B-164555, SEPT. 10, 1968

B-164555: Sep 10, 1968

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TO DANIELS MANUFACTURING CORPORATION: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JUNE 10. ON THE BASIS THAT A PORTION OF THE PROCUREMENT SHOULD HAVE BEEN SET ASIDE FOR SMALL BUSINESS. THE RECORD AS SUBMITTED SHOWS THAT THE ITEM IS A QUALIFIED PRODUCTS LIST (QPL) ITEM REQUIRING QUALIFICATION APPROVAL PRIOR TO THE TIME SET FOR BID OPENING. YOUR COMPANY WAS THE SOLE APPROVED SOURCE AND RECEIVED ALL AWARDS FOR SUCH PROCUREMENT DURING THESE PERIODS AT PRICES RANGING FROM A LOW OF $110.75 TO A HIGH OF $129.50 EACH. THE BUCHANAN ELECTRIC COMPANY QUALIFIED AS A SOURCE FOR THIS ITEM AND THEIR NAME WAS ADDED TO THE QPL. THIS ITEM IS BEING PROCURED ON A COMPETITIVE BASIS FOR THE FIRST TIME. TWO PROPOSALS WERE RECEIVED.

B-164555, SEPT. 10, 1968

TO DANIELS MANUFACTURING CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JUNE 10, 1968, PROTESTING THE AWARD OF CONTRACT TO ANY OTHER BIDDER UNDER SOLICITATION NO. K/W/00396/TL/T/F, ISSUED BY THE GENERAL SERVICES ADMINISTRATION,ON THE BASIS THAT A PORTION OF THE PROCUREMENT SHOULD HAVE BEEN SET ASIDE FOR SMALL BUSINESS.

THE SOLICITATION AS ISSUED MAY 15, 1968, REQUESTED PROPOSALS FOR A DEFINITE QUANTITY OF 375 HAND OPERATED CRIMPING TOOLS, FEDERAL SUPPLY CATALOG GROUP 5120 AND SPECIFIED THAT THE CONTRACT WOULD BE NEGOTIATED PURSUANT TO SECTION 302 (C) (2) OF TITLE III OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949 (41 U.S.C. 252 (C) (2) ).

THE RECORD AS SUBMITTED SHOWS THAT THE ITEM IS A QUALIFIED PRODUCTS LIST (QPL) ITEM REQUIRING QUALIFICATION APPROVAL PRIOR TO THE TIME SET FOR BID OPENING. THE PROCUREMENT HISTORY OF THE ITEM DISCLOSES THAT FROM 1964 THROUGH 1967, YOUR COMPANY WAS THE SOLE APPROVED SOURCE AND RECEIVED ALL AWARDS FOR SUCH PROCUREMENT DURING THESE PERIODS AT PRICES RANGING FROM A LOW OF $110.75 TO A HIGH OF $129.50 EACH. IN SEPTEMBER 1967, THE BUCHANAN ELECTRIC COMPANY QUALIFIED AS A SOURCE FOR THIS ITEM AND THEIR NAME WAS ADDED TO THE QPL. AS A RESULT, THEREOF, THIS ITEM IS BEING PROCURED ON A COMPETITIVE BASIS FOR THE FIRST TIME.

BY OPENING DATE AT CLOSE OF BUSINESS ON MAY 27, 1968, TWO PROPOSALS WERE RECEIVED. YOUR INITIAL OFFER FOR THE ITEM TO THREE F.O.B. DESTINATIONS WAS $80.70, $80.70 AND $79.45. BUCHANAN OFFERED AN INITIAL PRICE OF $79 PER ITEM FOR ALL THREE F.O.B. DESTINATIONS. DURING THE COURSE OF NEGOTIATIONS, YOU REVISED YOUR OFFER TO $78.75 FOR EACH ITEM TO ALL DESTINATIONS AND BUCHANAN REVISED ITS OFFER TO $75 FOR EACH ITEM TO ALL DESTINATIONS. THE CONTRACTING OFFICER DETERMINED BUCHANAN TO BE THE LOW RESPONSIVE OFFEROR FOR AWARD.

YOUR LETTER OF PROTEST DATED JUNE 7, 1968, TO THE PROCURING ACTIVITY AND YOUR LETTER WITH ENCLOSURE TO THIS OFFICE DATED JUNE 10, 1968,CONTEND THAT IT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT AND MORE FAIR TO YOUR FIRM IF A PORTION OF THIS PROCUREMENT WERE SET ASIDE FOR SMALL BUSINESS. THIS CONTENTION IS BASED UPON THE FACT THAT YOUR FIRM, AT ITS OWN EXPENSE, MADE REFINEMENT FEATURES GIVING THE ITEM MORE UNIVERSALITY WHICH RESULTED IN ITS ADOPTION FOR USE BY THE GOVERNMENT BECAUSE OF ITS FUNCTIONAL SUPERIORITY AND THE SUBSTANTIAL SAVINGS INCURRED.

IN THIS CONNECTION, REGARDING A PARTIAL SMALL BUSINESS SET-ASIDE FOR THIS PROCUREMENT, THE RECORD SHOWS THAT THE CONTRACTING OFFICER DETERMINED THE QUANTITY OF 375 ITEMS TO BE PROCURED WAS NOT SEVERABLE INTO TWO OR MORE ECONOMIC PRODUCTION RUNS OR REASONABLE LOTS, AS PROVIDED UNDER THE FEDERAL PROCUREMENT REGULATIONS (FPR), 1-1.706.6 (2). FURTHER, THE CONTRACTING OFFICER REASONED THAT INASMUCH AS THERE WAS ONLY ONE SMALL BUSINESS CONCERN ON THE QPL THE PRACTICAL EFFECT OF A PARTIAL SET-ASIDE WOULD BE THE AWARD OF A CONTRACT ON THE SET-ASIDE PORTION WITHOUT EFFECTIVE COMPETITION, SUBJECT ONLY TO THE 120 PERCENT LIMITATION OF THE PARTIAL SET -ASIDE CLAUSE AS SET FORTH IN FPR 1-1. 706.6 (C). B-157581, NOVEMBER 22, 1965.

OUR OFFICE HAS CONSISTENTLY RECOGNIZED THE ESTABLISHED POLICY THAT A FAIR PROPORTION OF PURCHASES OF SUPPLIES AND SERVICES BE PLACED WITH SMALL BUSINESS CONCERNS, WHICH IS IN KEEPING WITH THE NATIONAL POLICY AND THE SMALL BUSINESS ACT (15 U.S.C. 631 ET SEQ.) AS IMPLEMENTED BY FPR 1-1.706. THE DECISION, HOWEVER, AS TO WHETHER A CERTAIN PROCUREMENT SHOULD BE SET ASIDE IN WHOLE OR IN PART FOR SMALL BUSINESS CONCERNS IS WITHIN THE PROVINCE OF THE ADMINISTRATIVE AGENCY. NEITHER THE PROVISIONS CONTAINED IN THE FPR NOR THE PROVISIONS OF THE SMALL BUSINESS ACT MAKE IT MANDATORY THAT THERE BE SET ASIDE FOR SMALL BUSINESS ANY PARTICULAR PROCUREMENT. COMP. GEN. 657, 45 ID. 228, 41 ID. 351.

IN THIS INSTANCE, WE BELIEVE THE CONTRACTING OFFICER ACTED IN GOOD FAITH AND EXERCISED SOUND JUDGMENT IN FOLLOWING COMPETITIVE PROCUREMENT PRACTICES WHEN HERETOFORE ONLY SOLE SOURCE PROCUREMENT WAS AVAILABLE.

ACCORDINGLY, THE PROTEST MADE TO OUR OFFICE IN THE MATTER MUST BE, AND IS, DENIED.