B-161216, MAY 22, 1967

B-161216: May 22, 1967

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ARVIN: REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER DATED APRIL 7. FOUR BIDS RECEIVED IN RESPONSE TO THE INVITATION WERE OPENED. A LATE BID WAS RECEIVED FROM THE NATIONAL LOCK BOX COMPANY. NATIONAL WAS ADVISED BY LETTER OF FEBRUARY 10. IF POSSIBLE) OF MAILING WAS RECEIVED BY FEBRUARY 17. IT WAS DETERMINED BY THE GOVERNMENT THAT LATE RECEIPT WAS DUE SOLELY TO A DELAY IN THE MAIL FOR WHICH THE COMPANY WAS NOT RESPONSIBLE. IT IS REPORTED THAT AS OF CLOSE OF BUSINESS ON FEBRUARY 17. WAS THE OSTENSIBLE LOW BIDDER. IT IS FURTHER REPORTED THAT ON FEBRUARY 17 AND 20. THAT REFLECTOR HARDWARE CORPORATION (THE PARENT COMPANY) WAS NOT DOMINANT IN THE INDUSTRY. THE SBA DECISION WAS APPEALED ON THE BASES THAT JEBCO'S PROTEST HAD NOT BEEN FILED TIMELY IN ACCORDANCE WITH FPR SEC. 1-1.703-2 (B) AND THAT IT HAD 500 EMPLOYEES OR LESS.

B-161216, MAY 22, 1967

TO MR. LESTER C. ARVIN:

REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER DATED APRIL 7, 1967, ON BEHALF OF MIDLAND INDUSTRIES, INC., PROTESTING AGAINST THE SMALL BUSINESS ADMINISTRATION (SBA) FINDING MADE CONCERNING MIDLAND'S SMALL BUSINESS STATUS AND AWARD OF CONTRACT MADE TO ANOTHER FIRM UNDER POST OFFICE DEPARTMENT INVITATION FOR BIDS NO. 1162.

THE SUBJECT INVITATION, A TOTAL SMALL BUSINESS SET-ASIDE, ISSUED ON JANUARY 19, 1967, SOLICITED BIDS FOR FURNISHING CERTAIN DISTRIBUTION CASES (WING LETTER CASES, ETC.), AND ON FEBRUARY 9, 1967, FOUR BIDS RECEIVED IN RESPONSE TO THE INVITATION WERE OPENED. ON FEBRUARY 10 AT 12:30 P.M., A LATE BID WAS RECEIVED FROM THE NATIONAL LOCK BOX COMPANY, INC., BY CERTIFIED MAIL. IN ACCORDANCE WITH THE "LATE BIDS AND MODIFICATIONS OR WITHDRAWALS" CLAUSE OF THE INVITATION, NATIONAL WAS ADVISED BY LETTER OF FEBRUARY 10, 1967, THAT ITS LATE BID WOULD NOT BE CONSIDERED UNLESS CLEAR AND CONVINCING EVIDENCE ESTABLISHING THE DATE (AND TIME, IF POSSIBLE) OF MAILING WAS RECEIVED BY FEBRUARY 17, 1967, AND IT WAS DETERMINED BY THE GOVERNMENT THAT LATE RECEIPT WAS DUE SOLELY TO A DELAY IN THE MAIL FOR WHICH THE COMPANY WAS NOT RESPONSIBLE. IT IS REPORTED THAT AS OF CLOSE OF BUSINESS ON FEBRUARY 17, 1967, SUCH EVIDENCE HAD NOT BEEN RECEIVED BY THE PROCURING OFFICE. AT THIS TIME, MIDLAND INDUSTRIES, INC., WAS THE OSTENSIBLE LOW BIDDER.

IT IS FURTHER REPORTED THAT ON FEBRUARY 17 AND 20, 1967, JEBCO, INC., CHALLENGED THE SMALL BUSINESS STATUS OF MIDLAND. ON FEBRUARY 20, THE PROCURING AGENCY ADVISED MIDLAND THAT ITS SMALL BUSINESS STATUS HAD BEEN CHALLENGED AND REQUESTED IT TO FURNISH INFORMATION CONCERNING TOTAL NUMBER OF EMPLOYEES, INCLUDING PARENT COMPANY AND AFFILIATES. MIDLAND ADVISED THAT IT HAD A TOTAL OF 906 EMPLOYEES; THAT REFLECTOR HARDWARE CORPORATION (THE PARENT COMPANY) WAS NOT DOMINANT IN THE INDUSTRY; AND THAT A SMALL BUSINESS ADMINISTRATION CERTIFICATE WOULD BE PROVIDED. THEREAFTER, THE PROCURING AGENCY REQUESTED THE SBA REGIONAL OFFICE AT WICHITA, KANSAS, TO MAKE A SIZE DETERMINATION ON MIDLAND, AND THE RECORD SHOWS THAT THE SBA REGIONAL OFFICE DETERMINED THAT MIDLAND DID NOT QUALIFY AS AN ELIGIBLE SMALL BUSINESS CONCERN FOR AWARD UNDER THE SUBJECT INVITATION. THE SBA DECISION WAS APPEALED ON THE BASES THAT JEBCO'S PROTEST HAD NOT BEEN FILED TIMELY IN ACCORDANCE WITH FPR SEC. 1-1.703-2 (B) AND THAT IT HAD 500 EMPLOYEES OR LESS. BY FINDINGS AND DECISION OF MARCH 23, 1967, THE SBA SIZE APPEALS BOARD SUSTAINED THE DETERMINATION OF THE SBA REGIONAL OFFICE IN FINDING THAT MIDLAND DID NOT QUALIFY AS AN ELIGIBLE SMALL BUSINESS CONCERN UNDER THE CIRCUMSTANCES OF THIS PROCUREMENT.

YOU CONTEND THAT THE PROTEST BY JEBCO AGAINST THE SIZE STATUS OF MIDLAND WAS NOT TIMELY FILED AND, THEREFORE, NEITHER THE SBA NOR ITS SIZE APPEALS BOARD HAD ANY JURISDICTION TO MAKE A FINDING AS TO THE SIZE STATUS OF MIDLAND. ASIDE FROM QUESTIONING THE JURISDICTION OF THE SBA IN THIS MATTER, YOU SUBMIT THAT MIDLAND CERTIFIED ITS SMALL BUSINESS SIZE IN GOOD FAITH IN THAT AT THE TIME OF BIDDING ON THIS PROCUREMENT IT HAD ONLY 35 EMPLOYEES.

UNDER 15 U.S.C. 637 (B) (6), SBA IS AUTHORIZED TO DETERMINE WHICH FIRMS WITHIN ANY INDUSTRY ARE TO BE DESIGNATED AS SMALL BUSINESS CONCERNS FOR THE PURPOSES OF GOVERNMENT PROCUREMENT. THIS PROVISION OF LAW FURTHER STATES THAT "OFFICES OF THE GOVERNMENT HAVING PROCUREMENT OR LENDING POWERS * * * SHALL ACCEPT AS CONCLUSIVE THE ADMINISTRATION'S DETERMINATION AS TO WHICH ENTERPRISES ARE TO BE DESIGNATED "SMALL-BUSINESS CONCERNS," AS AUTHORIZED AND DIRECTED UNDER THIS PARAGRAPH.'

SINCE THE DECISION OF SBA, BY STATUTE, IS "CONCLUSIVE," WE FIND NO LEGAL BASIS TO QUESTION ITS DETERMINATION THAT MIDLAND WAS NOT SMALL BUSINESS FOR PURPOSES OF THE INSTANT PROCUREMENT. SEE 44 COMP. GEN. 271.

CONCERNING THE LATE FILING BY JEBCO OF ITS PROTEST AGAINST THE SIZE STATUS OF MIDLAND, THE SBA SIZE APPEALS BOARD DETERMINED THAT THE PROTEST WAS TIMELY FILED SINCE THE LATE BIDDER WAS GIVEN UNTIL FEBRUARY 17, 1967, TO ESTABLISH THE ACCEPTABILITY OF HIS LATE BID AND THAT THIS HAD THE PRACTICAL EFFECT OF EXTENDING THE BID OPENING DATE FROM FEBRUARY 9 TO FEBRUARY 17, AT WHICH TIME ALL BIDDERS COULD FIRST LEARN THE IDENTITY OF ALL OTHER BIDDERS. ALTHOUGH, UNDER THE REGULATIONS, THE CONTRACTING OFFICER COULD HAVE DETERMINED THE PROTEST WAS UNTIMELY FILED AND ACCEPTED AT FACE VALUE THE SELF-CERTIFICATION OF MIDLAND, HE CHOSE TO SUBMIT THE SIZE QUESTION FOR DETERMINATION. WE DO NOT BELIEVE THAT A FAILURE TO FOLLOW LITERALLY A PROCEDURAL REQUIREMENT COULD RENDER AN OTHERWISE CONCLUSIVE DETERMINATION INVALID, ESPECIALLY SINCE THE CONTRACTING OFFICER ON HIS OWN MOTION COULD HAVE REQUESTED A SIZE DETERMINATION UP TO THE DATE OF AWARD. CONSIDERING THAT THE SBA DETERMINATION WAS CONCLUSIVE, AND THAT MIDLAND WAS NOT LEGALLY ENTITLED TO AN AWARD UNDER THE INVITATION, WE FIND NO BASIS TO CONCLUDE THAT THE SBA DETERMINATION WAS IN ERROR OR THAT AN AWARD TO JEBCO WOULD BE IMPROPER. FURTHER, ON THE FACTS BEFORE US, WE SEE NO VALID BASIS FOR A COLLATERAL ATTACK ON THE SBA SIZE DETERMINATION BECAUSE OF A TECHNICAL FAILURE TO COMPLY WITH PROCUREMENT REGULATIONS. CF. 2 AM. JUR. 2D, ADMINISTRATIVE LAW, SECTION 354.