B-166381, MAY 26, 1969

B-166381, MAY 26, 1969

TO DAYTON ELECTRONICS PRODUCTS COMPANY:

REFERENCE IS MADE TO YOUR TELEGRAM OF MARCH 10, 1969, PROTESTING AGAINST THE AWARD OF PART OF THE SET-ASIDE PORTION TO TELEDYNE ELECTRONICS DIVISION, TELEDYNE INDUSTRIES, INC. (TELEDYNE), UNDER INVITATION FOR BIDS NO. N00039-69-B-1004.

THE INVITATION IN QUESTION WAS ISSUED ON SEPTEMBER 3, 1968, BY THE NAVAL ELECTRONICS SYSTEMS COMMAND, MUNITIONS BUILDING, WASHINGTON, D.C. IT CALLED FOR BIDS ON A QUANTITY OF AN/SRC-20 AND AN/SRC-21 TRANSCEIVER EQUIPMENTS AND AN/URC-9 RADIO SETS AND ANNOUNCED THAT EQUAL QUANTITIES OF EACH ITEM WOULD BE AWARDED AS A SET-ASIDE FOR LABOR SURPLUS AREA CONCERNS. AS MODIFIED BY AMENDMENTS TO THE INVITATION, THE OPENING DATE WAS SET FOR OCTOBER 15, 1968.

BIDS WERE OPENED AS SCHEDULED. DAYTON ELECTRONICS PRODUCTS COMPANY (DEPCO) WAS FOUND TO HAVE CERTIFIED ITSELF BOTH AS A SMALL BUSINESS CONCERN AND AS A PERSISTENT LABOR SURPLUS AREA CONCERN. SUCH CERTIFICATION, IF TRUE, WOULD HAVE GIVEN DEPCO THE HIGHEST ORDER OF PRIORITY IN THE NEGOTIATION FOR THE SET-ASIDE PORTION OF THE PROCUREMENT, SINCE TELEDYNE MERELY CERTIFIED ITSELF AS A PERSISTENT LABOR SURPLUS AREA CONCERN. BOTH BIDDERS INDICATED A 60 CALENDAR DAY PERIOD FOR ACCEPTANCE.

AWARD OF THE NON-SET-ASIDE PORTION OF THE PROCUREMENT WAS MADE AS FOLLOWS: CONTRACTOR ITEM QUANTITY DESCRIPTION UNIT PRICE TOTAL PRICE TELEDYNE 1 23 AN/SRC-20 $8,000 $184,000 DEPCO 3 67 AN/SRC-21 4,725 316,575 DEPCO

5 25 AN/URC-9 3,650 91,250

YOU CONTEND THAT YOU SHOULD RECEIVE AN AWARD FOR THE ENTIRE SET ASIDE PORTION, BECAUSE TELEDYNE HAS CHOSEN NOT TO EXTEND ITS PERIOD OF ACCEPTANCE AND THAT UNDER SUCH CIRCUMSTANCES, THERE IS NO VALID BASIS OF OFFER AND ACCEPTANCE BETWEEN IT AND THE GOVERNMENT.

THE RECORD SHOWS THAT THE AWARD TO TELEDYNE WAS MADE ON DECEMBER 12, 1968, WHICH WAS 58 DAYS AFTER BID OPENING AND OBVIOUSLY WITHIN THE 60 DAY PERIOD FOR ACCEPTANCE OF AN AWARD OF THE NON-SET-ASIDE PORTION. YOUR FIRM EXTENDED ITS BID ON JANUARY 15, 1969, AND THE AWARD THERETO WAS MADE ON FEBRUARY 10, 1969.

THERE IS NO REQUIREMENT FOR THE ESTABLISHMENT OF A DEFINITE ACCEPTANCE PERIOD FOR THE NEGOTIATED AWARD OF A SET-ASIDE PORTION OF AN INVITATION. THE INVITATION PROVIDES, AS PRESCRIBED BY SECTION 1 804.2 (B) OF THE ARMED SERVICES PROCUREMENT REGULATION, THAT NEGOTIATIONS FOR THE SET-ASIDE PORTION WILL BE CONDUCTED WITH OTHERWISE ELIGIBLE CONCERNS IN THE ORDER OF THEIR BIDS ON THE NON-SET ASIDE PORTION, BEGINNING WITH THE LOWEST RESPONSIVE BID. THUS, THE GOVERNMENT BY INITIATING THE NEGOTIATIONS THEREUNDER, IN EFFECT, MAKES AN OFFER WHICH IS WITHIN THE POWER OF THE ELIGIBLE CONCERN TO ACCEPT OR REJECT WITHIN A REASONABLE TIME, IN CONTRAST TO THE PROCEDURE UNDER THE NON-SET-ASIDE PORTION WHERE THE BIDDER IS THE ONE MAKING THE OFFER AND STIPULATING THEREIN THE SPECIFIC PERIOD WITHIN WHICH THE OFFER, UNLESS EXTENDED, REMAINS OPEN FOR ACCEPTANCE BY THE GOVERNMENT. THE CONTRACT AWARDED FOR THE SET-ASIDE IS NOT EFFECTED BY ACCEPTANCE BY THE GOVERNMENT OF AN OFFER MADE BY A BIDDER, BUT BY THE ELIGIBLE BIDDER'S ACCEPTANCE OF THE GOVERNMENT'S OFFER. THE REQUEST MADE IN THIS INSTANCE FOR EXTENSION OF THE BID ACCEPTANCE TIME WAS THEREFORE UNNECESSARY AND UNJUSTIFIED, AND THE FAILURE OF TELEDYNE TO EXTEND WAS IMMATERIAL.

PURSUANT TO A TELEDYNE PROTEST THAT DEPCO WAS NOT A SMALL BUSINESS CONCERN, THE NAVAL ELECTRONIC SYSTEMS COMMAND REQUESTED THE SMALL BUSINESS ADMINISTRATION (SBA) TO MAKE A DETERMINATION OF THE SIZE STATUS OF DEPCO. ON MARCH 5, 1969, SBA NOTIFIED THE PROCURING ACTIVITY THAT DEPCO WAS NOT A SMALL BUSINESS CONCERN. UNDER SUCH CIRCUMSTANCES, DEPCO IS NOT ENTITLED TO THE PRIORITY OF A SMALL BUSINESS CONCERN IN THE NEGOTIATIONS FOR THE SET-ASIDE PORTION OF THE PROCUREMENT. SINCE BOTH DEPCO AND TELEDYNE ARE LARGE BUSINESSES, AND BOTH ARE CERTIFIED AS PERSISTENT LABOR SURPLUS AREA CONCERNS, NEITHER IS ENTITLED TO A HIGHER ORDER OF PRIORITY THAN THE OTHER IN THE NEGOTIATIONS IN QUESTION.

AS A MATTER OF INTEREST, THE NAVY REPORTS THAT ON FEBRUARY 13, 1969, REPRESENTATIVES OF TELEDYNE INDICATED PERSONALLY TO THE DIRECTOR OF CONTRACTS, NAVAL ELECTRONIC SYSTEMS COMMAND, IN HIS OFFICE IN WASHINGTON, D.C., OF THEIR CONTINUED INTEREST IN THE ITEM NO. 1 SET ASIDE PORTION. THIS CONTINUING INTEREST OF TELEDYNE WAS REITERATED IN A TELEPHONE CONVERSATION WITH THE DIRECTOR OF CONTRACTS ON APRIL 23, 1969, AND AGAIN REPEATED BY LETTER OF APRIL 24, 1969. IT IS REPORTED, MOREOVER, THAT TELEDYNE HAS BY NEGOTIATION AGREED TO A PRICE OF $8,000 EACH FOR THE 24 AN/SRC-20 TRANSCEIVERS THAT ARE ON THE SET-ASIDE PORTION OF THE INVITATION AND THAT DEPCO HAS BY NEGOTIATION AGREED TO A PRICE OF $4,725 EACH FOR 67 AN/SRC-21'S THAT THE NAVY PROPOSES TO MAKE AWARDS ACCORDINGLY.

IN VIEW OF THE FOREGOING WE CONCLUDE THAT NO VALID BASIS EXISTS FOR YOUR PROTEST AND IT IS THEREFORE DENIED.