B-161260, JUN. 8, 1967

B-161260: Jun 8, 1967

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UPON THE OPENING OF BIDS THE APPARENT LOW BID WAS SUBMITTED BY FLORIDA PAPER MILL PRODUCTS. YOUR PROTEST IS MADE PRIMARILY ON THE GROUND THAT FLORIDA PAPER LACKS THE CAPACITY TO MEET THE INVITATION'S DELIVERY SCHEDULE. YOU CONTEND THAT AN AWARD TO YOUR FIRM IS VITAL TO THE GOVERNMENT'S INTEREST BECAUSE YOUR PLANT IS LOCATED IN A DESIGNATED DEPRESSED LABOR AREA AND THE CORPORATION HAS OUTSTANDING LOANS FOR APPROXIMATELY $2. 000 WHICH ARE GUARANTEED BY THE ECONOMIC DEVELOPMENT ADMINISTRATION OF THE DEPARTMENT OF COMMERCE. THE QUESTION CONCERNING FLORIDA PAPER'S CAPACITY AND CREDIT WAS THEN SUBMITTED TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR CONSIDERATION AS TO WHETHER A CERTIFICATE OF COMPETENCY SHOULD BE ISSUED TO THE CORPORATION.

B-161260, JUN. 8, 1967

TO NORTHLAND PAPER COMPANY, INC.:

WE REFER TO YOUR TELEGRAM DATED APRIL 12, 1967, AND SUPPORTING LETTER DATED MAY 1, 1967, PROTESTING THE AWARD OF A CONTRACT TO ANY BIDDER OTHER THAN YOUR FIRM UNDER INVITATION FOR BIDS NO. FPNSP-6L 4630.

THE INVITATION, ISSUED UNDER A TOTAL SMALL BUSINESS SET-ASIDE, REQUESTED BIDS FOR FURNISHING SEVERAL SUPPLY DEPOTS OF THE GENERAL SERVICES ADMINISTRATION WITH NORMAL REQUIREMENTS FOR MEMORANDUM PADS, FSC CLASS 7530, FOR THE PERIOD MAY 1, 1967, TO APRIL 30, 1968. UPON THE OPENING OF BIDS THE APPARENT LOW BID WAS SUBMITTED BY FLORIDA PAPER MILL PRODUCTS, INC. (FLORIDA PAPER), ON APPROXIMATELY HALF OF THE ITEMS COVERED BY THE INVITATION.

YOUR PROTEST IS MADE PRIMARILY ON THE GROUND THAT FLORIDA PAPER LACKS THE CAPACITY TO MEET THE INVITATION'S DELIVERY SCHEDULE. ACCORDINGLY, YOU REQUEST THAT AWARD OF A CONTRACT BE MADE TO YOUR FIRM, THE NEXT LOW BIDDER. ADDITIONALLY, YOU CONTEND THAT AN AWARD TO YOUR FIRM IS VITAL TO THE GOVERNMENT'S INTEREST BECAUSE YOUR PLANT IS LOCATED IN A DESIGNATED DEPRESSED LABOR AREA AND THE CORPORATION HAS OUTSTANDING LOANS FOR APPROXIMATELY $2,000,000 WHICH ARE GUARANTEED BY THE ECONOMIC DEVELOPMENT ADMINISTRATION OF THE DEPARTMENT OF COMMERCE.

CONCERNING THE QUESTION OF FLORIDA PAPER'S CAPACITY TO MEET THE INVITATION'S DELIVERY REQUIREMENTS, THE PROCURING AGENCY REPORTS THAT IT EVALUATED THE LOW BIDDER'S FINANCIAL RESPONSIBILITY AND CAPACITY TO MEET THE INVITATION'S REQUIREMENTS AND CONCLUDED THAT FLORIDA PAPER COULD NOT BE CONSIDERED A RESPONSIBLE BIDDER ON EITHER BASIS. HOWEVER, IN ACCORDANCE WITH THE REQUIREMENT OF SECTION 1-1.708 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR), THE QUESTION CONCERNING FLORIDA PAPER'S CAPACITY AND CREDIT WAS THEN SUBMITTED TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR CONSIDERATION AS TO WHETHER A CERTIFICATE OF COMPETENCY SHOULD BE ISSUED TO THE CORPORATION. ON APRIL 11, 1967, SBA CERTIFIED THAT THE CORPORATION WAS COMPETENT AS TO BOTH CAPACITY AND CREDIT TO PERFORM THE PROPOSED PROCUREMENT, AND THE CONTRACTING OFFICER THEREAFTER AWARDED A CONTRACT TO IT ON APRIL 26, 1967, COVERING THE ITEMS ON WHICH IT WAS THE LOW BIDDER.

SECTION 8 (B) (7) OF PUBLIC LAW 85-536, APPROVED JULY 18, 1958, 15 U.S.C. 637 (B) (7), EMPOWERS THE SBA:

"/7)TO CERTIFY TO GOVERNMENT PROCUREMENT OFFICERS, * * * WITH RESPECT TO THE COMPETENCY, AS TO CAPACITY AND CREDIT, OF ANY SMALL BUSINESS CONCERN * * * TO PERFORM A SPECIFIC GOVERNMENT CONTRACT. IN ANY CASE IN WHICH A SMALL-BUSINESS CONCERN * * * HAS BEEN CERTIFIED BY OR UNDER THE AUTHORITY OF THE ADMINISTRATION TO BE A COMPETENT GOVERNMENT CONTRACTOR WITH RESPECT TO CAPACITY AND CREDIT AS TO A SPECIFIC GOVERNMENT CONTRACT, THE OFFICERS OF THE GOVERNMENT HAVING PROCUREMENT * * * POWERS ARE DIRECTED TO ACCEPT SUCH CERTIFICATION AS CONCLUSIVE, AND ARE AUTHORIZED TO LET SUCH GOVERNMENT CONTRACT TO SUCH CONCERN * * * WITHOUT REQUIRING IT TO MEET ANY OTHER REQUIREMENT WITH RESPECT TO CAPACITY AND CREDIT; * * *" IT IS CLEAR THAT THE FACTS OF THE PRESENT CASE PLACE IT SQUARELY WITHIN THE CONTEMPLATION OF THIS STATUTE REQUIRING THE CONTRACTING OFFICER TO ACCEPT SBA'S CERTIFICATION OF COMPETENCY AS CONCLUSIVE IN MAKING AN AWARD UNDER THIS INVITATION. FURTHERMORE, HIS ACTION CANNOT BE QUESTIONED BY THIS OFFICE SINCE WE HAVE NO AUTHORITY TO REVIEW THE DETERMINATIONS OF SBA (EXCEPT FOR FRAUD OR THE LIKE) OR TO REQUIRE IT TO ISSUE OR DENY ANY SMALL BUSINESS CONCERN A CERTIFICATE OF COMPETENCY.

WITH RESPECT TO YOUR STATEMENT THAT AWARD TO YOUR FIRM IS VITAL TO THE GOVERNMENT'S INTEREST, THE PROCUREMENT STATUTES TOGETHER WITH THE REGULATIONS REQUIRE THAT AN AWARD OF A CONTRACT BE MADE ONLY TO THE LOW RESPONSIVE AND RESPONSIBLE BIDDER UNLESS THERE IS A COMPELLING REASON TO REJECT ALL BIDS AND CANCEL THE INVITATION. SEE 41 U.S.C. 253 AND FPR 1- 2.404 (A). WE ARE UNAWARE OF ANY EXCEPTION TO THIS RULE EITHER IN PROCUREMENTS INVOLVING DEPRESSED LABOR AREAS OR FOR FIRMS POSSESSING GOVERNMENT GUARANTEED LOANS WHICH WOULD HAVE PERMITTED AN AWARD TO YOUR FIRM. PARENTHETICALLY, WE ALSO NOTE THAT WHERE THE PROCUREMENT REGULATIONS PROMOTE A POLICY OF GOVERNMENT PREFERENCE FOR CERTAIN BIDDERS, SUCH AS FOR DESIGNATED LABOR SURPLUS AREAS AND FOR DEPRESSED INDUSTRIES, THESE REGULATIONS EXPRESSLY PROHIBIT PAYMENT OF A PRICE DIFFERENTIAL.

IN VIEW OF THE ABOVE WE FIND NO LEGAL BASIS FOR OBJECTING TO THE AWARD MADE TO FLORIDA PAPER AND YOUR PROTEST MUST THEREFORE BE DENIED.