B-165260, NOV. 4, 1968

B-165260, NOV. 4, 1968

TO BOWDITCH, GOWETZ AND LANE:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 21, 1968, WITH ENCLOSURES, AND PRIOR CORRESPONDENCE, ON BEHALF OF PLAS-TECH EQUIPMENT CORPORATION, PROTESTING THE AWARD OF A CONTRACT TO THE H.G. GRAFF COMPANY UNDER INVITATION FOR BIDS NO. DAAF07-67-B-0208, ISSUED BY WATERVLIET ARSENAL, DEPARTMENT OF THE ARMY. YOU CONTEND THAT THE H.G. GRAFF COMPANY IS INELIGIBLE FOR AWARD BECAUSE IT IS NOT A MANUFACTURER OR A REGULAR DEALER UNDER THE WALSH-HEALEY PUBLIC CONTRACTS ACT, AS AMENDED, 41 U.S.C. 35-45. YOU ALSO ADVISE THAT THE GRAFF COMPANY DOES NOT QUALIFY AS A MACHINE TOOL DEALER IN THE EQUIPMENT TO BE SUPPLIED AND THAT THE DECISION TO THE CONTRARY BY THE ADMINISTRATOR OF THE WAGE AND HOUR AND PUBLIC CONTRACTS DIVISION, DEPARTMENT OF LABOR, IS ERRONEOUS.

THE CONTRACTING OFFICER HAS REPORTED THAT ON DECEMBER 27, 1967, PRIOR TO AWARD, A PROTEST WAS RECEIVED FROM THE PLAS-TECH EQUIPMENT CORPORATION CONCERNING H.G. GRAFF COMPANY'S ELIGIBILITY FOR AWARD AS A REGULAR DEALER WITHIN THE MEANING OF THE WALSH-HEALEY PUBLIC CONTRACTS ACT. A PREAWARD SURVEY OF THE LOW BIDDER WAS REQUESTED FROM DCASR, BOSTON, WHICH WAS ALSO REQUESTED TO FURNISH A DETERMINATION AS TO THE ELIGIBILITY OF THE LOW BIDDER AS A REGULAR DEALER. IN A PREAWARD SURVEY REPORT DATED JANUARY 19, 1968, COMPLETE AWARD WAS RECOMMENDED. AFTER COMPLETE LEGAL REVIEW OF THE ELIGIBILITY OF GRAFF UNDER THE WALSH-HEALEY ACT, THE CONTRACTING OFFICER DETERMINED THAT GRAFF IS A REGULAR DEALER (MACHINE TOOL DEALER) WITHIN THE MEANING OF THE ACT.

THE RECORD CONTAINS A LETTER DATED JULY 17, 1968, TO THE DEPARTMENT OF THE ARMY FROM THE ADMINISTRATOR OF THE WAGE AND HOUR AND PUBLIC CONTRACTS DIVISION, DEPARTMENT OF LABOR, WHICH READS, IN PERTINENT PART, AS FOLLOWS:

"THE CONTRACTING OFFICER HAS MADE AN INITIAL DETERMINATION THAT THE H.G. GRAFF COMPANY MEETS THE REQUIREMENTS OF A REGULAR DEALER UNDER THE ALTERNATE DEFINITION FOR MACHINE TOOL DEALER CONTAINED IN SECTION 50- 201.101 (B) (2) OF 41 CFR 50-201, AND THUS IS ELIGIBLE FOR AWARD OF THE CONTRACT UNDER THE ABOVE INVITATION FOR BIDS. QUALIFICATION OF A DEALER UNDER THE ALTERNATE DEFINITION FOR MACHINE TOOL DEALER DOES NOT ORDINARILY CONVEY ELIGIBILITY FOR AWARD OF CONTRACTS FOR OTHER THAN MACHINE TOOLS. HOWEVER, THE MANUFACTURE AND MARKETING OF TESTING MACHINES IS CONSIDERED ANALOGOUS TO THAT FOR MACHINE TOOLS. ACCORDINGLY, UNDER THE FACTS AND CIRCUMSTANCES, WE DO NOT TAKE EXCEPTION TO THE CONTRACTING OFFICER'S DETERMINATION AND WILL NOT QUESTION AN AWARD MADE ON THE LOW BID PRESENTED BY THE H.G. GRAFF COMPANY.'

THE WALSH-HEALEY ACT 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 OR REGULAR DEALER IN SUCH SUPPLIES AND THAT ANY BREACH OF SUCH STIPULATIONS SHALL CONSTITUTE GROUNDS FOR CANCELLATION OF THE CONTRACT. THE ACT FURTHER PROVIDES THAT THE SECRETARY OF LABOR SHALL HAVE AUTHORITY TO ADMINISTER THE PROVISIONS OF THE ACT AND TO MAKE SUCH RULES AND REGULATIONS AS MAY BE NECESSARY TO THAT END.

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.'

OUR OFFICE DOES NOT HAVE JURISDICTION TO REVIEW DETERMINATIONS AS TO WHETHER PARTICULAR FIRMS ARE REGULAR DEALERS OR MANUFACTURERS. B 161933, OCTOBER 20, 1967; B-162841, JANUARY 16, 1968. AS WE STATED ABOVE, THE DEPARTMENT OF LABOR HAS SUSTAINED THE CONTRACTING OFFICER'S DETERMINATION IN THIS INSTANCE.

IN VIEW OF THE FOREGOING, THERE IS NO BASIS UPON WHICH OUR OFFICE MAY PROPERLY DISTURB THE CONTRACT AWARDED TO THE H.G. GRAFF COMPANY. IF YOU HAVE ANY FURTHER INQUIRIES IN THIS MATTER, IT IS SUGGESTED THAT THEY BE ADDRESSED TO THE DEPARTMENT OF LABOR.