B-165790, APR. 17, 1969

B-165790: Apr 17, 1969

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INC.: REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 10. THE INVITATION FOR PROCUREMENT OF FSC CLASS 4110 MECHANICALLY COOLED DRINKING WATER DISPENSERS ON A REQUIREMENT BASIS WAS ISSUED MAY 7. BIDS WERE OPENED ON JUNE 5. IT WAS DETERMINED THAT YOUR COMPANY WAS THE LOW BIDDER ON TYPE II WATER COOLERS. UNDER ITEMS 11 THROUGH 18 ON THE UNRESTRICTED PORTION AND WAS ENTITLED TO FIRST PRIORITY ON NEGOTIATION OF THE SET ASIDE PORTION ON ITEMS 1A THROUGH 28A. AWARDS OF ITEM 11 THROUGH 16 AND ITEM 18 UNDER THE UNRESTRICTED PORTION WERE MADE TO YOU AS WELL AS ITEMS 11A THROUGH 16A AND 18A OF THE SET-ASIDE PORTION. 19A AND 20A TO THE ONLY OTHER SMALL BUSINESS BIDDER ON THE GROUND THAT IT WAS UNFAIR TO LIMIT ORDERS ON THE SET-ASIDE PORTION TO THE BIDDER'S STATED MONTHLY SUPPLY POTENTIAL.

B-165790, APR. 17, 1969

TO HEAT EXCHANGERS, INC.:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 10, 1968, IN WHICH YOU PROTEST THE AWARD OF THE SMALL BUSINESS SET-ASIDE PORTION OF INVITATION FPNME-A-70208-A-6-5-68 ISSUED BY THE GENERAL SERVICES ADMINISTRATION.

THE INVITATION FOR PROCUREMENT OF FSC CLASS 4110 MECHANICALLY COOLED DRINKING WATER DISPENSERS ON A REQUIREMENT BASIS WAS ISSUED MAY 7, 1968. THE INVITATION CONTAINED A NOTICE OF SMALL BUSINESS SET-ASIDE APPLICABLE TO ITEMS 1A THROUGH 40A. BIDS WERE OPENED ON JUNE 5, 1968, AND IT WAS DETERMINED THAT YOUR COMPANY WAS THE LOW BIDDER ON TYPE II WATER COOLERS, SIZE 10, UNDER ITEMS 11 THROUGH 18 ON THE UNRESTRICTED PORTION AND WAS ENTITLED TO FIRST PRIORITY ON NEGOTIATION OF THE SET ASIDE PORTION ON ITEMS 1A THROUGH 28A. ITEMS 11A THROUGH 20A CONSISTED OF TYPE II WATER COOLERS, SIZE 10, FOR WHICH YOUR COMPANY LISTED ON PAGE 9 OF THE INVITATION AS TO THIS TYPE A MONTHLY SUPPLY POTENTIAL OF 100. IN VIEW OF YOUR STATED MONTHLY SUPPLY POTENTIAL OF 100, AWARDS OF ITEM 11 THROUGH 16 AND ITEM 18 UNDER THE UNRESTRICTED PORTION WERE MADE TO YOU AS WELL AS ITEMS 11A THROUGH 16A AND 18A OF THE SET-ASIDE PORTION. THESE AWARDS TOTALED 100 UNITS ON EACH PORTION (SET-ASIDE AND NON-SET-ASIDE).

YOUR COMPANY PROTESTS THE AWARDS OF ITEMS 17A, 19A AND 20A TO THE ONLY OTHER SMALL BUSINESS BIDDER ON THE GROUND THAT IT WAS UNFAIR TO LIMIT ORDERS ON THE SET-ASIDE PORTION TO THE BIDDER'S STATED MONTHLY SUPPLY POTENTIAL. IT IS YOUR CONTENTION THAT THE SET-ASIDE PORTION WAS A SEPARATE NEGOTIATION AND THAT BEFORE AWARD ON THAT PORTION THE PROCUREMENT AGENCY WAS INFORMED OF YOUR COMPANY'S INCREASED PRODUCTION CAPABILITY.

PARAGRAPH 4 ON PAGE 8 OF THE INVITATION TITLED "MONTHLY SUPPLY POTENTIAL" PROVIDED IN PERTINENT PART: "* * * IN ORDER TO PRECLUDE THE PLACEMENT OF ORDERS WITH ANY CONTRACTOR IN EXCESS OF HIS PRODUCTION CAPACITY, BIDDERS ARE REQUESTED TO INDICATE, IN THE SPACES PROVIDED, THE TOTAL QUANTITY PER MONTH WHICH THEY ARE WILLING TO FURNISH OF ANY ITEM OR GROUP OF ITEMS INVOLVING THE USE OF THE SAME PRODUCTION FACILITIES. * * *" PARAGRAPH 5, PAGE 10 OF THE INVITATION, TITLED "METHOD OF AWARD" STATED:

"/A) AWARDS WILL BE MADE ITEM-BY-ITEM ON THE BASIS OF THE GOVERNMENT'S ESTIMATED PEAK MONTHLY REQUIREMENTS TO THE LOW RESPONSIVE BIDDERS UP TO THEIR STATED MONTHLY SUPPLY POTENTIALS. * * * IN ORDER TO QUALIFY FOR AN AWARD, A BIDDER MUST OFFER A MONTHLY SUPPLY POTENTIAL TO COVER THE GOVERNMENT'S ESTIMATED PEAK MONTHLY REQUIREMENT ON AT LEAST ONE ITEM. INDIVIDUAL ITEM QUANTITIES WILL NOT BE SUBDIVIDED FOR AWARD PURPOSES.' FINALLY, THE INVITATION PROVIDED AT PAGE 22 THAT "THE SMALL BUSINESS SET- ASIDE PORTION IS IDENTICAL TO THE NON-SET-ASIDE (UNRESTRICTED) PORTION IN ALL RESPECTS, I.E., ITEMS, QUANTITY, ESTIMATED PEAK MONTHLY REQUIREMENTS, ETC.'

THESE PROVISIONS MAKE IT ABUNDANTLY CLEAR THAT THE BIDDER'S STATED MONTHLY SUPPLY POTENTIAL WAS APPLICABLE TO THE SET-ASIDE PORTION AS WELL AS TO THE NON-SET-ASIDE PORTION. THE FACT THAT THE SET-ASIDE PORTION WAS NEGOTIATED DID NOT RELIEVE A BIDDER FROM A MANDATORY INVITATION REQUIREMENT TO FURNISH INFORMATION DETERMINED NECESSARY BY THE GOVERNMENT FOR AWARD PURPOSES. 41 COMP. GEN. 417, 418. YOUR STATED MONTHLY SUPPLY POTENTIAL WAS AN INTEGRAL PART OF YOUR BID. IN 46 COMP. GEN. 856, 858, WE HELD THAT A PRODUCTION GUARANTEE WAS A SPECIFICATION REQUIREMENT WHICH DIRECTLY AFFECTED THE QUANTITY OF WORK TO BE DELIVERED TO THE GOVERNMENT. TO PERMIT A CHANGE IN THE STATED SUPPLY POTENTIAL AFTER BID OPENING WOULD BE TANTAMOUNT TO A NEW BID WHICH WOULD HAVE BEEN CONTRARY TO WELL- ESTABLISHED RULES OF FORMAL ADVERTISING. 31 COMP. GEN. 660, 661.

WITH REGARD TO YOUR CLAIM THAT SUNROC CORPORATION IS NOT SMALL BUSINESS AND THEREFORE WAS NOT ENTITLED TO AWARDS OF ITEMS 17A, 19A AND 20A, IT APPEARS THAT YOU DID NOT RAISE AN OBJECTION UNTIL FOUR MONTHS AFTER BID OPENING. SECTION 1-1.703-2 (B) OF THE FEDERAL PROCUREMENT REGULATIONS REQUIRES THAT A PROTEST REGARDING SMALL BUSINESS STATUS BE MADE BEFORE THE CLOSE OF BUSINESS ON THE FIFTH WORKING DAY AFTER BID OPENING. IN ANY EVENT, THE GENERAL SERVICES ADMINISTRATION IN ITS REPORT TO THIS OFFICE STATED THAT IT WAS INFORMALLY ADVISED BY THE SMALL BUSINESS ADMINISTRATION THAT SUNROC IS A SMALL BUSINESS CONCERN.

SINCE WE ARE OF THE OPINION THAT THE METHOD OF AWARD BASED ON THE BIDDER'S STATED MONTHLY PRODUCTION CAPABILITY APPLIED EQUALLY TO THE SET- ASIDE AND NON-SET-ASIDE PORTIONS OF THE INVITATION, THERE IS NO LEGAL BASIS TO OBJECT TO THE AWARDS OF ITEMS 17A, 19A AND 20A TO THE SUNROC CORPORATION.