B-159822, OCTOBER 20, 1966, 46 COMP. GEN. 342

B-159822: Oct 20, 1966

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A WRITTEN PROTEST AGAINST THE AWARD OF A CONTRACT TO A FIRM CERTIFYING ITSELF AS SMALL BUSINESS THAT IS NOT RECEIVED BY THE CONTRACTING OFFICER WITHIN 5 WORKING DAYS AFTER BID OPENING OR CLOSING DATE FOR RECEIPT OF PROPOSALS AND PRIOR TO AWARD DOES NOT COMPLY WITH THE REQUIREMENTS OF PARAGRAPH 1-703/B) (1) OF THE ARMED SERVICES PROCUREMENT REGULATION AND THE PROTEST. THE CONTRACTING OFFICER HAVING AUTHORITY TO ACCEPT AT FACE VALUE A REPRESENTATION BY A BIDDER OR OFFEROR THAT IT IS A SMALL BUSINESS CONCERN. UNLESS A STATUS IS TIMELY QUESTIONED. THE PROTEST RECEIVED AFTER CONTRACT AWARD WILL BE REFERRED TO THE SBA REGIONAL OFFICE FOR CONSIDERATION IN FUTURE ACTIONS. WHERE BIDDERS HAVE INFORMATION RELATIVE TO ANOTHER BIDDER'S SMALL BUSINESS STATUS THAT IS NOT KNOWN TO THE CONTRACTING OFFICER.

B-159822, OCTOBER 20, 1966, 46 COMP. GEN. 342

CONTRACTS - AWARDS - SMALL BUSINESS CONCERNS - SELF-CERTIFICATIONS - STATUS PROTESTS. A WRITTEN PROTEST AGAINST THE AWARD OF A CONTRACT TO A FIRM CERTIFYING ITSELF AS SMALL BUSINESS THAT IS NOT RECEIVED BY THE CONTRACTING OFFICER WITHIN 5 WORKING DAYS AFTER BID OPENING OR CLOSING DATE FOR RECEIPT OF PROPOSALS AND PRIOR TO AWARD DOES NOT COMPLY WITH THE REQUIREMENTS OF PARAGRAPH 1-703/B) (1) OF THE ARMED SERVICES PROCUREMENT REGULATION AND THE PROTEST, THEREFORE, NEED NOT BE SUBMITTED TO THE SMALL BUSINESS ADMINISTRATION (SBA), THE CONTRACTING OFFICER HAVING AUTHORITY TO ACCEPT AT FACE VALUE A REPRESENTATION BY A BIDDER OR OFFEROR THAT IT IS A SMALL BUSINESS CONCERN, UNLESS A STATUS IS TIMELY QUESTIONED, OTHERWISE, A BIDDER COULD NEVER BE SURE AN AWARD WOULD BE SUSTAINED. HOWEVER, IN ACCORDANCE WITH PARAGRAPH 1-703/B) (1) (III), THE PROTEST RECEIVED AFTER CONTRACT AWARD WILL BE REFERRED TO THE SBA REGIONAL OFFICE FOR CONSIDERATION IN FUTURE ACTIONS. CONTRACTS - AWARDS - SMALL BUSINESS CONCERNS - SELF-CERTIFICATIONS - INFORMATION KNOWN TO OTHER BIDDERS. WHERE BIDDERS HAVE INFORMATION RELATIVE TO ANOTHER BIDDER'S SMALL BUSINESS STATUS THAT IS NOT KNOWN TO THE CONTRACTING OFFICER, AND WHICH IS SUFFICIENT TO RAISE A REASONABLE DOUBT AS TO THE ACCURACY OF A SELF CERTIFICATION APPEARING IN A BID, THE BURDEN OF QUESTIONING THE SELF CERTIFICATION FALLS UPON BIDDERS.

TO NASCO PRODUCTS CO., OCTOBER 20, 1966:

REFERENCE IS MADE TO YOUR LETTER DATED JULY 28, 1966, WHICH PROTESTED AGAINST THE AWARD OF A CONTRACT TO THE AIR MASTER CORPORATION BASED ON INVITATION FOR BIDS (IFB) 65-501-66-98 ISSUED MAY 12, 1966, BY THE ELMENDORF AIR FORCE BASE, ALASKA, FOR FIVE ITEMS OF BUILDING MATERIALS.

IT WAS SPECIFICALLY PROVIDED ON PAGE 1 (STANDARD FORM 33) OF THE INVITATION THAT "THIS IS A 100 PERCENT SET ASIDE FOR SMALL BUSINESS;, FURTHER, PAGE 2 REQUIRED BIDDERS TO REPRESENT AND CERTIFY BY CHECKING APPROPRIATE BLOCKS THAT THEY WERE OR WERE NOT SMALL BUSINESS CONCERNS, AND NUMBERED PARAGRAPH 21 ON PAGES 8 AND 9 PROVIDED THAT BIDS RECEIVED FROM FIRMS WHICH WERE NOT SMALL BUSINESS CONCERNS WOULD BE CONSIDERED NONRESPONSIVE AND WOULD BE REJECTED.

AMENDMENT NO. 1 TO THE IFB, ISSUED MAY 23, 1966, ADDED ITEM NO. 5, HARDWOOD LUMBER, AND EXTENDED THE BID OPENING DATE TO JUNE 6, 1966, AT WHICH TIME THE EIGHT BIDS SUBMITTED WERE PUBLICLY OPENED. ALL BIDDERS HAD CHECKED THE APPROPRIATE BLOCKS OF STANDARD FORM 33, AND THUS HAD CERTIFIED THEY WERE SMALL BUSINESS CONCERNS.

THE FIRST ITEM CONSISTED OF 1,386 UNITS OF STORM SASHES DIVIDED INTO ITEMS 1A, 1B, AND 1C ACCORDING TO THE SIZES CALLED FOR. YOUR FIRM AND THREE OTHER BIDDERS SUBMITTED BIDS FOR THAT ITEM WITH THE LOWEST BEING THAT OF AIR MASTER AT A UNIT PRICE OF $9.93, OR $13,762.98 FOR THE TOTAL QUANTITY. YOUR BID WAS THE NEXT LOWEST AT A UNIT PRICE OF $11.50, OR $15,939 FOR ALL UNITS. THE RECORD SHOWS THAT ITEM 1 WAS THE ONLY ITEM YOU BID ON IN THE IFB.

BASED ON ITS BID, CONTRACT AF 63/301) 4023 FOR ITEMS 1A, 1B, AND 1C WAS AWARDED TO AIR MASTER ON JUNE 17, 1966. FURTHER, WE ARE ADVISED ALL OF THE ITEMS WERE SHIPPED ON JULY 27, 1966 AND ARRIVED AT ELMENDORF AIR FORCE BASE ON AUGUST 16, 1966. THE REMAINING FOUR ITEMS OF THE IFB WERE AWARDED IN TWO DIFFERENT CONTRACTS NONE OF WHICH IS RELEVANT TO THE ISSUES PRESENTED HEREIN.

YOU ALLEGE THE AWARD SHOULD NOT HAVE BEEN MADE TO AIR MASTER SINCE IT WAS NOT A SMALL BUSINESS CONCERN. YOU HAVE QUESTIONED THE STATUS OF AIR MASTER BECAUSE THE INFORMATION AVAILABLE TO YOU SHOWED IT HAD A SALES VALUE OF $13 MILLION AND EMPLOYED OVER 700 PERSONS, WHILE YOU BELIEVE THE SBA RULINGS LIMIT SALES TO $7 1/2 MILLION AND EMPLOYMENT TO 250 PERSONS FOR SUCH SMALL BUSINESS CONCERNS. YOU ADVISE THAT SUCH CONCLUSION WAS REACHED AFTER CONVERSATIONS WITH OTHER MANUFACTURERS, AFTER READING CERTAIN BUSINESS PUBLICATIONS, AND AFTER OBTAINING INFORMATION FROM THE SMALL BUSINESS ADMINISTRATION (SBA) REGIONAL OFFICE IN DETROIT.

THE CONTRACTING OFFICER ADVISES THAT HE FIRST LEARNED OF YOUR PROTEST ON AUGUST 4, 1966, FROM THE SBA REPRESENTATIVE AT ANCHORAGE, ALASKA, AND THAT PRIOR TO SUCH DATE HE KNEW OF NO REASON TO QUESTION THE SELF-CERTIFICATION MADE BY AIR MASTER AS TO ITS SMALL BUSINESS STATUS. THE RECORD SHOWS AIR MASTER CORPORATION SUBMITTED A BIDDER'S MAILING LIST APPLICATION, STANDARD FORM 129, WHICH STATED THAT AS OF MAY 26, 1966, IT EMPLOYED 360 PERSONS, HAD A NET WORTH OF $2 MILLION AND WAS NOT AFFILIATED WITH ANY OTHER CONCERN. YOU HAVE STATED IT WAS YOUR BELIEF THAT SBA RULINGS LIMIT THE MAXIMUM EMPLOYMENT TO 250 PERSONS AND THE SALES VOLUME TO $7 1/2 MILLION FOR A COMPANY TO BE CONSIDERED A SMALL BUSINESS CONCERN.

WHILE WE ARE NOT IN A POSITION TO DETERMINE WHETHER AIR MASTER IS IN FACT A SMALL BUSINESS CONCERN, SINCE SUCH A DETERMINATION IS REQUIRED BY STATUTE TO BE MADE BY THE SBA, YOUR ATTENTION IS DIRECTED TO TITLE 23, SECTION 121.3-8, OF THE CODE OF FEDERAL REGULATIONS (13 C. F. R. 121.3-8) ENTITLED,"DEFINITION OF SMALL BUSINESS FOR GOVERNMENT PROCUREMENT;, IT IS PROVIDED THEREIN IN RELEVANT PART, AS FOLLOWS:

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 SET FORTH IN THIS SECTION. WHEN COMPUTING THE SIZE STATUS OF A BIDDER OR OFFEROR, THE NUMBER OF EMPLOYEES, ANNUAL SALES OR RECEIPTS OR OTHER APPLICABLE STANDARDS OF THE BIDDER OR OFFEROR AND ALL OF ITS AFFILIATES SHALL BE INCLUDED. IN THE SUBMISSION OF A BID OR PROPOSAL ON A GOVERNMENT PROCUREMENT, A CONCERN WHICH MEETS THE CRITERIA PROVIDED IN THIS SECTION MAY REPRESENT THAT IT IS A SMALL BUSINESS.

IN THE ABSENCE OF A WRITTEN PROTEST OR OTHER INFORMATION WHICH WOULD CAUSE HIM TO QUESTION THE VERACITY OF THE SELF-CERTIFICATION, THE CONTRACTING OFFICER SHALL ACCEPT THE SELF-CERTIFICATION AT FACE VALUE FOR THE PARTICULAR PROCUREMENT INVOLVED * * *.

(B) MANUFACTURING. ANY CONCERN BIDDING ON A CONTRACT FOR A PRODUCT IT MANUFACTURED IS CLASSIFIED:

(3) AS SMALL IF IT IS BIDDING ON A CONTRACT FOR A PRODUCT CLASSIFIED WITHIN AN INDUSTRY SET FORTH IN SCHEDULE B OF THIS PART AND ITS NUMBER OF EMPLOYEES DOES NOT EXCEED THE SIZE STANDARD ESTABLISHED FOR THAT INDUSTRY.

(4) AS SMALL AS IT IS BIDDING ON A CONTRACT FOR A PRODUCT CLASSIFIED WITHIN AN INDUSTRY NOT SET FORTH IN SCHEDULE B OF THIS PART AND ITS NUMBER OF EMPLOYEES DOES NOT EXCEED 500 PERSONS.

SCHEDULE B OF THE CITED REGULATION DOES NOT INDICATE ANY PRODUCT CLASSIFICATION FOR WHICH THE NUMBER OF EMPLOYEES IS LESS THAN 750. HENCE, IN VIEW OF (3) AND (4) QUOTED ABOVE, IT APPEARS A MANUFACTURING FIRM SUCH AS AIR MASTER SEEMS TO BE, WOULD HAVE TO HAVE 500 EMPLOYEES OR MORE BEFORE ITS STATUS AS A SMALL BUSINESS CONCERN FOR THIS PARTICULAR PROCUREMENT WOULD HAVE BEEN SUBJECT TO QUESTION ON THAT BASIS. INFORMAL ADVICE FROM THE SBA OFFICE IN WASHINGTON INDICATES THAT THE INFORMATION AVAILABLE TO THE CONTRACTING OFFICER PRIOR TO AWARD (THAT AIR MASTER HAD 360 EMPLOYEES, NO AFFILIATES AND A NET WORTH OF $2 MILLION) DID NOT CONSTITUTE SUFFICIENT NOTICE TO THE CONTRACTING OFFICER THAT AIR MASTER WAS OTHER THAN A SMALL BUSINESS CONCERN, AS IT HAD SELF-CERTIFIED.

PARAGRAPH 1-703, ARMED SERVICES PROCUREMENT REGULATION (ASPR), SETS FORTH THE PERTINENT REGULATORY AUTHORITY REGARDING DETERMINATIONS OF THE SMALL BUSINESS STATUS OF BIDDERS AND THE PROCEDURES TO BE FOLLOWED IN QUESTIONING SUCH STATUS. THEREIN IT WAS PROVIDED AT THE TIME OF AWARD (JUNE 17, 1966) THAT THE CONTRACTING OFFICER "SHALL ACCEPT AT FACE VALUE * * * A REPRESENTATION BY A BIDDER OR OFFEROR THAT IT IS A SMALL BUSINESS CONCERN" UNLESS THE BIDDER'S STATUS WAS QUESTIONED AND THE SBA DETERMINED THE BIDDER WAS NOT A SMALL BUSINESS CONCERN. FURTHER, ASPR 1-703/B) (1) PROVIDED THAT, IN ORDER TO QUESTION THE SMALL BUSINESS STATUS OF AN APPARENTLY LOW BIDDER ANY BIDDER COULD DO SO BY SENDING A WRITTEN PROTEST TO THE CONTRACTING OFFICER PRIOR TO AWARD OF THE CONTRACT, BUT THAT "SUCH PROTEST MUST BE RECEIVED BY THE CONTRACTING OFFICER PRIOR TO THE CLOSE OF BUSINESS ON THE 5TH WORKING DAY AFTER BID OPENING OR CLOSING DATE FOR THE RECEIPT OF PROPOSALS * * * A PROTEST RECEIVED AFTER AWARD OF A CONTRACT, EVEN THOUGH TIMELY WILL NOT BE CONSIDERED A -PROTEST- AND WILL BE RETURNED TO THE SENDER WITH AN EXPLANTATION OF WHY IT COULD NOT BE ACTED UPON;,

WHILE THE RECORD IS SILENT AS TO WHETHER YOU SUBMITTED A WRITTEN PROTEST DIRECTLY TO THE CONTRACTING OFFICER, IT IS APPARENT THAT WHATEVER THE FORM OF YOUR PROTEST IT WAS NOT RECEIVED BY THE CONTRACTING OFFICER WITHIN 5 WORKING DAYS AFTER JUNE 6, 1966, THE DATE OF BID OPENING. IN FACT, IT WAS NOT RECEIVED FOR MORE THAN A MONTH AFTER THAT DATE, WHICH WAS ALSO CONSIDERABLY AFTER THE DATE ON WHICH AWARD WAS MADE (JUNE 17, 1966). THEREFORE FOLLOWS THAT YOUR PROTEST CANNOT BE CONSIDERED AS SUCH WITHIN THE ASPR 1-703/B) (1) DEFINITION SINCE IT WAS RECEIVED AFTER AWARD HAD BEEN MADE. ACCORDINGLY, THERE WAS NO REQUIREMENT THAT IT BE SENT TO SBA FOR CONSIDERATION OF THE QUESTION RAISED.

IN OUR DECISION B-153132, FEBRUARY 4, 1964, WE APPLIED THE ASPR 1 703/B) (1) REQUIREMENTS TO A CASE SIMILAR TO THIS CASE WHERE THE SIZE STATUS OF A 100 PERCENT SET-ASIDE FOR SMALL BUSINESS WAS NOT QUESTIONED UNTIL AFTER AWARD. THEREIN IN DENYING THE PROTEST WE STATED,"IN SUCH CIRCUMSTANCES, ASPR 1-703/B) (1) PROVIDES THAT A PROTEST AS TO THE SIZE OF ANOTHER BIDDER SHALL NOT BE CONSIDERED. IN OUR VIEW SUCH A RULE IS EMINENTLY REASONABLE AND NECESSARY AS A PRACTICAL MATTER TO THE PROPER ADMINISTRATION OF GOVERNMENT CONTRACTS SINCE A BIDDER IN SUCH CIRCUMSTANCES OTHERWISE COULD NEVER BE SURE AN AWARD TO HIM WOULD BE SUSTAINED;, (SEE ALSO B-157721, DECEMBER 28, 1965, WITH RESPECT TO THE QUESTION OF SUBMITTING PROTESTS WITHIN 5 DAYS AFTER BID OPENING.)

NO CONCLUSIVE INFORMATION APPEARS IN THE RECORD TO EITHER REFUTE OR CONFIRM YOU ALLEGATIONS THAT AIR MASTER CORPORATION WAS OR WAS NOT AT THE TIME OF AWARD A SMALL BUSINESS CONCERN, NOR AS PREVIOUSLY STATE WILL THIS OFFICE MAKE SUCH A DETERMINATION. THE AUTHORITY TO DETERMINE IN PROCUREMENT MATTERS WHETHER A BIDDER WHO REPRESENTS HIMSELF AS A SMALL BUSINESS CONCERN IS, IN FACT, A SMALL BUSINESS CONCERN IS VESTED BY LAW IN THE SMALL BUSINESS ADMINISTRATION. 15 U.S.C. 637/B) (6). NEITHER THE CONTRACTING AGENCY NOR THE REMAINING BIDDERS ARE AUTHORIZED OR QUALIFIED TO MAKE SUCH A DETERMINATION, AND THE PROCEDURES AND REQUIREMENTS ESTABLISHED BY REGULATION FOR REFERRAL OF SMALL BUSINESS QUESTIONS TO THE SMALL BUSINESS ADMINISTRATION ARE PREDICATED UPON SUCH A CONCLUSION. THESE PROCEDURES ARE EQUALLY AVAILABLE TO BOTH THE CONTRACTING AGENCY AND BIDDERS, AND WHERE BIDDERS HAVE INFORMATION RELATIVE TO ANOTHER BIDDER'S STATUS WHICH IS NOT KNOWN TO THE CONTRACTING AGENCY AND WHICH IS SUFFICIENT TO RAISE A REASONABLE DOUBT AS TO THE ACCURACY OF THE SELF- CERTIFICATION APPEARING IN THE BID, IT MUST BE CONCLUDED THAT THE BURDEN OF QUESTIONING THE SELF-CERTIFICATION FALLS UPON THE BIDDERS. B-137474, NOVEMBER 20, 1958.

AS A POINT OF INFORMATION, THE LATEST REVISION TO ASPR 1-703/B) (1), REVISION 18 ISSUED AUGUST 1, 1966, REQUIRES IN SUBPARAGRAPH (III) THAT PROTESTS RECEIVED AFTER AWARD BE FORWARDED TO THE SMALL BUSINESS ADMINISTRATION REGIONAL OFFICE FOR CONSIDERATION IN FUTURE ACTIONS. ARE ADVISED THAT THE AIR FORCE HAS COMPLIED WITH THAT PROVISION WITH RESPECT TO YOUR PROTEST.

BASED UPON THE FOREGOING WE SEE NO VALID BASIS ON WHICH TO QUESTION THE VALIDITY OF THE CONTRACT AWARDED, AND YOUR PROTEST MUST THEREFORE BE DENIED.