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B-161693, JUL. 21, 1967

B-161693 Jul 21, 1967
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DA -AE07-67-B-2117 BECAUSE IT WAS NOT AN ELIGIBLE SMALL BUSINESS CONCERN. IT IS YOUR CONTENTION THAT WHEN A CONTRACTING OFFICER RECEIVES AN UNTIMELY PROTEST REGARDING THE SMALL BUSINESS STATUS OF A BIDDER WHO CERTIFIES ITSELF AS A SMALL BUSINESS CONCERN AND FORWARDS THE PROTEST TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR ITS CONSIDERATION IN FUTURE PROCUREMENTS PURSUANT TO THE PROVISIONS OF ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-703 (B) (1) (II). THE BID OF THE FIRM WHOSE SIZE STATUS IS QUESTIONED MUST BE CONSIDERED FOR AWARD EVEN THOUGH IT IS DETERMINED BY SBA THAT IT IS A LARGE BUSINESS CONCERN BEFORE ANY AWARD HAS BEEN MADE. WE HAVE HELD. THAT THE FINAL DETERMINATION OF THE ELIGIBILITY OF A BIDDER AS A SMALL BUSINESS CONCERN IS MADE AS OF THE DATE OF THE AWARD OF THE CONTRACT.

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B-161693, JUL. 21, 1967

BIDDERS - RESPONSIBILITY - SMALL BUSINESS DECISION TO PROTESTING BIDDER REAFFIRMING DECISION OF JUNE 30, 1967, HOLDING THAT AWARD TO A FIRM THAT HAD CERTIFIED ITSELF AS SMALL BUSINESS COULD NOT BE MADE AFTER AN UNTIMELY SIZE PROTEST HAD BEEN REFERRED TO SBA AND SBA DETERMINEDE FIRM TO BE LARGE BUSINESS CONCERN.

TO BAKER, HOSTETLER AND PATTERSON:

YOUR LETTER OF JULY 10, 1967, REQUESTS RECONSIDERATION OF OUR DECISION OF JUNE 30, 1967, B-161693, HOLDING THAT THE BID OF JOHNSON CORPORATION COULD NOT BE CONSIDERED FOR AWARD OF A CONTRACT UNDER INVITATION FOR BIDS NO. DA -AE07-67-B-2117 BECAUSE IT WAS NOT AN ELIGIBLE SMALL BUSINESS CONCERN.

IT IS YOUR CONTENTION THAT WHEN A CONTRACTING OFFICER RECEIVES AN UNTIMELY PROTEST REGARDING THE SMALL BUSINESS STATUS OF A BIDDER WHO CERTIFIES ITSELF AS A SMALL BUSINESS CONCERN AND FORWARDS THE PROTEST TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR ITS CONSIDERATION IN FUTURE PROCUREMENTS PURSUANT TO THE PROVISIONS OF ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-703 (B) (1) (II), THE BID OF THE FIRM WHOSE SIZE STATUS IS QUESTIONED MUST BE CONSIDERED FOR AWARD EVEN THOUGH IT IS DETERMINED BY SBA THAT IT IS A LARGE BUSINESS CONCERN BEFORE ANY AWARD HAS BEEN MADE.

WE DO NOT DISAGREE WITH YOUR CONTENTION THAT THE CONTRACTING OFFICER MAY, UNDER THE REGULATIONS CITED BY YOU, DISREGARD AN UNTIMELY PROTEST AND MAKE AN AWARD TO A FIRM WHICH HAS CERTIFIED ITSELF AS A SMALL BUSINESS CONCERN.

WE HAVE HELD, HOWEVER, THAT THE FINAL DETERMINATION OF THE ELIGIBILITY OF A BIDDER AS A SMALL BUSINESS CONCERN IS MADE AS OF THE DATE OF THE AWARD OF THE CONTRACT. FURTHER, WE HAVE HELD THAT A BIDDER MUST QUALIFY AS A SMALL BUSINESS AS A CONDITION FOR BIDDING UNDER AN INVITATION CONTAINING A TOTAL SMALL BUSINESS SET-ASIDE. SEE 42 COMP. GEN. 108, 112.

IN THE INSTANT CASE THE CONTRACTING OFFICER DID NOT MAKE AN AWARD OF A CONTRACT EITHER BEFORE SENDING THE UNTIMELY PROTEST TO THE SBA OR AT ANY TIME PRIOR TO THE DETERMINATION BY SBA THAT THE JOHNSON CORPORATION WAS NOT A SMALL BUSINESS CONCERN. AFTER THE SBA DETERMINED THAT JOHNSON CORPORATION WAS NOT A SMALL BUSINESS CONCERN IT IS OUR VIEW THAT WITH THIS KNOWLEDGE THE CONTRACTING OFFICER COULD NOT MAKE AN AWARD TO JOHNSON.

IN ADDITION, WHILE WE DID NOT EMPHASIZE THE FACT, WE DID POINT OUT IN OUR PRIOR DECISION THAT THE RECORD SHOWED THAT JOHNSON CORPORATION AFTER SUBMITTING ITS BID AND PRIOR TO BID OPENING BY AFFIRMATIVE ACTION ACQUIRED THE W. H. OLSEN MFG. COMPANY RESULTING IN ITS BECOMING A LARGE BUSINESS CONCERN. ALSO, THE RECORD SHOWS THAT BY LETTER OF MARCH 9, 1967, THE SMALL BUSINESS AND LABOR SURPLUS ADVISOR REQUESTED THE CLEVELAND REGIONAL DIRECTOR TO MAKE A SIZE DETERMINATION ON JOHNSON CORPORATION BECAUSE HIS OFFICE HAD RECEIVED INFORMATION THAT A CONTEMPLATED CHANGE THROUGH ACQUIRING OTHER FACILITIES WOULD CHANGE THE SIZE STATUS OF JOHNSON. MARCH 21, THE REGIONAL DIRECTOR ADVISED THAT AS OF MARCH 20, JOHNSON STILL QUALIFIED AS SMALL BUSINESS SINCE A MERGER HAD NOT YET TAKEN PLACE. VIEW THEREOF, IT APPEARS THAT JOHNSON WAS ON NOTICE THAT THE CONTEMPLATED MERGER, IF MADE, POSSIBLY WOULD RESULT IN ITS BECOMING A LARGE BUSINESS CONCERN. WHEN THE MERGER WAS MADE BY JOHNSON PRIOR TO BID OPENING WE THINK THAT IT WAS INCUMBENT UPON JOHNSON TO ADVISE SBA OF THE CHANGE AND OBTAIN A NEW CERTIFICATION AS TO ITS SIZE STATUS. IN THE ABSENCE OF SUCH ACTION, WE DO NOT THINK THAT JOHNSON PROPERLY COULD REPRESENT ITSELF AS SMALL BUSINESS AT THE TIME OF BID OPENING. WE HAVE TAKEN THE POSITION THAT IN THESE CIRCUMSTANCES THE BID MUST BE REJECTED AS NONRESPONSIVE. COMP. GEN. 550.

WE DO NOT AGREE WITH YOUR CONTENTION THAT OUR DECISION RENDERS THE PROVISION OF ASPR 1-703 (B) (1) (II) COMPLETELY MEANINGLESS. THE SELF CERTIFICATION PROCEDURE WAS DESIGNED TO SIMPLIFY AND EXPEDITE SIZE DETERMINATIONS AND PROCUREMENT PROCESSES. THE PROVISIONS OF ASPR 1-703 WERE ALSO DESIGNED TO PRECLUDE A DELAY IN THE PROCUREMENT PROCESSES. HOWEVER, THAT REGULATION WAS NEVER INTENDED TO PERMIT A CONTRACTING OFFICER TO KNOWINGLY MAKE AN AWARD TO A LARGE BUSINESS CONCERN. UNDER THE FACTS OF THE INSTANT CASE THE CONTRACTING OFFICER DID NOT ACCEPT THE SELF- CERTIFICATION OF JOHNSON CORPORATION AND AWARD IT A CONTRACT; RATHER HE DELAYED AN AWARD UNTIL SUCH TIME THAT HE WAS ON ACTUAL NOTICE THAT JOHNSON WAS BIG BUSINESS. IN THESE CIRCUMSTANCES, WE THINK THAT THE CONTRACTING OFFICER, HAVING FAILED TO AWARD A CONTRACT BASED ON JOHNSON'S SELF- CERTIFICATION THAT IT WAS A SMALL BUSINESS CONCERN, WAS PRECLUDED FROM MAKING AN AWARD TO JOHNSON AFTER HE HAD ACTUAL KNOWLEDGE THAT JOHNSON WAS NO LONGER A SMALL BUSINESS CONCERN. THIS WOULD BE CONTRARY NOT ONLY TO THE PROVISIONS OF THE INVITATION BUT ALSO TO THE LAW. MOREOVER, IT IS SETTLED THAT MOST STATUTES GOVERNING THE AWARDING OF PUBLIC CONTRACTS ARE ENACTED FOR THE BENEFIT OF THE PUBLIC AND NOT FOR THE BENEFIT OF THE BIDDERS. THE ASPR REGULATION HERE INVOLVED WAS ALSO ISSUED FOR THE BENEFIT OF THE GOVERNMENT. ITS PURPOSE IS TO GIVE DIRECTIONS FOR THE CONDUCT OF GOVERNMENT AGENTS IN MAKING CONTRACTS, AND THIS IS FOR THE PURPOSE OF PROTECTING THE PUBLIC. IF THE REGULATION WAS VIOLATED IT IS ONLY THE PUBLIC WHICH HAS A CAUSE FOR COMPLAINT, AND NOT AN UNSUCCESSFUL BIDDER. SEE COURT CASES CITED IN 33 COMP. GEN. 180, 182.

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