B-159917, NOV. 30, 1966

B-159917: Nov 30, 1966

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INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 19. BIDS WERE REQUESTED FOR THE TRANSPORTATION OF DEPENDENT SCHOOL CHILDREN TO AND FROM VARIOUS SCHOOLS IN FORT BRAGG AND FAYETTEVILLE. THIS PROCUREMENT WAS A 100 PERCENT SET-ASIDE FOR SMALL BUSINESS CONCERNS. BIDS WERE OPENED AUGUST 2. YOUR BID WAS LOW IN THE AMOUNT OF $100. THE ONLY OTHER BID WAS SUBMITTED BY FORT BRAGG COACH COMPANY IN THE AMOUNT OF $122. THE DEPARTMENT OF THE ARMY REPORTS THAT ON THE DAY THE BIDS WERE OPENED YOUR MR. YEARWOOD WAS ADVISED BY TELEPHONE (CONFIRMED BY LETTER OF THE SAME DATE) THAT YOU WERE THE APPARENT LOW BIDDER AND WAS REQUESTED TO FURNISH A NOTARIZED COPY OF YOUR LATEST FINANCIAL STATEMENT. THE CONFIRMING LETTER ADVISED THAT THE REQUESTED INFORMATION WAS NEEDED BY THE CONTRACTING OFFICER IN ORDER TO MAKE A REQUIRED PRE-AWARD SURVEY TO DETERMINE YOUR RESPONSIBILITY.

B-159917, NOV. 30, 1966

TO TRANS-STUDENT LINES, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 19, 1966, PROTESTING AWARD TO ANY OTHER BIDDER UNDER INVITATION FOR BIDS NO. DABC 2167-B-0002, ISSUED BY THE DEPARTMENT OF THE ARMY, FORT BRAGG, NORTH CAROLINA.

BIDS WERE REQUESTED FOR THE TRANSPORTATION OF DEPENDENT SCHOOL CHILDREN TO AND FROM VARIOUS SCHOOLS IN FORT BRAGG AND FAYETTEVILLE, NORTH CAROLINA, DURING THE SCHOOL YEAR 1966-1967. THIS PROCUREMENT WAS A 100 PERCENT SET-ASIDE FOR SMALL BUSINESS CONCERNS. BIDS WERE OPENED AUGUST 2, 1966, AND YOUR BID WAS LOW IN THE AMOUNT OF $100,440. THE ONLY OTHER BID WAS SUBMITTED BY FORT BRAGG COACH COMPANY IN THE AMOUNT OF $122,850.

THE DEPARTMENT OF THE ARMY REPORTS THAT ON THE DAY THE BIDS WERE OPENED YOUR MR. YEARWOOD WAS ADVISED BY TELEPHONE (CONFIRMED BY LETTER OF THE SAME DATE) THAT YOU WERE THE APPARENT LOW BIDDER AND WAS REQUESTED TO FURNISH A NOTARIZED COPY OF YOUR LATEST FINANCIAL STATEMENT; A LIST OF CONTRACTS OF SIMILAR NATURE AND SCOPE; A VERIFICATION OF YOUR BID; AND A LIST OF EQUIPMENT BY MAKE, MODEL AND PASSENGER RATING, TO BE USED AT FORT BRAGG IF AWARDED THE CONTRACT, AND TO ARRANGE A TIME WHEN THE EQUIPMENT COULD BE INSPECTED BY THE MOTOR TRANSPORT OFFICER. THE CONFIRMING LETTER ADVISED THAT THE REQUESTED INFORMATION WAS NEEDED BY THE CONTRACTING OFFICER IN ORDER TO MAKE A REQUIRED PRE-AWARD SURVEY TO DETERMINE YOUR RESPONSIBILITY. MR. YEARWOOD ADVISED THAT HE WOULD FURNISH THE NECESSARY INFORMATION IMMEDIATELY, BUT THAT IT WOULD BE APPROXIMATELY TWO WEEKS BEFORE THE EQUIPMENT WOULD BE AVAILABLE FOR INSPECTION.

THE RECORD DISCLOSES THAT THE FINANCIAL STATEMENT WAS NOT NOTARIZED, AND THAT THE LIABILITIES DID NOT INCLUDE CERTAIN OPERATING EXPENSES WHICH NORMALLY WOULD BE INCURRED. FURTHER, THE REQUESTED LIST OF EQUIPMENT TO BE USED BY MAKE, MODEL AND PASSENGER RATING WAS NEVER FURNISHED. ARRANGEMENTS WERE MADE TO BEGIN INSPECTION ON AUGUST 10, 1966, AND MR. YEARWOOD ADVISED THAT ALL EQUIPMENT COULD BE SEEN BY VISITING WARNER- ROBINS, GEORGIA, WHERE 20 BUSES WERE LOCATED, AND TUSKEGEE, ALABAMA, WHERE THE REMAINDER OF THE EQUIPMENT WAS LOCATED. MR. GEORGE W. SMITH, MOTOR TRANSPORT OFFICER, AND MR. JAMES F. POWERS, AUTOMOTIVE EQUIPMENT INSPECTOR, MET WITH REPRESENTATIVES OF YOUR FIRM ON AUGUST 10 AT WARNER- ROBINS AND WERE ABLE TO INSPECT ONLY 11 BUSES. AT THIS TIME THE GOVERNMENT INSPECTORS WERE ADVISED THAT THE BUSES WHICH WERE SUPPOSED TO BE AT TUSKEGEE WERE ACTUALLY IN SEVEN SURROUNDING COUNTIES AND THAT IT HAD NOT BEEN DEFINITELY DECIDED WHICH BUSES WOULD BE ASSIGNED TO THIS CONTRACT, IF AWARDED. THE 11 AVAILABLE BUSES WERE THEREFORE INSPECTED AND THE OFFICIAL INSPECTION REPORT DISCLOSES THAT THESE BUSES WERE NOT ACCEPTABLE FOR THE FOLLOWING REASONS:

"A. BUSSES WERE NOT MODERN.

B. TEN OF THE BUSSES HAD NO HEATERS OR DEFROSTERS.

C. MANY OF THE SAFETY DOORS WOULD NOT OPEN BECAUSE OF RUST.

D. SEATS IN EIGHT OF THE BUSSES NEED REPLACING.

E. BUSSES DID NOT HAVE FIRE EXTINGUISHERS NOR FIRST-AID KITS.

F. TIRES ON SIX OF THE BUSSES NEEDED REPLACING.

G. THE GENERAL APPEARANCE OF THE BUSSES WAS POOR, PRACTICALLY ALL NEED PAINTING AND BODY RK.'

THE REPORT ALSO INDICATES THAT THE GOVERNMENT ESTIMATE OF THE MINIMUM NUMBER OF BUSES REQUIRED TO TRANSPORT THE STUDENTS WAS 32 AND THAT YOU PROPOSED TO MEET THE TRANSPORTATION REQUIREMENTS OF THE CONTRACT, IF AWARDED, BY USING, IN ADDITION TO THE ABOVE 11 BUSES, 3, 1955 AND 1956 MODELS TO BE PURCHASED FROM THE STATE OF FLORIDA, 4 BUSES SUPPOSEDLY IN TRANSIT FROM FLORIDA, WHICH YOUR MR. GLENN A. SMITH STATED WOULD REQUIRE EXTENSIVE BODY WORK AND PAINTING, AND 10, 1952 TO 1960 MODELS TO BE TRANSFERRED FROM TUSKEGEE INSTITUTE, A TOTAL OF 28 BUSES. WITH THE EXCEPTION OF THE FOUR IN TRANSIT FROM FLORIDA, ALL BUSES WERE REPORTED TO BE IN THE SAME GENERAL MECHANICAL CONDITION AS THE VEHICLES INSPECTED AT WARNER-ROBINS. BECAUSE OF THE NONACCEPTABILITY OF THE BUSES INSPECTED; THE NONAVAILABILITY FOR INSPECTION OF THE REMAINDER OF THE EQUIPMENT; AND THE NEED FOR PROMPT AWARD IN ORDER TO SET UP SCHEDULES, YOU WERE NOTIFIED BY LETTER OF AUGUST 18, 1966, FROM THE CONTRACTING OFFICER THAT YOU COULD NOT BE CONSIDERED A RESPONSIBLE PROSPECTIVE CONTRACTOR AND THAT AWARD HAD BEEN MADE TO THE NEXT RESPONSIVE AND RESPONSIBLE BIDDER.

YOU HAVE PROTESTED THE REJECTION OF YOUR BID FOR THE ALLEGED REASONS THAT THE REJECTION WAS PROMPTED BY THE FACT THAT YOU ARE NOT A LOCAL COMPANY, THAT IT WAS BASED ON THE AGE OF YOUR BUSES, AS TO WHICH THE IFB IS SILENT, AND THAT THE CONTRACTING OFFICER DELIBERATELY DELAYED INITIATING THE PREAWARD SURVEY, WHICH PRACTICALLY HAD THE EFFECT OF MAKING THE PREVIOUS CONTRACTOR A SOLE SOURCE. YOU ALSO REFER TO THE FACT THAT YOU ARE PERFORMING SATISFACTORILY UNDER CONTRACTS WITH OTHER GOVERNMENT INSTALLATIONS. WITH PARTICULAR REFERENCE TO THE DEFECTS LISTED IN THE GOVERNMENT INSPECTION REPORT, YOUR PROTEST LETTER OF AUGUST 23, 1966, TO THE PURCHASING AND CONTRACTING DIVISION, FORT BRAGG, SIGNED BY MR. YEARWOOD, STATES, IN PERTINENT PART, AS FOLLOWS:

"1. BUSES NOT MODERN--- DR. CARROL THE HEAD OF THE STATE DEPARTMENT OF EDUCATION OF NORTH CAROLINA ADVISED ME THAT NORTH CAROLINA DOES NOT HAVE ANY AGE LIMIT ON SCHOOL BUSES OPERATING IN NORTH CAROLINA AND THAT HE KNEW PERSONALLY OF 1952 MODELS OPERATING IN NORTH CAROLINA NOW. NONE OF THE BUSES THAT WE PROPOSED TO USE WERE ANYWHERE NEAR THAT OLD, IN FACT WE WERE GOING TO USE NINE 1966 MODELS.

"2. NO HEATERS OR DEFROSTERS--- ALTHOUGH THEY WERE BEING INSTALLED WHILE YOUR PEOPLE WERE HERE AND THEY SAW THEM BEING INSTALLED AND THE MAN INSTALLING THEM CAN PUT IN TWO A DAY, FURTHERMORE, HEAT IS NOT NEEDED IN BUSES IN AUGUST.

"3. MANY SAFETY DOORS WOULD NOT OPEN--- ON THE REPORT TURNED IN AND LEFT WITH US, ONE MARKED GMC 2K-220 THE SECTION MARKED CAB AND DOORS. THE WORD DOORS IS UNDERLINED AND FRONT BOLT TO BE REPLACED. INSPECTION SHEET DODGE LK-402 SECTION CAB AND DOORS FRONT REPLACE GLASSES AS NEEDED ONE EACH DOOR. THE SECTION MARKED INTERIOR TRIM REAR DOOR IS WRITTEN UP TO REPAIR. THESE ARE THE ONLY TWO OF THE FORMS THAT EVEN MENTIONED DOORS AND ONLY ONE REFERRED TO THE SAFETY DOORS.

"4. SEATS NEED REPLACING--- THESE SEATS WERE IN THE PROCESS OF BEING REPAIRED. WE HAVE TWO UPHOLSTERY SHOPS HERE BOTH CAPABLE OF TURNING OUT TWENTY SEATS EACH PER DAY. YOUR PEOPLE COULD VERY WELL TELL THAT THIS JOB WAS UNDER WAY, AS SOME BUSES HAD NEW SEATS, SOME HAD NO SEATS AT ALL AS THEY WERE AT THE UPHOLSTERY SHOP DURING THE THREE DAYS YOUR PEOPLE WERE HERE. THEY SAW NEW SEATS DELIVERED AND INSTALLED AND OLD SEATS TAKEN OUT TO THE UPHOLSTERY SHOP.

"5. FIRE EXTINGUISHERS AND FIRST AID KITS--- THESE ARE REMOVABLE ITEMS AND IN ORDER TO SAFE GUARD THEM, IS OUR POLICY TO STORE THEM AWAY UNTIL NEEDED.

"6. TIRES--- ANY TIRE THAT DID NOT SHOW SUFFICIENT TREAD DEPTH ARE UNSAFE IN ANY MANNER WERE BEING REPLACED AS SOON AS THE BUSES ARRIVED ON OUR LOT AND THE TIRE PEOPLE COULD COME DOWN AND CHANGE SAME. YOUR PEOPLE KNEW THIS WAS BEING DONE FOR SEVERAL BUSES THEY INSPECTED WERE MINUS THE WHEELS AND TIRES THE BUSES BEING MOUNTED ON WHEEL STANDS. THE GOVERNMENT INSPECTION FORMS REFERRED TO ARE DA461-5.'

PARAGRAPHS 11 AND 18 OF THE SPECIAL PROVISIONS OF THE IFB READ AS FOLLOWS:

"11. PERFORMANCE QUALIFICATION: UPON AFFIXING HIS SIGNATURE AND SEAL HEREON THE CONTRACTOR AFFIRMS SUFFICIENT EQUIPMENT, AND PERSONNEL FOR OPERATION THEREOF, ARE IN HIS POSSESSION TO PERFORM DURING THE ENTIRE PERIOD COVERED BY THIS CONTRACT.'

"18. CONTRACTOR'S EQUIPMENT: THE CONTRACTOR WILL BE REQUIRED TO FURNISH ALL EQUIPMENT (INCLUDING BUSSES) AND SUPPLIES REQUIRED TO FURNISH THE TRANSPORTATION SERVICES. THE CONTRACTOR'S EQUIPMENT SHALL BE MODERN AND OF THE SAME HIGH STANDARD OF EQUIPMENT USUAL AND PROPER FOR SCHOOL BUS USAGE, TO INCLUDE HEATERS AND OTHER HEALTH, SAFETY AND COMFORT DEVICES. ALL EQUIPMENT SHALL MEET THE SAFETY REQUIREMENTS OF NORTH CAROLINA STATE REGULATIONS CONCERNING SCHOOL BUSSES AND INTERSTATE COMMERCE COMMISSION--- MOTOR CARRIER--- SAFETY REGULATIONS.'

WE HAVE BEEN ASSURED BY THE DEPARTMENT OF THE ARMY THAT THE FACT YOU ARE NOT A LOCAL COMPANY HAD NO EFFECT WHATEVER ON ITS DETERMINATION. NOR DOES IT APPEAR THAT THERE WAS THE SLIGHTEST DELAY IN INITIATING THE PREAWARD SURVEY. YOU WERE ADVISED ON THE DAY THE BIDS WERE OPENED OF THE NECESSARY STEPS TO BE TAKEN BY YOU AND AN ATTEMPT WAS MADE TO ARRANGE FOR INSPECTION OF YOUR EQUIPMENT AT THE EARLIEST POSSIBLE DATE. IN FACT, YOU SUGGESTED SEVERAL DAYS DELAY BEYOND AUGUST 10 IN ORDER TO HAVE ALL EQUIPMENT AT THE SAME LOCATION FOR INSPECTION, BUT BECAUSE OF THE NEED FOR SPEED IN MAKING THE AWARD THE GOVERNMENT INSPECTOR HELD TO AUGUST 10 AND WAS WILLING TO VISIT MORE THAN ONE LOCATION IN ORDER TO ACCOMPLISH AN EARLIER INSPECTION. HOWEVER, AS INDICATED ABOVE, THE BUSES THAT WERE SUPPOSED TO BE AVAILABLE FOR INSPECTION AT TUSKEGEE WERE NOT THERE. AS TO THE MODERNITY OF THE BUSES, THE REQUIREMENT WAS NOT THAT THE BUSES BE OF A CERTAIN YEAR MODEL, OR LATER, BUT THAT EACH BUS, REGARDLESS OF AGE, BE "OF THE SAME HIGH STANDARD OF EQUIPMENT USUAL AND PROPER FOR SCHOOL BUS USAGE.' YOUR STATEMENT THAT YOU WERE GOING TO USE NINE 1966 MODELS IS NOT DEFINITELY SUPPORTED BY THE RECORD, WHICH SHOWS THAT DURING THE CLOSING CONFERENCE WITH THE GOVERNMENT MOTOR TRANSPORT OFFICER, ONE OF YOUR REPRESENTATIVES STATED THAT NINE NEW BUSES ,POSSIBLY" WOULD BE PURCHASED AND USED ON THIS CONTRACT, IF AWARDED. HEATERS WERE SPECIFICALLY REQUIRED AND ARE NORMALLY A PERMANENT FIXTURE OF MOTOR VEHICLES, EXCEPT IN TROPICAL CLIMES, AND WORKING UNITS SHOULD HAVE BEEN IN ALL OR MOST OF THE BUSES AT THE TIME OF INSPECTION. ONLY ONE INDIVIDUAL INSPECTION REPORT REFERRED TO RUSTED DOORS, BUT FAILURE TO RECORD THE RUSTED "SAFETY DOORS" ON THESE REPORTS MAY WELL HAVE BEEN DUE TO THE FACT THAT THERE WAS NO SUCH SEPARATE CATEGORY LISTED AMONG THE 75 ODD ITEMS TO BE CHECKED, THE ONLY PERTINENT ITEM BEING SHOWN AS "CAB AND DOORS.' UNDER THIS HEADING FIVE BUSES WERE SHOWN TO REQUIRE REPLACEMENT OF A TOTAL OF TEN DOOR GLASSES. WHILE FIRE EXTINGUISHERS AND FIRST-AID KITS ARE REMOVABLE ITEMS THERE IS NO SHOWING THAT A FULL COMPLEMENT OF SAME, WITH ALL EXTINGUISHERS IN WORKING ORDER, WAS AVAILABLE FOR INSPECTION IN STORAGE OR ELSEWHERE. THE FACT THAT EIGHT BUSES REQUIRED REPLACEMENT OF SEATS AND SIX WERE IN NEED OF NEW TIRES, PLUS THE OTHER DEFICIENCIES, WOULD RAISE VERY SERIOUS DOUBT AS TO YOUR ABILITY TO START TRANSPORTING STUDENTS ON AUGUST 26 WITH AN ADEQUATE FLEET OF BUSES MEETING THE REQUIREMENTS OF THE IFB. THIS IS PARTICULARLY OBVIOUS WHEN IT IS RECALLED THAT ONLY 11 BUSES WERE INSPECTED, THE REMAINDER WAS REPORTED TO BE IN APPROXIMATELY THE SAME CONDITION, AND THE TOTAL NUMBER AVAILABLE WAS SHORT OF THE ESTIMATED REQUIRED MINIMUM.

SPECIAL PROVISION NO. 11, QUOTED ABOVE, PROVIDED THAT THE SIGNING AND SUBMISSION OF THE BID CONSTITUTED AN AFFIRMATION BY THE BIDDER THAT HE WAS IN POSSESSION OF SUFFICIENT EQUIPMENT TO PERFORM DURING THE ENTIRE PERIOD OF THE CONTRACT AND HAD THE NECESSARY OPERATING PERSONNEL. REASONABLY, THIS EQUIPMENT SHOULD NOT ONLY BE ADEQUATE IN NUMBER BUT, EXCEPT FOR MINOR DEFICIENCIES WHICH CLEARLY COULD BE PROMPTLY CORRECTED, IT SHOULD MEET ALL OF THE QUALITY REQUIREMENTS OF THE IFB. THE FACTS RECITED HEREIN APPEAR TO DEFINITELY ESTABLISH YOUR FAILURE TO MEET EITHER REQUIREMENT. SUPPORT OF THE CONCLUSION THAT EVEN YOU DID NOT CONSIDER YOUR EQUIPMENT ADEQUATE, THERE IS A STATEMENT IN THE FILE THAT ON OR ABOUT AUGUST 3, 1966, MR. YEARWOOD CONTACTED CAPE FEAR VALLEY COACHES, INC., AND STATED THAT HE WAS INTERESTED IN BUYING THEIR FLEET OR WORKING OUT A DEAL FOR USE ON THIS CONTRACT.

BOTH 10 U.S.C. 2305 (C) AND SECTION 1-902 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) PROVIDE THAT CONTRACTS SHALL BE AWARDED ONLY TO RESPONSIBLE PROSPECTIVE CONTRACTORS. ADDITIONALLY, IT IS REQUIRED THAT A PROSPECTIVE CONTRACTOR DEMONSTRATE AFFIRMATIVELY HIS RESPONSIBILITY. ANY DOUBT AS TO HIS ABILITY TO COMPLETE THE CONTRACT SATISFACTORILY WHICH CANNOT BE RESOLVED AFFIRMATIVELY REQUIRES A DETERMINATION OF NONRESPONSIBILITY. THE MAKING OF THE REQUIRED DETERMINATION IS PRIMARILY THE RESPONSIBILITY OF THE CONTRACTING AGENCY, AND IN THE ABSENCE OF BAD FAITH OR LACK OF A REASONABLE BASIS FOR THE DECISION, WE WOULD NOT BE JUSTIFIED IN QUESTIONING THE JUDGMENT OF THE CONTRACTING OFFICER. COMP. GEN. 131; 37 ID. 798; ID. 430, 435. ON THE PRESENT RECORD WE BELIEVE THAT THE CONTRACTING OFFICER'S DETERMINATION IS WELL SUPPORTED BY THE EQUIPMENT INSPECTION REPORTS AND COLLATERAL EVIDENCE, AND THERE IS NO INDICATION THAT HIS ACTION WAS ARBITRARY OR CAPRICIOUS. WE THEREFORE SEE NO VALID BASIS ON WHICH THE REJECTION OF YOUR BID MAY BE QUESTIONED, AND YOUR PROTEST IN THIS REGARD IS THEREFORE DENIED.

ON SEPTEMBER 6, 1966, WE RECEIVED A COPY OF YOUR LETTER OF SEPTEMBER 2, 1966, ADDRESSED TO THE PURCHASING AND CONTRACTING DIVISION, FORT BRAGG, NORTH CAROLINA, QUESTIONING THE STATUS OF THE FORT BRAGG COACH COMPANY (FORT BRAGG) AS A SMALL BUSINESS FIRM. IT APPEARS THAT ON SEPTEMBER 14, 1966, THE CONTRACTING OFFICER REQUESTED THE SMALL BUSINESS ADMINISTRATION (SBA) TO MAKE A SIZE DETERMINATION ON FORT BRAGG, AND THAT ON SEPTEMBER 21, 1966, THE CHARLOTTE OFFICE OF SBA ADVISED THE CONTRACTING OFFICER THAT THE TOTAL AVERAGE ANNUAL EMPLOYMENT OF FORT BRAGG COACH COMPANY AND ITS AFFILIATES TOTALED 672, WHICH EXCEEDED THE 500-EMPLOYEE LIMITATION CONTAINED IN SECTION 121.3-8 (F) (1) OF THE SBA REGULATIONS, AND THAT FORT BRAGG WAS THEREFORE DETERMINED NOT TO BE A SMALL BUSINESS. FORT BRAGG APPEALED THIS DETERMINATION AND THE SBA SIZE APPEALS BOARD DENIED THE APPEAL IN A DECISION DATED OCTOBER 25, 1966.

SECTION 121.3-8 OF THE ABOVE REGULATIONS PROVIDES, IN PERTINENT PART, THAT "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.' THE PERTINENT CRITERION IN THIS CASE IS THE 500-EMPLOYEE LIMITATION REFERRED TO ABOVE. THE SELF CERTIFICATION PROCEDURE WAS INITIATED IN THE INTERESTS OF ORDERLY AND TIMELY PROCUREMENT AND HAS BEEN EFFECTIVE IN ELIMINATING MANY BIDS BY INELIGIBLE CONCERNS WHO, BUT FOR THE CERTIFICATION REQUIREMENT, WOULD HAVE SUBMITTED BIDS IN THE HOPE THAT THEY WOULD BE DETERMINED TO BE SMALL BUSINESS, THE MAKING OF WHICH DETERMINATIONS BY SBA WOULD HAVE MATERIALLY DELAYED CONTRACT AWARDS.

SECTIONS 1-703 (A) AND (B) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) REPEAT THE ABOVE REQUIREMENT THAT A CONTRACTING OFFICER ACCEPT AT FACE VALUE, FOR THE PARTICULAR PROCUREMENT INVOLVED, A REPRESENTATION BY THE BIDDER THAT IT IS A SMALL BUSINESS CONCERN, BUT ADD A PROVISION THAT NO BIDDER SHALL BE ELIGIBLE FOR AWARD AS A SMALL BUSINESS CONCERN UNLESS HE HAS IN GOOD FAITH REPRESENTED HIMSELF AS SMALL BUSINESS PRIOR TO THE OPENING OF BIDS. ASPR 1-703 (B) (1) (III) READS AS FOLLOWS:

"ACTION ON PROTESTS RECEIVED AFTER AWARD--- A PROTEST RECEIVED AFTER AWARD OF A CONTRACT SHALL BE FORWARDED TO THE SMALL BUSINESS ADMINISTRATION REGIONAL OFFICE SERVING THE AREA IN WHICH THE PROTESTED CONCERN IS LOCATED WITH A NOTATION THEREON THAT AWARD HAS BEEN MADE. THE PROTESTANT SHALL BE NOTIFIED THAT AWARD HAS BEEN MADE AND THAT HIS PROTEST HAS BEEN FORWARDED TO SBA FOR ITS CONSIDERATION IN FUTURE ACTIONS.'

THE INVITATION IN THIS CASE PROVIDED THAT, IN ORDER TO QUALIFY AS A SMALL BUSINESS CONCERN FOR THIS PROCUREMENT, THE NUMBER OF EMPLOYEES OF A BIDDER AND ITS AFFILIATES MUST NOT EXCEED 500 PERSONS, AND IN SUBMITTING ITS BID FORT BRAGG CERTIFIED ITSELF TO BE A SMALL BUSINESS CONCERN. SINCE THE AWARD WAS MADE ON AUGUST 17, 1966, AND YOUR PROTEST OF THE STATUS OF FORT BRAGG AS SMALL BUSINESS WAS NOT MADE UNTIL SEPTEMBER 2, 1966, ANY SIZE DETERMINATION BY SBA WOULD BE FOR CONSIDERATION IN FUTURE ACTIONS (ASPR 1- 703 (B) (1) (III) (, BUT WOULD NOT BE FOR CONSIDERATION ON THE INSTANT PROCUREMENT, UNLESS IT IS ESTABLISHED THAT FORT BRAGG DID NOT IN GOOD FAITH CERTIFY ITSELF AS SMALL BUSINESS, AS REQUIRED BY ASPR 1-703 (B). SEE 41 COMP. GEN. 252; B-154453, OCTOBER 6, 1964.

UPON RECEIPT OF THE INITIAL SBA SIZE DETERMINATION, THE CONTRACTING OFFICER, BY LETTER OF SEPTEMBER 22, 1966, ADVISED FORT BRAGG THAT IT HAD BEEN DETERMINED TO BE LARGE BUSINESS ON THE DATE OF AWARD AND REQUESTED A STATEMENT AS TO WHY IT HAD CERTIFIED ITSELF AS A SMALL BUSINESS CONCERN. IN REPLY, MR. L. A. LOVE, PRESIDENT OF FORT BRAGG, ADVISED THE CONTRACTING OFFICER THAT IN AUGUST OF 1963 HIS FIRM WAS ISSUED A DETERMINATION BY SBA THAT IT QUALIFIED AS A SMALL BUSINESS CONCERN, AND THAT THE FACTS CONCERNING THE FIRM'S SIZE ARE SUBSTANTIALLY THE SAME NOW AS THEY WERE THEN. THERE IS NO RECORD OF A CONTRARY SBA DETERMINATION IN THE INTERIM OR THAT THE CONTRACTING OFFICER HAD ANY INFORMATION WHICH WOULD CAUSE HIM TO QUESTION THE VALIDITY OF THE CERTIFICATION.

FROM AVAILABLE INFORMATION FURNISHED BY SBA IN CONNECTION WITH THE 1963 DETERMINATION, IT APPEARS THAT THE EMPLOYEE LIMITATION AT THAT TIME WAS 500 AND THAT FIRMS CONSIDERED BY THE RICHMOND REGIONAL OFFICE OF SBA TO BE AFFILIATES OF FORT BRAGG WERE QUEEN CITY COACH COMPANY (QUEEN CITY) WHICH OWNS 100 PERCENT OF THE STOCK OF FORT BRAGG, AND GEORGIA-FLORIDA COACHES, INC., TWO-THIRDS OF THE STOCK OF WHICH IS OWNED BY QUEEN CITY, THE TOTAL NUMBER OF EMPLOYEES OF ALL THREE BEING 483. A QUESTION WAS RAISED AT THAT TIME BY THE PROTESTING BIDDER AS TO WHETHER SMOKY MOUNTAIN STAGES, INC. (SMOKY MOUNTAIN), WAS AN AFFILIATE OF FORT BRAGG, BUT IT WAS APPARENTLY NOT CONSIDERED AS SUCH. IN MAKING THE CURRENT DETERMINATION THAT FORT BRAGG IS NOT A SMALL BUSINESS CONCERN, THE TWO FIRMS MENTIONED ABOVE AS AFFILIATES WERE AGAIN CONSIDERED TO BE AFFILIATES OF FORT BRAGG AND THE TOTAL NUMBER OF EMPLOYEES OF ALL THREE WAS DETERMINED TO BE 481. HOWEVER, THE CHARLOTTE REGIONAL OFFICE OF SBA, AS CONFIRMED BY THE SBA SIZE APPEALS BOARD, DETERMINED THAT SMOKY MOUNTAIN STAGES, INC., AND CAROLINA SCENIC STAGES, INC., WERE ALSO AFFILIATES OF FORT BRAGG AND THAT THEIR RESPECTIVE EMPLOYEE TOTALS OF 96 AND 95 RESULTED IN A TOTAL EMPLOYMENT OF 672 FOR FORT BRAGG AND ITS AFFILIATES. AS STATED ABOVE, SMOKY MOUNTAIN WAS IN THE PICTURE IN 1963, BUT WAS APPARENTLY NOT CONSIDERED TO BE AN AFFILIATE, AND CAROLINA SCENIC STAGES, INC., WHICH WAS NOT MENTIONED AT THAT TIME, IS CURRENTLY IN THE SAME RELATIVE POSITION AS SMOKY MOUNTAIN, IN THAT QUEEN CITY OWNS 50 PERCENT OF THE STOCK OF EACH. ADDITIONALLY, WE HAVE BEEN INFORMALLY ADVISED BY THE DEPARTMENT OF THE ARMY THAT ITS RECORDS SHOW QUEEN CITY AS OWNING 50 PERCENT OF THE STOCK OF SMOKY MOUNTAIN IN 1963. SINCE THE 50 PERCENT STOCK OWNERSHIP WAS ONE OF THE PRINCIPAL CONSIDERATIONS IN MAKING THE CURRENT DETERMINATION THAT QUEEN CITY HAS THE POWER TO CONTROL SMOKY MOUNTAIN AND CAROLINA SCENIC STAGES, AND SINCE BOTH CONCERNS ARE IN THE SAME POSITION AS WAS SMOKY MOUNTAIN IN 1963, AT WHICH TIME SMOKY MOUNTAIN WAS APPARENTLY NOT CONSIDERED TO BE AN AFFILIATE, WE DO NOT BELIEVE IT REASONABLY CAN BE SAID THAT FORT BRAGG SHOULD HAVE BEEN ON NOTICE THAT THESE TWO CONCERNS WOULD BE CONSIDERED BY SBA TO BE AFFILIATES WHEN IT SUBMITTED THE SELF-CERTIFICATION.

AFTER GIVING FULL CONSIDERATION TO PERTINENT REGULATIONS AND TO THE FACTS RECITED ABOVE, WE ARE UNABLE TO CONCLUDE THAT THE CERTIFICATION BY FORT BRAGG THAT IT WAS SMALL BUSINESS WAS NOT MADE IN GOOD FAITH. WE THEREFORE SEE NO VALID BASIS FOR DISTURBING THE AWARD AS MADE, AND YOUR PROTEST MUST BE DENIED.