B-166663, MAY 21, 1969

B-166663: May 21, 1969

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INCORPORATED: REFERENCE IS MADE TO YOUR LETTER DATED APRIL 12. A SMALL BUSINESS CONCERN FOR THE PURPOSE OF GOVERNMENT PROCUREMENT IS A CONCERN THAT (1) IS NOT DOMINANT IN ITS FIELD OF OPERATION AND WITH ITS AFFILIATES. OR (2) IS CERTIFIED AS A SMALL BUSINESS CONCERN BY THE SMALL BUSINESS ADMINISTRATION.'. BIDS RECEIVED FROM THREE SELF-CERTIFIED SMALL BUSINESS CONCERNS WERE OPENED ON MARCH 20. THE PROTEST RECORD (INCLUDING THE INVITATION FOR BIDS) WAS TRANSMITTED TO THE SMALL BUSINESS ADMINISTRATION (SBA) REGIONAL OFFICE. NO APPEAL WAS TAKEN. WAS MISLEADING. THE - CERTIFICATION- WAS OBTAINED IN RESPONSE TO A REQUEST WHICH HAD BEEN DELIBERATELY ALTERED TO ELIMINATE THE BASIS FOR THE ORIGINAL CHALLENGE. * * " CONTRARY TO YOUR ALLEGATION.

B-166663, MAY 21, 1969

TO BAKER MANUFACTURING COMPANY, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER DATED APRIL 12, 1969, WITH ATTACHMENTS PROTESTING CONSIDERATION OF A BID SUBMITTED BY THE K.L.N. STEEL PRODUCTS COMPANY UNDER INVITATION FOR BIDS NO. N62467-69-C-0210, ISSUED BY THE COMMANDING OFFICER, SOUTHEAST DIVISION, NAVAL FACILITIES ENGINEERING COMMAND, CHARLESTON, SOUTH CAROLINA.

THE INVITATION, DATED FEBRUARY 17, 1969, SOLICITED BIDS UNDER A SMALL BUSINESS SET-ASIDE FOR COLLATERAL EQUIPMENT FOR BACHELOR E/M QUARTERS, U.S. NAVAL AIR STATION, MEMPHIS, TENNESSEE. THE INVITATION CONTAINED A COVER SHEET WITH BIDDING INFORMATION INCLUDING THE FOLLOWING:

"THIS PROCUREMENT LIMITED TO SMALL BUSINESS CONCERNS ONLY. A SMALL BUSINESS CONCERN FOR THE PURPOSE OF GOVERNMENT PROCUREMENT IS A CONCERN THAT (1) IS NOT DOMINANT IN ITS FIELD OF OPERATION AND WITH ITS AFFILIATES, EMPLOYS FEWER THAN 500 EMPLOYEES, AND THE AVERAGE ANNUAL RECEIPTS OF THE CONCERN AND ITS AFFILIATES FOR THE PRECEDING THREE FISCAL YEARS DOES NOT EXCEED $3,000,000.00, OR (2) IS CERTIFIED AS A SMALL BUSINESS CONCERN BY THE SMALL BUSINESS ADMINISTRATION.'

BIDS RECEIVED FROM THREE SELF-CERTIFIED SMALL BUSINESS CONCERNS WERE OPENED ON MARCH 20, 1969. K.L.N. STEEL PRODUCTS COMPANY SUBMITTED THE LOWEST BID IN THE AMOUNT OF $468,896, AND BAKER MANUFACTURING COMPANY, INCORPORATED, SUBMITTED THE NEXT LOWEST BID IN THE AMOUNT OF $497,433. LETTER OF MARCH 24, 1969, AND TELEGRAM OF MARCH 26, 1969, BAKER MANUFACTURING COMPANY, INCORPORATED, PROTESTED CONSIDERATION OF K.L.N'S BID ON THE BASIS THAT SUCH BIDDER DID NOT QUALIFY AS A SMALL BUSINESS CONCERN SINCE THE AVERAGE ANNUAL RECEIPTS OF K.L.N. AND ITS AFFILIATES EXCEEDED THE $3,000,000 SMALL BUSINESS SET-ASIDE REQUIREMENT OF THE INVITATION QUOTED ABOVE.

THEREAFTER, ON MARCH 27, 1969, THE PROTEST RECORD (INCLUDING THE INVITATION FOR BIDS) WAS TRANSMITTED TO THE SMALL BUSINESS ADMINISTRATION (SBA) REGIONAL OFFICE, SAN ANTONIO, TEXAS, FOR A SIZE DETERMINATION OF K.L.N. PURSUANT TO ASPR 1-703 (B) (1) (I). ON APRIL 7, 1969, BY LETTER ADDRESSED TO THE SMALL BUSINESS SPECIALIST AT THE SOUTHEAST DIVISION, NAVAL FACILITIES ENGINEERING COMMAND, THE SBA REGIONAL DIRECTOR CONCLUDED THAT K.L.N. QUALIFIED AS A SMALL BUSINESS CONCERN AS DEFINED BY SBA REGULATIONS, 13 CFR 121.3-8. ALTHOUGH NOTIFIED BY CARBON COPY OF THAT LETTER OF YOUR RIGHT TO APPEAL THE DECISION IN ACCORDANCE WITH SBA REGULATIONS, NO APPEAL WAS TAKEN.

YOU DISPUTE THE PROPRIETY OF THE CERTIFICATION OF K.L.N. AS A SMALL BUSINESS CONTENDING THAT THE REQUEST SENT TO SBA BY THE SOUTHEAST DIVISION, NAVAL FACILITIES ENGINEERING COMMAND, FOR A DETERMINATION OF THE SMALL BUSINESS STATUS OF K.L.N. WAS MISLEADING. YOU ALLEGE THE FOLLOWING:

"SOUTHEAST DIVISION NAVFAC, HAVING DETERMINED THAT THE THREE MILLION DOLLARS LIMITATION HAD BEEN IMPROPERLY INCLUDED IN THE INVITATION, DELETED ALL REFERENCE TO THIS IN THEIR REQUEST TO SBA, SAN ANTONIO. THE - CERTIFICATION- WAS OBTAINED IN RESPONSE TO A REQUEST WHICH HAD BEEN DELIBERATELY ALTERED TO ELIMINATE THE BASIS FOR THE ORIGINAL CHALLENGE. * * " CONTRARY TO YOUR ALLEGATION, HOWEVER, THE LETTER TO SBA STATES THAT THE INVITATION, WHICH CONTAINS THE ABOVE QUOTED CLAUSE, IS BEING FORWARDED THEREWITH AND INDICATES THE DOLLAR CRITERIA IN THE CLAUSE WAS INADVERTENT, STATING "IT WOULD APPEAR THAT THE PROTEST INSOFAR AS THE SMALL BUSINESS ADMINISTRATION WOULD BE CONCERNED SHOULD BE LIMITED TO THE MATTER AS TO THE NUMBER OF EMPLOYEES SINCE THE REFERENCE TO DOLLAR AMOUNT IS NOT APPROPRIATE IN THIS TYPE OF PROCUREMENT.'

FURTHERMORE, YOUR PROTEST IS PREDICATED ON THE ERRONEOUS ASSUMPTION THAT SBA IS REQUIRED TO FOLLOW THE CRITERIA SET FORTH IN CLAUSE (1) OF THE ABOVE-QUOTED PORTION OF THE INVITATION IN EVALUATING K.L.N'SSMALL BUSINESS STATUS. THE INVITATION, HOWEVER, (CLAUSE (1) ( SETS FORTH THESE NOW CONCEDEDLY ERRONEOUS CRITERIA ONLY AS ONE DEFINITION OF SMALL BUSINESS. IT ALSO CONTAINS ANOTHER ALTERNATIVE DEFINITION IN CLAUSE (2), NAMELY, A FIRM WHICH IS CERTIFIED AS A SMALL BUSINESS CONCERN BY SBA. THE IFB FORM, STANDARD FORM 33, STATES "THIS PROCUREMENT LIMITED TO SMALL BUSINESS CONCERNS ONLY (SEE STD. FORM 33A).' STANDARD FORM 33A, ASPR F-100.33A, PROVIDES AS FOLLOWS:

"14. SMALL BUSINESS CONCERN. A SMALL BUSINESS CONCERN FOR THE PURPOSE OF GOVERNMENT PROCUREMENT IS A CONCERN, INCLUDING ITS AFFILIATES, WHICH IS INDEPENDENTLY OWNED AND OPERATED, IS NOT DOMINANT IN THE FIELD OF OPERATION IN WHICH IT IS SUBMITTING OFFERS ON GOVERNMENT CONTRACTS, AND CAN FURTHER QUALIFY UNDER THE CRITERIA CONCERNING NUMBER OF EMPLOYEES, AVERAGE ANNUAL RECEIPTS, OR OTHER CRITERIA, AS PRESCRIBED BY THE SMALL BUSINESS ADMINISTRATION. (SEE CODE OF FEDERAL REGULATIONS, TITLE 13, PART 121, AS AMENDED, WHICH CONTAINS DETAILED INDUSTRY DEFINITIONS AND RELATED PROCEDURES.)" THE VERY TERMS OF THE INVITATION MADE IT QUITE CLEAR THAT THE CERTIFICATION AS TO SMALL BUSINESS STATUS IS GOVERNED BY SBA REGULATIONS, 13 CFR 121.3-8 AND NOT THE ALTERNATIVE LIMITATIONS SET OUT IN THE INVITATION.

UNDER 15 U.S.C. 637 (B) (6), A DECISION OF SBA REGARDING THE SIZE STATUS OF A PARTICULAR CONCERN IS CONCLUSIVE UPON THE PROCUREMENT AGENCY INVOLVED. 46 COMP. GEN. 898, 900; 44 COMP. GEN. 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). ACCORDINGLY, SINCE THE DECISION OF SBA REGARDING SIZE STATUS OF A COMPANY, BY STATUTE, IS "CONCLUSIVE," WE HAVE NO ALTERNATIVE BUT TO DENY YOUR PROTEST ON THIS GROUND.

IN ANY EVENT, SINCE YOU DID NOT APPEAL THE SBA SIZE DETERMINATION, YOUR RIGHT TO PROTEST IS DEEMED WAIVED INSOFAR AS THIS PROCUREMENT IS CONCERNED AS PROVIDED BY ASPR 1-703 (B) (4) AS FOLLOWS:

"APPEAL FROM SIZE DETERMINATION. AN APPEAL FROM A SIZE DETERMINATION MADE BY AN SBA REGIONAL DIRECTOR MAY BE TAKEN BEFORE THE CLOSE OF BUSINESS ON THE FIFTH WORKING DAY AFTER THE RECEIPT OF SUCH DECISION. UNLESS SUCH WRITTEN NOTICE OF APPEAL IS RECEIVED BY THE SBA SIZE APPEALS BOARD, WASHINGTON, D.C., WITHIN THIS TIME AND THE CONTRACTING OFFICER HAS BEEN NOTIFIED OF SUCH APPEAL PRIOR TO AWARD, THE APPELLANT WILL BE DEEMED TO HAVE WAIVED ITS RIGHTS OF APPEAL INSOFAR AS THE PENDING PROCUREMENT IS CONCERNED.' SBA REGULATIONS, 13 CFR 121.3-6 (B) (3) ALSO CONTAIN THIS FIVE-DAY TIME LIMIT PROVISION.