND SMELTER SUPPLY COMPANY, DENVER, COLORADO, PURSUANT TO INVITATION FOR BIDS NO. 13878, ISSUED ON MAY 26, 1966, BY THE FEDERAL SUPPLY SERVICE, GENERAL SERVICES ADMINISTRATION, DENVER FEDERAL CENTER, IN CONNECTION WITH A PROPOSED PROCUREMENT OF A MOBILE TRAILER LABORATORY WITH INSTALLATIONS OF CERTAIN UTILITY EQUIPMENT.

THE INVITATION FOR BIDS WAS ISSUED IN ACCORDANCE WITH THE SMALL BUSINESS RESTRICTED ADVERTISING PROCEDURE. IT REQUIRED THAT BIDDERS BE SMALL BUSINESS CONCERNS AND AGREE TO FURNISH END ITEMS MANUFACTURED OR PRODUCED IN THE UNITED STATES, ITS POSSESSIONS, OR PUERTO RICO, BY SMALL BUSINESS CONCERNS. AT PAGE 9 OF THE INVITATION IT IS PROVIDED THAT "BIDS OR PROPOSALS RECEIVED FROM FIRMS WHICH ARE NOT SMALL BUSINESS CONCERNS SHALL BE CONSIDERED UNRESPONSIVE.'

THREE BIDS IN THE TOTAL AMOUNTS OF $7,600, $8,170 AND $8,180 WERE RECEIVED AND OPENED, AS SCHEDULED, ON JUNE 10, 1966. THE LOWEST BID WAS SUBMITTED BY YOUR COMPANY BUT DESCRIPTIVE LITERATURE WAS NOT SUBMITTED WITH THE BID AS REQUIRED BY THE TERMS OF THE INVITATION FOR BIDS. THE NEXT LOWEST BID WAS SUBMITTED BY THE MINE AND SMELTER SUPPLY COMPANY AND THE THIRD BID WAS SUBMITTED BY SOILTEST, INCORPORATED, EVANSTON, ILLINOIS, WHICH CERTIFIED THAT IT IS A SMALL BUSINESS CONCERN AND THAT IT IS THE MANUFACTURER OF THE SUPPLIES BID UPON. THE MINE AND SMELTER SUPPLY COMPANY DESIGNATED SOILTEST, INC., AS ITS SUPPLIER. THE MINE AND SMELTER SUPPLY COMPANY REPRESENTED THAT IT IS A SMALL BUSINESS CONCERN, THAT IT IS A REGULAR DEALER IN THE SUPPLIES BID UPON AND THAT THE EQUIPMENT WOULD BE MANUFACTURED OR PRODUCED BY A SMALL BUSINESS CONCERN IN THE UNITED STATES, ITS POSSESSIONS, OR PUERTO RICO.

THE PROPOSED CONTRACT WAS AWARDED TO THE MINE AND SMELTER SUPPLY COMPANY ON JUNE 17, 1966, FOLLOWING A DETERMINATION BY THE CONTRACTING OFFICER THAT YOUR LOW BID COULD NOT BE ACCEPTED BECAUSE DESCRIPTIVE LITERATURE WAS NOT FURNISHED WITH THE BID. YOU WERE NOTIFIED WITH RESPECT TO THE BID REJECTION BY LETTER DATED JUNE 20, 1966.

IT IS YOUR CONTENTION THAT THE REMAINING BIDS SHOULD ALSO HAVE BEEN REJECTED BECAUSE SOILTEST, INCORPORATED, APPEARED TO BE A WHOLLY-OWNED SUBSIDIARY OF THE CENCO INSTRUMENTS CORPORATION, A LARGE BUSINESS CONCERN, AND THE BID OF THE MINE AND SMELTER SUPPLY COMPANY WAS BASED UPON THE FURNISHING OF EQUIPMENT TO BE MANUFACTURED BY SOILTEST, INCORPORATED. FURTHERMORE, YOU SUGGEST THAT IT MAY HAVE BEEN THE RESPONSIBILITY OF THE PROCURING AGENCY TO ADVISE YOU IMMEDIATELY CONCERNING THE UNACCEPTABILITY OF YOUR BID SO THAT, IF YOU HAD A REASON TO PROTEST THE POSSIBLE ACCEPTANCE OF ANY OTHER BID ON THE BASIS THAT SOILTEST, INCORPORATED, IS NOT A SMALL BUSINESS CONCERN, THE PROTEST COULD HAVE BEEN MADE WITHIN THE TIME LIMIT OF FIVE WORKING DAYS AFTER THE BID OPENING DATE, AS PROVIDED IN PARAGRAPH 1-1.703-2 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR).

UNDER THE PROVISIONS OF 15 U.S.C. 637/B) (6), THE SMALL BUSINESS ADMINISTRATION IS AUTHORIZED TO DETERMINE WITHIN ANY INDUSTRY THE CONCERNS, FIRMS, PERSONS, CORPORATIONS, PARTNERSHIPS, COOPERATIVES, OR OTHER BUSINESS ENTERPRISES WHICH ARE TO BE DESIGNATED "SMALL-BUSINESS CONCERNS" ENTITLED TO PREFERENCE IN GOVERNMENT PROCUREMENT, AND WHEN ANY SUCH DETERMINATION HAS BEEN MADE IT IS CONCLUSIVE ON THE PROCUREMENT AGENCY. IN RECOGNITION OF SUCH AUTHORITY AND THE REGULATIONS OF THE SMALL BUSINESS ADMINISTRATION, SUBPART 1-1.7, FPR, CONTAINS CERTAIN INFORMATION AS TO THE REQUIRED QUALIFICATIONS OF BIDDERS AND OFFERORS ON PROCUREMENTS RESERVED FOR OR INVOLVING PREFERENTIAL TREATMENT OF SMALL BUSINESS CONCERNS, AND SETS FORTH THE PROCEDURE INVOLVED IN THE MAKING OF ANY PROTEST REGARDING THE SMALL BUSINESS STATUS OF ANY BIDDER OR OFFEROR.

PARAGRAPH 1-1.701-1/D), FPR, PROVIDES IN PART THAT ANY CONCERN WHICH SUBMITS A BID OR OFFER IN ITS OWN NAME, BUT PROPOSES TO FURNISH A PRODUCT NOT MANUFACTURED BY ITSELF, IS DEEMED TO BE A SMALL BUSINESS CONCERN WHEN IT IS A SMALL BUSINESS CONCERN WITHIN THE MEANING OF PARAGRAPH 1-1.701- 1/A) AND SUCH NONMANUFACTURER SHALL FURNISH IN THE PERFORMANCE OF THE CONTRACT THE PRODUCTS OF A SMALL BUSINESS MANUFACTURER OR PRODUCER WHICH PRODUCTS ARE MANUFACTURED OR PRODUCED IN THE UNITED STATES, ITS POSSESSIONS, OR PUERTO RICO.

SECTION 1-1.703-1, FPR, PROVIDES THAT THE CONTRACTING OFFICER SHALL ACCEPT AS CONCLUSIVE FOR THE PURPOSE OF A SPECIFIC PROCUREMENT A REPRESENTATION BY THE BIDDER OR OFFEROR THAT IT IS A SMALL BUSINESS CONCERN AS DEFINED BY THE SMALL BUSINESS ADMINISTRATION, UNLESS THE SMALL BUSINESS ADMINISTRATION DETERMINES THAT THE BIDDER IN QUESTION IS NOT A SMALL BUSINESS CONCERN. UNDER SECTION 1-1.703-2, FPR, ANY CONTRACTING OFFICER WHO RECEIVES A TIMELY WRITTEN PROTEST FROM ANY BIDDER OR OFFEROR ON THE SAME PROCUREMENT, REGARDING THE SMALL BUSINESS STATUS OF ANY OTHER BIDDERS OR OFFERORS, OR WHO WISHES TO PROTEST THE SMALL BUSINESS STATUS OF ANY BIDDER OR OFFEROR HIMSELF, IS REQUIRED TO FORWARD SUCH PROTEST RECORD (OR SUBMIT HIS PROTEST) TO THE SMALL BUSINESS ADMINISTRATION REGIONAL OFFICE SERVING THE AREA IN WHICH THE PROTESTED CONCERN IS LOCATED. BIDDER'S WRITTEN PROTEST MUST BE RECEIVED BY THE CONTRACTING OFFICER PRIOR TO THE CLOSE OF BUSINESS ON THE FIFTH WORKING DAY AFTER THE BID OPENING DATE, EXCEPT THAT A PROTEST RECEIVED AFTER SUCH TIME WOULD BE CONSIDERED TIMELY IN CERTAIN CIRCUMSTANCES IF SENT BY REGISTERED OR CERTIFIED MAIL, OR BY TELEGRAM, WITHIN THE SPECIFIED TIME LIMIT. A PROTEST RECEIVED AFTER AWARD OF A CONTRACT,"EVEN THOUGH TIMELY," WOULD NOT BE CONSIDERED BUT RETURNED TO THE SENDER WITH AN EXPLANATION OF WHY IT COULD NOT BE ACTED UPON.

THE GENERAL SERVICES ADMINISTRATION HAS INDICATED THAT, AT THE TIME OF MAKING THE CONTRACT AWARD TO THE MINE AND SMELTER SUPPLY COMPANY, THE CONTRACTING OFFICER HAD NO BASIS FOR BELIEVING THAT THE REPRESENTATIONS MADE BY THAT COMPANY AND SOILTEST, INCORPORATED, CONCERNING THE SMALL BUSINESS ASPECTS OF THE CASE, WERE ERRONEOUS IN ANY RESPECT. DELIVERY UNDER THE CONTRACT OF THE SUCCESSFUL BIDDER WAS REQUIRED IN AUGUST 1966 BUT WE ARE NOT ADVISED AS TO WHETHER DELIVERY HAS BEEN ACCOMPLISHED.

WITH RESPECT TO THE FACT THAT YOUR COMPANY WAS NOT ADVISED OF THE REJECTION OF ITS BID UNTIL JUNE 20, 1966, THE SMALL BUSINESS RESTRICTED ADVERTISING PROCEDURE IS DEFINED IN SECTION 1-1.701-9, FPR, AS A SPECIAL METHOD OF NEGOTIATED PROCUREMENT CONDUCTED IN THE SAME MANNER AS FOR FORMAL ADVERTISING, EXCEPT THAT COMPETITION AND AWARDS ARE RESTRICTED TO SMALL BUSINESS CONCERNS. GENERALLY, UNDER SECTION 1 2.408, FPR, NOTICES TO UNSUCCESSFUL LOWER BIDDERS ON FORMALLY ADVERTISED PROCUREMENTS, CONCERNING THE REASONS FOR REJECTION OF THEIR BIDS, ARE NOT REQUIRED UNTIL AFTER AWARD ACTIONS HAVE BEEN TAKEN, AND IT DOES NOT APPEAR THAT A DIFFERENT RULE WOULD BE FOR APPLICATION IN THE CASE OF AN ADVERTISEMENT UNDER WHICH ONLY SMALL BUSINESS CONCERNS ARE ELIGIBLE TO SUBMIT BIDS. ALTHOUGH YOUR COMPANY MAY HAVE BELIEVED THAT ITS BID WAS FULLY RESPONSIVE TO THE INVITATION FOR BIDS AND THAT IT WOULD RECEIVE THE CONTRACT AWARD AS THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER, IT IS NEVERTHELESS APPARENT THAT CONSIDERATION SHOULD HAVE BEEN GIVEN TO THE POSSIBILITY THAT THE BID MIGHT BE REJECTED AND THAT THE CONTRACT AWARD MIGHT BE MADE TO ONE OF THE OTHER BIDDERS.

IN ANY EVENT, SO FAR AS CONCERNS ANY PROTEST WHICH YOU MIGHT HAVE HAD IN REGARD TO THE SMALL BUSINESS STATUS OF THE OTHER TWO BIDDERS, IT APPEARS THAT THE TIME LIMITATION FOR THE FILING OF THE PROTEST COULD NOT HAVE BEEN WAIVED BY THE CONTRACTING OFFICER AFTER AWARD, AND WE HAVE BEEN ADVISED BY THE SMALL BUSINESS ADMINISTRATION THAT YOUR PROTEST TO THAT AGENCY IN THE MATTER WAS REJECTED BY ITS DENVER, COLORADO, REGIONAL OFFICE ON THE BASIS THAT THE PROTEST WAS NOT TIMELY PRESENTED.

IN THE CIRCUMSTANCES, AND SINCE IT DOES NOT APPEAR FROM THE RECORD BEFORE US THAT THE MINE AND SMELTER SUPPLY COMPANY ACTED OTHER THAN IN GOOD FAITH WHEN IT INDICATED THAT ITS PROPOSED SUPPLIER IS A SMALL BUSINESS CONCERN, WE WOULD NOT BE WARRANTED IN TAKING EXCEPTION TO THE CONTRACT AWARDED TO THAT FIRM BEFORE THE RECEIPT OF ANY COMPLAINT FROM YOUR COMPANY. ACCORDINGLY, THE PROTEST MADE TO OUR OFFICE IN THE MATTER MUST BE, AND IS, DENIED.