B-161933, OCT. 20, 1967

B-161933: Oct 20, 1967

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ON BASIS THAT CONTRACTOR IS NOT MANUFACTURER UNDER WALSH-HEALEY PUBLIC CONTRACTS ACT. LOW BIDDER WHO WAS DETERMINED BY CONTRACTING OFFICER TO BE QUALIFIED AS MANUFACTURER BASED UPON PREAWARD SURVEY WHICH DETERMINATION WAS AFFIRMED UPON REVIEW BY DEPT. OF LABOR HAVE JURISDICTION CONCERNING WHETHER FIRMS ARE REGULAR DEALERS OR MANUFACTURERS AND COMP. THIS IS MATTER FOR CONTRACTING OFFICER AND IN ABSENCE OF SHOWING OF BAD FAITH OR LACK OF REASONABLE BASIS DETERMINATION WILL NOT BE DISTURBED. TO AUTOQUIP CORPORATION: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER DATED JUNE 30 AND JULY 6. TWO BIDS WERE RECEIVED AND OPENED ON JUNE 2. 018.80 WAS SUBMITTED BY HYDRALIFTS. IN ITS BID THE CORPORATION REPRESENTED THAT IT WAS A MANUFACTURER.

B-161933, OCT. 20, 1967

BIDDERS - MANUFACTURER DETERMINATIONS DECISION TO AUTOQUIP CORPORATION, SECOND LOW BIDDER, PROTESTING AWARD TO HYDRALIFTS, INC. BY POST OFFICE DEPT. ON BASIS THAT CONTRACTOR IS NOT MANUFACTURER UNDER WALSH-HEALEY PUBLIC CONTRACTS ACT. LOW BIDDER WHO WAS DETERMINED BY CONTRACTING OFFICER TO BE QUALIFIED AS MANUFACTURER BASED UPON PREAWARD SURVEY WHICH DETERMINATION WAS AFFIRMED UPON REVIEW BY DEPT. OF LABOR MUST BE REGARDED AS ENTITLED TO AWARD SINCE CONTRACTING OFFICERS AND DEPT. OF LABOR HAVE JURISDICTION CONCERNING WHETHER FIRMS ARE REGULAR DEALERS OR MANUFACTURERS AND COMP. GEN. DOES NOT REVIEW SUCH DETERMINATIONS. REGARDING BIDDER'S FINANCIAL RESPONSIBILITY, THIS IS MATTER FOR CONTRACTING OFFICER AND IN ABSENCE OF SHOWING OF BAD FAITH OR LACK OF REASONABLE BASIS DETERMINATION WILL NOT BE DISTURBED.

TO AUTOQUIP CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER DATED JUNE 30 AND JULY 6, 1967, RESPECTIVELY, PROTESTING AGAINST THE AWARD OF A CONTRACT TO HYDRALIFTS, INC., UNDER SOLICITATION NO. 8-7-3, ISSUED BY THE ST. LOUIS REGION POST OFFICE DEPARTMENT, ST. LOUIS, MISSOURI.

THE SOLICITATION, ISSUED MAY 11, 1967, INVITED BIDS FOR FURNISHING 8 PLATFORMS IN ACCORDANCE WITH SPECIFICATION POD-P-255/RE) DELIVERED, UNLOADED, ASSEMBLED, AND INSTALLED AT SPECIFIED LOCATIONS. TWO BIDS WERE RECEIVED AND OPENED ON JUNE 2, 1967. THE LOWEST BID IN THE AMOUNT OF $17,018.80 WAS SUBMITTED BY HYDRALIFTS, INC., AND IN ITS BID THE CORPORATION REPRESENTED THAT IT WAS A MANUFACTURER. THE ONLY OTHER BID IN THE AMOUNT OF $22,975 WAS SUBMITTED BY YOUR FIRM.

BY LETTER DATED JUNE 8, 1967, YOU PROTESTED AGAINST THE PROPOSED AWARD OF A CONTRACT TO HYDRALIFTS, INC., UNDER THE SUBJECT SOLICITATION ON THE GROUND THAT IT HAD MISREPRESENTED ITSELF AS A MANUFACTURER IN ITS BID. UPON RECEIPT OF YOUR LETTER THE CONTRACTING OFFICER REQUESTED THE ENGINEERING BRANCH, ST. LOUIS REGION, TO CONDUCT A PREAWARD SURVEY OF THE FACILITIES OF HYDRALIFTS, INC., FOR THE PURPOSE OF DETERMINING WHETHER THE CORPORATION WAS A MANUFACTURER AS REPRESENTED IN ITS BID.

IN HIS PREAWARD SURVEY REPORT DATED JUNE 19, 1967, THE SURVEYOR STATED THAT HYDRALIFTS, INC., USES SPACE RENTED FROM THE CONTINENTAL BOILER AND SHEET IRON WORKS TO ASSEMBLE HYDRALIFTS RODUCTS; THAT OTHER AREAS OF THE PLANT ARE AVAILABLE IN THE PRODUCTION OF THIS EQUIPMENT ON AN AS-NEED-BE BASIS; THAT THE CORPORATION HAS THE USE OF CERTAIN DESIGN ENGINEERS AND DRAFTSMEN EMPLOYED BY THE CONTINENTAL BOILER AND SHEET IRON WORKS; AND THAT HE HAS VERIFIED THAT HYDRALIFTS HAS PURCHASED MATERIALS AND EQUIPMENT FROM VARIOUS SUPPLIERS OVER THE PAST YEAR. IT ALSO IS STATED THAT AN INSPECTION HAS BEEN MADE OF EQUIPMENT INSTALLED BY HYDRALIFTS, INC., IN CERTAIN INSTALLATIONS AND THAT IT WAS THE CONCLUSION OF THE SURVEYOR THAT HYDRALIFTS, INC., QUALIFIED AS A MANUFACTURER UNDER THE PROVISIONS OF PARAGRAPH 1-12.603-1 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR). JUNE 27, 1967, A CONTRACT FOR FURNISHING THE PLATFORMS WAS AWARDED TO HYDRALIFTS, INC. BY LETTER DATED JUNE 28, 1967, ST. LOUIS REGIONAL OFFICE ADVISED YOU THAT YOUR PROTEST WAS BEING DENIED ON THE BASIS THAT IT HAD BEEN DETERMINED THAT HYDRALIFTS, INC., QUALIFIED AS A MANUFACTURER AND MET THE STANDARDS OF A RESPONSIBLE PROSPECTIVE CONTRACTOR AS SET FORTH IN FPR 1-1.310-5.

IN YOUR LETTER DATED JULY 6, 1967, TO OUR OFFICE, YOU STATE THAT YOU WERE SO CERTAIN THAT HYDRALIFTS, INC., COULD NOT QUALIFY AS A MANUFACTURER THAT YOU REQUESTED AN INDEPENDENT INVESTIGATIVE AGENCY TO SUBMIT A REPORT ON HYDRALIFTS, INC. YOU STATE THAT SUCH REPORT ESTABLISHES THAT HYDRALIFTS, INC., DOES NOT QUALIFY AS A MANUFACTURER AND THAT ON THE DATE OF THE AWARD YOUR REPRESENTATIVE ATTEMPTED TO DELIVER A COPY OF SUCH REPORT TO THE CHIEF PROCUREMENT AND SUPPLY OFFICER OF THE POST OFFICE DEPARTMENT, WASHINGTON, D.C., BUT WITHOUT SUCCESS. YOU STATE WHILE IT IS DIFFICULT FOR YOUR FIRM TO ACCEPT THE DETERMINATION OF THE CONTRACTING OFFICE THAT HYDRALIFTS, INC., MET THE STANDARDS OF A RESPONSIBLE PROSPECTIVE CONTRACTOR AS SET FORTH IN FPR 1-1.310-5, IN VIEW OF THE FACTS DISCLOSED IN THE REPORT, THERE IS NO POSSIBLE WAY THAT YOUR FIRM COULD ACCEPT THE CONTRACTING OFFICER'S DETERMINATION THAT HYDRALIFTS, INC., QUALIFIED AS A MANUFACTURER UNDER THE PROVISIONS OF FPR 1-12.603-1.

IN THE REPORT OF THE INDEPENDENT INVESTIGATIVE AGENCY SUBMITTED WITH YOUR LETTER OF JULY 6, 1967, IT IS STATED THAT AN INVESTIGATION DISCLOSED THAT HYDRALIFTS, INC., HAS NO ACTUAL MANUFACTURING FACILITIES OF ITS OWN; THAT IT DOES NO FABRICATING OR ASSEMBLING ON ITS OWN ACCOUNT; THAT IT RENTS OFFICE SPACE AND MAINTAINS A TELEPHONE ANSWERING SERVICE AT 2319 HAMPTON AVENUE, ST. LOUIS, MISSOURI; AND THAT HYDRALIFTS, INC., IS ENGAGED IN THE SALE OF DOCK RAMPS AND LIFT TABLES USED IN CONSTRUCTION WORK. IT APPEARS THAT THE PRIVATE INVESTIGATOR AT THE TIME HE PREPARED HIS REPORT WAS NOT AWARE OF THE FACT THAT THE CORPORATION ALSO MAINTAINED AN ASSEMBLY PLANT AT 5601 WEST PARK AVENUE, ST. LOUIS, MISSOURI, WHERE IT ASSEMBLED HYDRALIFTS PRODUCTS.

THE WALSH-HEALEY PUBLIC CONTRACTS ACT OF JUNE 30, 1936, AS AMENDED, 41 U.S.C. 35, PROVIDES THAT, WITH CERTAIN EXCEPTIONS NOT HERE MATERIAL, EVERY CONTRACT EXCEEDING $10,000 IN AMOUNT ENTERED INTO BY ANY GOVERNMENT AGENCY FOR THE PROCUREMENT OF SUPPLIES SHALL CONTAIN A STIPULATION THAT THE CONTRACTOR IS A MANUFACTURER OF OR REGULAR DEALER IN SUCH SUPPLIES AND THAT ANY BREACH OF SUCH STIPULATION SHALL RENDER THE CONTRACTOR LIABLE FOR LIQUIDATED DAMAGES, AND CONSTITUTES GROUNDS FOR CANCELLATION OF THE CONTRACT. THE ACT, AS AMENDED, FURTHER PROVIDES AT 41 U.S.C. 38 THAT THE SECRETARY OF LABOR SHALL HAVE AUTHORITY TO ADMINISTER THE PROVISIONS OF THAT ACT, AND TO MAKE SUCH RULES AND REGULATIONS AS MAY BE NECESSARY TO THAT END.

THE "WALSH-HEALEY PUBLIC CONTRACTS ACT RULINGS AND INTERPRETATIONS" NO. 3, PUBLISHED BY THE DEPARTMENT OF LABOR, STATES AT SECTION 29:

"/A) THE RESPONSIBILITY OF DETERMINING WHETHER OR NOT A BIDDER IS QUALIFIED AS A MANUFACTURER OR AS A REGULAR DEALER UNDER THE PUBLIC CONTRACTS ACT RESTS IN THE FIRST INSTANCE WITH THE CONTRACTING AGENCY. HOWEVER, ANY DECISION WHICH THE CONTRACTING OFFICER MIGHT MAKE IS SUBJECT TO REVIEW BY THE DEPARTMENT OF LABOR WHICH IS CHARGED WITH THE ADMINISTRATION OF THE ACT. THE DEPARTMENT OF LABOR MAY DETERMINE THE QUALIFICATIONS OF A BIDDER IN THE FIRST INSTANCE IN THE ABSENCE OF ANY DECISION BY THE CONTRACTING OFFICER.'

FPR 1-12.603-1 PROVIDES THAT IN ORDER TO QUALIFY AS A MANUFACTURER, A BIDDER MUST BE ABLE TO SHOW BEFORE AWARD THAT HE IS (A) AN ESTABLISHED MANUFACTURER OF THE PARTICULAR GOODS OR GOODS OF THE GENERAL CHARACTER SOUGHT BY THE GOVERNMENT, AND (B) IF HE IS NEWLY ENTERING IN SUCH MANUFACTURING ACTIVITY, THAT HE HAS MADE ALL NECESSARY PRIOR ARRANGEMENTS FOR SPACE, EQUIPMENT AND PERSONNEL TO PERFORM THE MANUFACTURING OPERATIONS REQUIRED FOR THE FULFILLMENT OF THE CONTRACT. PARAGRAPH 1-2.404-2 THEREOF IMPOSES UPON ALL PROCUREMENT OFFICIALS THE DUTY TO REJECT ANY BID WHICH FAILS TO CONFORM TO THE ESSENTIAL REQUIREMENTS OF THE INVITATION, AND, IN THAT CONNECTION, THE OBLIGATION TO DETERMINE THE ELIGIBILITY OF ANY BIDDER UNDER THE ABOVE-QUOTED REGULATION, SUBJECT TO REVIEW BY THE DEPARTMENT OF LABOR. PURSUANT THERETO, THE CONTRACTING OFFICER FOUND HYDRALIFTS, INC., TO BE QUALIFIED AS A MANUFACTURER AT THAT TIME FOR THE PURPOSES OF THE PROCUREMENT INVOLVED BASED UPON A PREAWARD SURVEY. UPON REVIEW, THAT FINDING WAS AFFIRMED BY THE DEPARTMENT OF LABOR, WAGE AND HOUR AND PUBLIC CONTRACTS DIVISIONS, IN ITS LETTER OF SEPTEMBER 6, 1967, TO YOUR FIRM.

OUR OFFICE DOES NOT HAVE JURISDICTION TO REVIEW DETERMINATIONS AS TO WHETHER PARTICULAR FIRMS ARE REGULAR DEALERS OR MANUFACTURERS. B 147620, JANUARY 22, 1962. RATHER, WE HAVE CONSIDERED THAT SUCH DETERMINATIONS REST WITH THE CONTRACTING OFFICER SUBJECT TO THE REVIEW OF THE DEPARTMENT OF LABOR WHICH HAS THE FINAL AUTHORITY. SEE 41 U.S.C. 35-45. ALSO, SEE B -148715, JUNE 25, 1962.

REGARDING THE FINANCIAL RESPONSIBILITY OF HYDRALIFTS, INC., YOU ARE ADVISED THAT QUESTIONS CONCERNING THE QUALIFICATIONS OF A PROPOSED CONTRACTOR ARE FOR RESOLUTION PRIMARILY BY THE ADMINISTRATIVE OFFICERS CONCERNED. IN THE ABSENCE OF ANY SHOWING OF BAD FAITH OR LACK OF A REASONABLE BASIS FOR THE DETERMINATION, WE ARE NOT JUSTIFIED IN OBJECTING TO A DETERMINATION MADE ON THIS QUESTION BY THE ADMINISTRATIVE AGENCY. COMP. GEN. 430; 36 ID. 42. HERE, THE POST OFFICE DEPARTMENT HAS DETERMINED THAT HYDRALIFTS, INC., IS A RESPONSIBLE BIDDER AND THE RECORD DISCLOSES NO SHOWING OF BAD FAITH OR LACK OF A REASONABLE BASIS FOR SUCH DETERMINATION.

IN VIEW OF THE RECORD BEFORE US, WE SEE NO VALID BASIS FOR OBJECTING TO THE ACTION OF THE POST OFFICE DEPARTMENT IN DETERMINING THAT HYDRALIFTS, INC., AS THE RESPONSIVE, RESPONSIBLE LOW BIDDER, WAS ENTITLED TO THE AWARD OF THE INSTANT PROCUREMENT.