B-164773, JUL. 30, 1968

B-164773: Jul 30, 1968

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

THE PROCUREMENT WAS DESIGNATED AS A TOTAL SMALL- BUSINESS SET-ASIDE. A DECISION OF SBA REGARDING THE SIZE STATUS OF A PARTICULAR BIDDER IS CONCLUSIVE UPON THE PROCUREMENT AGENCY INVOLVED. 46 COMP. THE VALIDITY OF THE CRITERIA USED BY SBA IN RENDERING ITS DETERMINATION THAT UNITEC IS A LARGE BUSINESS CONCERN. YOU CONTEND THAT THE BEST INTERESTS OF THE GOVERNMENT ARE NOT BEING SERVED IN MAKING A SMALL BUSINESS SET ASIDE OF A PROCUREMENT. THE EFFECTIVE RESULT OF WHICH IS TO RESTRICT THE COMPETITION TO THE THREE REMAINING ELIGIBLE BIDDERS. YOU OBSERVE THAT THE THREE BIDDERS ARE COMMUNICATIONS ENGINEERING WITH A BID OF $667. IS THE ONLY OTHER BIDDER WHICH QUOTED A REASONABLE PRICE FOR THE REQUIRED SERVICES.

B-164773, JUL. 30, 1968

TO UNITEC INDUSTRIES, INC.:

WE ACKNOWLEDGE RECEIPT OF YOUR TELEGRAM OF JULY 3, 1968, AND LETTER DATED JULY 9, 1968, WITH ENCLOSURE. YOU REQUEST THAT OUR OFFICE REVIEW A DECISION RENDERED ON JUNE 28, 1968, BY THE SIZE APPEALS BOARD, SMALL BUSINESS ADMINISTRATION (SBA), WHICH DETERMINED THAT YOUR FIRM DID NOT QUALIFY AS A SMALL-BUSINESS CONCERN UNDER INVITATION FOR BIDS NO. F04606- 68-B-0364, ISSUED BY THE SACRAMENTO AIR MATERIEL AREA, MCCLELLAN AIR FORCE BASE, CALIFORNIA. THE PROCUREMENT WAS DESIGNATED AS A TOTAL SMALL- BUSINESS SET-ASIDE.

UNDER 15 U.S.C. 637 (B) (6), A DECISION OF SBA REGARDING THE SIZE STATUS OF A PARTICULAR BIDDER IS CONCLUSIVE UPON THE PROCUREMENT AGENCY INVOLVED. 46 COMP. GEN. 898, 900; 44 ID. 271, 273. MOREOVER, AS WE STATED IN B-150757, APRIL 8, 1963: "NEITHER OUR OFFICE NOR ANY EXECUTIVE AGENCY OF THE GOVERNMENT MAY IGNORE A DETERMINATION BY SBA AS TO THE SIZE STATUS OF A PARTICULAR CONCERN * * *.' CF. AMERICAN ELECTRIC COMPANY, LTD., V UNITED STATES, 270 F.SUPP. 689 (1967); SPRINGFIELD WHITE CASTLE COMPANY V EUGENE P. FOLEY, 230 F.SUPP. 77 (1964). HENCE, OUR OFFICE MAY NOT QUESTION, ON THE BASIS OF THE PRESENT RECORD, THE VALIDITY OF THE CRITERIA USED BY SBA IN RENDERING ITS DETERMINATION THAT UNITEC IS A LARGE BUSINESS CONCERN.

IN YOUR LETTER OF JULY 9, YOU CONTEND THAT THE BEST INTERESTS OF THE GOVERNMENT ARE NOT BEING SERVED IN MAKING A SMALL BUSINESS SET ASIDE OF A PROCUREMENT, THE EFFECTIVE RESULT OF WHICH IS TO RESTRICT THE COMPETITION TO THE THREE REMAINING ELIGIBLE BIDDERS. YOU OBSERVE THAT THE THREE BIDDERS ARE COMMUNICATIONS ENGINEERING WITH A BID OF $667,350, OR APPROXIMATELY TWO AND ONE-HALF TIMES THE BID OF YOUR FIRM; ESSCO WITH A BID OF $429,680, OR APPROXIMATELY ONE AND ONE-HALF TIMES THE BID OF YOUR CONCERN; AND CENTURY, INC., WHICH BID APPROXIMATELY $15,000 MORE THAN YOUR FIRM. YOU POINT OUT THAT OTHER THAN YOUR FIRM, CENTURY, INC., IS THE ONLY OTHER BIDDER WHICH QUOTED A REASONABLE PRICE FOR THE REQUIRED SERVICES.

SECTION 15 OF THE SMALL BUSINESS ACT, 15 U.S.C. 644, PROVIDES THAT SMALL BUSINESS CONCERNS SHALL RECEIVE ANY AWARD OR CONTRACT OR ANY PART THEREOF AS TO WHICH IT IS DETERMINED TO BE IN THE INTEREST OF ASSURING THAT A FAIR PROPORTION OF THE TOTAL PURCHASES AND CONTRACTS FOR PROPERTY AND SERVICES FOR THE GOVERNMENT ARE PLACED WITH SMALL BUSINESS CONCERNS. UNDER SECTION 15 OF THE ACT, THE DETERMINATION AS TO WHETHER A PARTICULAR PROCUREMENT SHOULD BE SET ASIDE FOR SMALL BUSINESS IS ORDINARILY WITHIN THE JURISDICTION OF THE PROCURING AGENCY. SEE ASPR 1-706.1 (A). WITH RESPECT TO TOTAL SET-ASIDES, ASPR 1-706.5 PROVIDES IN PERTINENT PART AS FOLLOWS:

"1-706.5 TOTAL SET-ASIDES

(A) (1) SUBJECT TO ANY APPLICABLE PREFERENCE FOR LABOR SURPLUS AREA SET- ASIDES AS PROVIDED IN 1-803 (A) (II), THE ENTIRE AMOUNT OF AN INDIVIDUAL PROCUREMENT OR A CLASS OF PROCUREMENTS, INCLUDING BUT NOT LIMITED TO CONTRACTS FOR MAINTENANCE, REPAIR, AND CONSTRUCTION, SHALL BE SET ASIDE FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION (SEE 1-701.1) IF THE CONTRACTING OFFICER DETERMINES THAT THERE IS REASONABLE EXPECTATION THAT BIDS OR PROPOSALS WILL BE OBTAINED FROM A SUFFICIENT NUMBER OF RESPONSIBLE SMALL BUSINESS CONCERNS SO THAT AWARDS WILL BE MADE AT REASONABLE PRICES. TOTAL SET-ASIDES SHALL NOT BE MADE UNLESS SUCH A REASONABLE EXPECTATION EXISTS. * * *"

OUR OFFICE HAS HELD THAT THE DETERMINATION AS TO WHETHER SUCH A REASONABLE EXPECTATION EXISTS IS WITHIN THE AMBIT OF SOUND ADMINISTRATIVE DISCRETION, AND WE WILL NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICER IN THE ABSENCE OF A CLEAR SHOWING OF ABUSE OF THE DISCRETION PERMITTED HIM. 45 COMP. GEN. 228. ALSO, WE HAVE STATED THAT THE FACT THAT LOWER BIDS MAY BE EXPECTED FROM LARGE BUSINESS CONCERNS IS NOT A SIGNIFICANT FACTOR IN DETERMINING WHETHER A PROCUREMENT SHOULD BE SET ASIDE FOR SMALL BUSINESS PARTICIPATION ONLY. 43 COMP. GEN. 497. THE PRESENT CASE, THE FACTS WHICH WERE CONSIDERED BY THE CONTRACTING OFFICER APPEAR TO JUSTIFY HIM IN CONCLUDING THAT HE WOULD RECEIVE A SUFFICIENT NUMBER OF BIDS TO ASSURE A REASONABLE PRICE, AND SINCE IT APPEARS THAT THE LOWEST BID RECEIVED WAS FOUND TO BE REASONABLE, WE CANNOT CONCLUDE THAT THE PROPOSED AWARD IS LEGALLY OBJECTIONABLE BY REASON OF THE SMALL BUSINESS SET ASIDE.

YOUR LAST CONTENTION IS THAT THE PROCURING AGENCY MAY NOT MAKE AN AWARD UNDER THE SUBJECT INVITATION FOR BIDS BECAUSE THE DEPARTMENT OF LABOR'S WAGE RATE DETERMINATION HAS EXPIRED. IN SUPPORT OF SUCH CONTENTION, YOU CITE 41 COMP. GEN. 593, AND B-162728, JANUARY 26, 1968. IN THE CITED DECISIONS, OUR OFFICE HELD THAT AN AWARD UNDER AN INVITATION CONTAINING EXPIRED DAVIS-BACON ACT WAGE DETERMINATIONS VIOLATES THE RULES OF COMPETITIVE BIDDING AND THAT BIDS RECEIVED UNDER THE INVITATION SHOULD BE REJECTED AND THE PROCUREMENT READVERTISED. HOWEVER, THOSE DECISIONS ARE DISTINGUISHABLE FROM THE CASE HERE. IN B 162728, THE SOLICITOR OF LABOR ADVISED THE PROCURING AGENCY THAT WAGE RATE DETERMINATIONS WOULD NOT BE EXTENDED. IN 41 COMP. GEN. 593, THE SECRETARY OF LABOR DETERMINED THAT THE WAGE RATES INCLUDED IN THAT INVITATION SHOULD BE DELETED SINCE MORE THAN 90 DAYS HAD ELAPSED WITHOUT AWARD FROM THE TIME THE WAGE RATES WERE ISSUED. HERE, THE WAGE RATES EXPIRED IN JULY 1968 AND WE HAVE ADVICE THAT THE WAGE RATES WILL BE EXTENDED. IN OTHER WORDS, WHILE THE WAGE RATE DETERMINATION IN THE INVITATION HAS EXPIRED, THE PROCURING AGENCY HAS REQUESTED THE DEPARTMENT OF LABOR TO GRANT AN EXTENSION OF THE WAGE RATE DETERMINATION, AND IT IS REPORTED THAT THE SOLICITOR OF LABOR WILL GRANT THE AGENCY'S REQUEST AFTER OUR OFFICE HAS RENDERED A DECISION ON YOUR PROTEST. IN THAT CONNECTION, WE HELD IN OUR DECISION OF DECEMBER 8, 1967, B-162944, TO THE ADMINISTRATOR, VETERANS ADMINISTRATION, THAT EVEN THOUGH THE STATED EFFECTIVE PERIOD OF A WAGE DETERMINATION HAS LAPSED, THERE WOULD BE NO OBJECTION BY OUR OFFICE TO ITS BEING INCLUDED IN A CONTRACT AWARDED UNDER THE INVITATION PROVIDED THE BID HAD NOT EXPIRED AND AN EXTENSION THEREOF IS PROPERLY REQUESTED AND GRANTED BY THE DEPARTMENT OF LABOR. COMPARE, IN THIS REGARD, 45 COMP. GEN. 325 WHERE WE HELD, QUOTING THE SYLLABUS: "THE REJECTION OF ALL BIDS FOR THE CONSTRUCTION OF A TRANSMISSION LINE AND READVERTISING THE SPECIFICATIONS TO INCLUDE, PURSUANT TO THE DAVIS-BACON ACT, 40 U.S.C. 276A, THE MODIFIED WAGE RATES OF A NEW DETERMINATION CONTAINING RATES IDENTICAL TO THE EXPIRED WAGE RATES INCORPORATED IN THE INITIAL SPECIFICATIONS -- A CONTRACT AWARD HAVING BEEN DELAYED TO SECURE A CERTIFICATE OF COMPETENCY ON THE LOW BIDDER -- WAS JUSTIFIED ABSENT A REQUEST TO AND GRANT BY THE SECRETARY OF LABOR FOR THE EXTENSION OF THE EXPIRED WAGE RATE DETERMINATION IN ACCORDANCE WITH DEPARTMENT OF LABOR REGULATIONS INCREASING THE EFFECTIVENESS OF WAGE RATE DETERMINATIONS AND ESTABLISHING PROCEDURE FOR THE EXTENSION OF A DETERMINATION AFTER EXPIRATION, AND THE AUTOMATIC ISSUANCE OF A NEW WAGE RATE DETERMINATION EMBODYING WAGES IDENTICAL TO THE EXPIRED RATES THAT HAD BEEN INCLUDED IN THE INITIALLY ADVERTISED SPECIFICATIONS, HAVING NEITHER REVIVED NOR EXTENDED THE EXPIRED WAGE RATES, AN AWARD ON THE BASIS OF SPECIFICATIONS INCORPORATING THOSE RATES WOULD BE IMPROPER.' ACCORDINGLY, YOUR PROTEST IS DENIED.