B-164686, AUG. 8, 1968

B-164686, AUG. 8, 1968

TO R. FRODGE, INC.:

REFERENCE IS MADE TO YOUR LETTERS OF JUNE 24 AND JULY 23, 1968, WITH ENCLOSURES, PROTESTING AGAINST THE REJECTION OF YOUR LOW BID AND THE AWARDS MADE TO OTHER BIDDERS UNDER SOLICITATIONS NOS. 1233, 1235, 1238, 1242, 1249, 1260, 1280, AND 1291 ISSUED BY THE POST OFFICE DEPARTMENT FOR MECHANIZATION MODIFICATION AND/OR INSTALLATIONS IN A NUMBER OF POST OFFICE BUILDINGS.

YOUR BIDS WERE REJECTED BECAUSE THE CONTRACTING OFFICER DETERMINED THAT YOU DO NOT QUALIFY AS A REGULAR DEALER OR MANUFACTURER UNDER THE WALSH- HEALEY ACT, 41 U.S.C. 35 ET SEQ. THE BASIS FOR THIS DETERMINATION WAS THE FACT THAT YOU DO NOT HAVE ANY MANUFACTURING FACILITIES AND DO NOT STOCK INVENTORIES OF THE SUPPLIES OFFERED. YOU DO NOT DISPUTE THE FINDING OF FACT, ABOVE, WHICH CONSTITUTES THE BASIS FOR THE ADVERSE DETERMINATION, BUT CONTEND THAT SINCE YOU INTEND TO ASSEMBLE AND INSTALL THE MACHINERY AT THE SITE, YOU MUST BE CONSIDERED A MANUFACTURER.

THE WALSH-HEALEY ACT PROVIDES, IN PART, THAT CONTRACTS ENTERED INTO BY ANY GOVERNMENT AGENCY FOR THE MANUFACTURE OR FURNISHING OF SUPPLIES EXCEEDING $10,000 IN AMOUNT SHALL CONTAIN A STIPULATION THAT THE CONTRACTOR IS THE MANUFACTURER OF, OR A REGULAR DEALER IN, SUCH SUPPLIES; THAT ANY BREACH OF SUCH STIPULATION SHALL RENDER THE CONTRACTOR LIABLE FOR LIQUIDATED DAMAGES AND CONSTITUTE GROUNDS FOR CANCELLATION OF THE CONTRACT AND PROCUREMENT OF THE SUPPLIES AT THE COST OF THE CONTRACTOR; AND THAT THE SECRETARY OF LABOR SHALL HAVE AUTHORITY TO ADMINISTER THE PROVISION OF THE ACT AND TO MAKE SUCH RULES AND REGULATIONS AS MAY BE NECESSARY.

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

"/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.'

THE RECORD INDICATES THAT THE DEPARTMENT OF LABOR IS PRESENTLY CONSIDERING YOUR PROTEST AGAINST THE CONTRACTING OFFICER'S DECISION, AND THIS OFFICE HAS CONSISTENTLY TAKEN THE POSITION THAT IT IS BOTH NECESSARY AND PROPER FOR AN AGGRIEVED BIDDER TO FOLLOW SUCH PROCEDURE.

IN VIEW OF THE FOREGOING, NO FURTHER ACTION ON YOUR PROTEST IS CONTEMPLATED BY OUR OFFICE AT THE PRESENT TIME.