B-166355, APR. 23, 1969

B-166355: Apr 23, 1969

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INC.: REFERENCE IS MADE TO YOUR TELEGRAM OF MARCH 7. FOUR BIDS WERE RECEIVED IN RESPONSE TO THE SOLICITATION AND OPENED ON MARCH 5. J. BROOKS) WAS THE APPARENT LOW BIDDER. WAS A TRUSTEE OF RUTGERS UNIVERSITY AND WAS ALSO PRESIDENT AND DIRECTOR OF THE KATE-MACY LADD FUND. J. BROOKS ADVISED THAT IT HAD A TOTAL OF 97 EMPLOYEES AND THAT IT WAS A SOLELY OWNED CORPORATION. WAS 97 PERSONS. SBA IS AUTHORIZED TO DETERMINE WHICH FIRMS WITHIN ANY INDUSTRY ARE TO BE DESIGNATED AS SMALL BUSINESS CONCERNS FOR PURPOSES OF GOVERNMENT PROCUREMENT. THIS PROVISION OF LAW FURTHER STATES THAT "OFFICES OF THE GOVERNMENT HAVING PROCUREMENT OR LENDING POWERS * * * SHALL ACCEPT AS CONCLUSIVE THE ADMINISTRATION'S DETERMINATION AS TO WHICH ENTERPRISES ARE TO BE DESIGNATED -SMALL BUSINESS CONCERNS-.

B-166355, APR. 23, 1969

TO CONCEPT INDUSTRIES, INC.:

REFERENCE IS MADE TO YOUR TELEGRAM OF MARCH 7, 1969, AND SUPPLEMENTARY LETTER DATED MARCH 10, 1969, ADDRESSED TO THE POST OFFICE DEPARTMENT, PROTESTING AGAINST AWARD OF A CONTRACT TO ANOTHER FIRM UNDER SOLICITATION 1255, ISSUED BY THE POST OFFICE DEPARTMENT.

THE ABOVE SOLICITATION, ISSUED FEBRUARY 12, 1969, SOLICITED BIDS UNDER A 100 PERCENT SMALL-BUSINESS SET-ASIDE FOR A QUANTITY OF AIR MAIL METAL SEALS. FOUR BIDS WERE RECEIVED IN RESPONSE TO THE SOLICITATION AND OPENED ON MARCH 5, 1969. E.J. BROOKS COMPANY (E. J. BROOKS) WAS THE APPARENT LOW BIDDER.

BY YOUR TELEGRAM OF MARCH 7 AND FOLLOW-UP LETTER OF MARCH 10, YOU QUESTIONED THE SMALL BUSINESS STATUS OF E. J. BROOKS. YOU STATED THAT MR. LESLIE MCDOUALL, A DIRECTOR AND VICE CHAIRMAN OF THE BOARD OF E. J. BROOKS, WAS A TRUSTEE OF RUTGERS UNIVERSITY AND WAS ALSO PRESIDENT AND DIRECTOR OF THE KATE-MACY LADD FUND, WHICH HAS NET ASSETS OF $76 MILLION, WHICH COULD BE USED TO FINANCE AND CONTROL OTHER BUSINESS ENTITIES, PRESUMABLY E. J. BROOKS. YOU FURTHER STATE THAT BECAUSE OF INTERLOCKING DIRECTORSHIPS, E. J. BROOKS MUST BE CONSIDERED AN AFFILIATE OF THE ABOVE MENTIONED CONCERNS.

ON MARCH 7, THE POST OFFICE DEPARTMENT NOTIFIED E. J. BROOKS THAT ITS STATUS AS A SMALL BUSINESS HAD BEEN CHALLENGED AND REQUESTED THAT THE COMPANY FURNISH ADDITIONAL INFORMATION CONCERNING TOTAL NUMBER OF ITS EMPLOYEES, INCLUDING PARENT COMPANY AND AFFILIATES. BY TELEGRAM OF MARCH 10, E. J. BROOKS ADVISED THAT IT HAD A TOTAL OF 97 EMPLOYEES AND THAT IT WAS A SOLELY OWNED CORPORATION.

ON MARCH 10, THE POST OFFICE DEPARTMENT REQUESTED THE SMALL BUSINESS ADMINISTRATION (SBA) TO MAKE A SIZE DETERMINATION OF E.J. BROOKS COMPANY. BY LETTER OF MARCH 24, SBA NOTIFIED THE POST OFFICE DEPARTMENT THAT MR. MCDOUALL, EMPLOYED BY E. J. BROOKS AS AN ADVISOR TO THE PRESIDENT ONLY OWNED ONE (1) SHARE OF STOCK AND THAT MR. WINFRED N. BROOKS AND MRS. MARCIELA BROOKS OWNED 94.4 PERCENT OF THE VOTING STOCK. BASED ON THIS INFORMATION SBA FOUND THAT MR. MCDOUALL'S OUTSIDE INTEREST WITH RUTGERS UNIVERSITY AND KATE MACY LADD FUND DID NOT CONSTITUTE AN AFFILIATION WITH E. J. BROOKS FOR THE PURPOSE OF GOVERNMENT PROCUREMENTS. THE LETTER FURTHER STATED THAT E. J. BROOKS' AVERAGE EMPLOYMENT FOR THE LAST FOUR QUARTERS ENDING DECEMBER 31, 1968, WAS 97 PERSONS, THE SIZE STANDARD BEING 500 EMPLOYEES. ON THE BASIS OF THE ABOVE INFORMATION SBA DETERMINED THAT E. J. BROOKS QUALIFIED AS A SMALL BUSINESS CONCERN.

UNDER 15 U.S.C. 637 (B) (6), SBA IS AUTHORIZED TO DETERMINE WHICH FIRMS WITHIN ANY INDUSTRY ARE TO BE DESIGNATED AS SMALL BUSINESS CONCERNS FOR PURPOSES OF GOVERNMENT PROCUREMENT. THIS PROVISION OF LAW FURTHER STATES THAT "OFFICES OF THE GOVERNMENT HAVING PROCUREMENT OR LENDING POWERS * * * SHALL ACCEPT AS CONCLUSIVE THE ADMINISTRATION'S DETERMINATION AS TO WHICH ENTERPRISES ARE TO BE DESIGNATED -SMALL BUSINESS CONCERNS-, AS AUTHORIZED AND DIRECTED UNDER THIS PARAGRAPH.' 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. 46 COMP. GEN. 898; B-152942, JANUARY 28, 1964; B-150757, APRIL 8, 1963; B-164796, JULY 18, 1968.