B-166941, JUN. 24, 1969

B-166941: Jun 24, 1969

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INC.: FURTHER REFERENCE IS MADE TO YOUR TELEFAXES OF MAY 12 AND 13 AND LETTER OF MAY 13. INVITATION -1313 WAS ISSUED ON FEBRUARY 13. BIDS WERE OPENED ON MARCH 5. WHILE THE RECORD BEFORE US INDICATES THAT SLOANE'S BID UNDER INVITATION -1313 WAS DEFECTIVE IN SEVERAL RESPECTS AFFECTING THE RESPONSIVENESS OF ITS BID. IT IS NOT NECESSARY TO DISCUSS THE DETAILS OF SUCH BID DEFECTS SINCE THE CONTRACTING OFFICER DETERMINED. THAT SLOANE WAS NOT ELIGIBLE FOR AWARD UNDER BOTH INVITATIONS AS A "MANUFACTURER" OR "REGULAR DEALER" OF SCARVES AND WOOL CAPS. IS SUPPLEMENTED BY ASPR 12-601. 000 (I) WILL BE WITH MANUFACTURERS OR REGULAR DEALERS. A MANUFACTURER IS A PERSON WHO OWNS. A BIDDER MUST BE ABLE TO SHOW BEFORE THE AWARD THAT HE IS (I) AN ESTABLISHED MANUFACTURER OF THE PARTICULAR GOODS OR GOODS OF THE GENERAL CHARACTER SOUGHT BY THE GOVERNMENT.

B-166941, JUN. 24, 1969

TO NELSON KNITTING MILLS, INC.:

FURTHER REFERENCE IS MADE TO YOUR TELEFAXES OF MAY 12 AND 13 AND LETTER OF MAY 13, 1969, PROTESTING, AS THE PROSPECTIVE SUBCONTRACTOR OF M. SLOANE MANUFACTURING CO., THE AWARDS MADE UNDER DEFENSE SUPPLY AGENCY INVITATIONS FOR BIDS NOS. DSA100-69-B-1313 AND -1373, ISSUED BY DEFENSE PERSONNEL SUPPORT CENTER, PHILADELPHIA, PENNSYLVANIA.

INVITATION -1313 WAS ISSUED ON FEBRUARY 13, 1969, AND BIDS WERE OPENED ON MARCH 5, 1969, FOR THE MANUFACTURE AND DELIVERY OF MEN'S WOOL SCARVES. INVITATION -1373 DATED FEBRUARY 19, 1969, REQUESTED BIDS ON A QUANTITY OF WOOL WATCH CAPS FOR OPENING ON MARCH 11, 1969. SLOANE SUBMITTED BIDS UNDER BOTH INVITATIONS AND REPRESENTED ITSELF AS A MANUFACTURER OF THE SUPPLIES BID UPON AND THAT IT OPERATED AS A PARTNERSHIP. WHILE THE RECORD BEFORE US INDICATES THAT SLOANE'S BID UNDER INVITATION -1313 WAS DEFECTIVE IN SEVERAL RESPECTS AFFECTING THE RESPONSIVENESS OF ITS BID, IT IS NOT NECESSARY TO DISCUSS THE DETAILS OF SUCH BID DEFECTS SINCE THE CONTRACTING OFFICER DETERMINED, AFTER REVIEW AND INVESTIGATION, THAT SLOANE WAS NOT ELIGIBLE FOR AWARD UNDER BOTH INVITATIONS AS A "MANUFACTURER" OR "REGULAR DEALER" OF SCARVES AND WOOL CAPS.

THE WALSH-HEALEY PUBLIC CONTRACTS ACT, 41 U.S.C. 35-45, IS SUPPLEMENTED BY ASPR 12-601, WHICH PROVIDES AS FOLLOWS:

"STATUTORY REQUIREMENT. IN ACCORDANCE WITH THE REQUIREMENTS OF THE WALSH -HEALEY PUBLIC CONTRACTS ACT (41 U.S.C. 35-45), ALL CONTRACTS SUBJECT TO SAID ACT ENTERED INTO BY ANY DEPARTMENT FOR THE MANUFACTURE OR FURNISHING OF SUPPLIES IN ANY AMOUNT EXCEEDING $10,000 (I) WILL BE WITH MANUFACTURERS OR REGULAR DEALERS, AND (II) SHALL INCORPORATE BY REFERENCE THE REPRESENTATIONS AND STIPULATIONS REQUIRED BY SAID ACT PERTAINING TO SUCH MATTERS AS MINIMUM WAGES, MAXIMUM HOURS, CHILD LABOR, CONVICT LABOR, AND SAFE AND SANITARY WORKING CONDITIONS.' ASPR 12-603.1 AND 12-603.2 (A) PROVIDE IN PERTINENT PART AS FOLLOWS:

"MANUFACTURER. AS USED IN 12-601, A MANUFACTURER IS A PERSON WHO OWNS, OPERATES, OR MAINTAINS A FACTORY OR ESTABLISHMENT THAT PRODUCES ON THE PREMISES THE MATERIALS, SUPPLIES, ARTICLES, OR EQUIPMENT REQUIRED UNDER THE CONTRACT AND OF THE GENERAL CHARACTER DESCRIBED BY THE SPECIFICATIONS. IN ORDER TO QUALIFY AS A MANUFACTURER, A BIDDER MUST BE ABLE TO SHOW BEFORE THE AWARD THAT HE IS (I) AN ESTABLISHED MANUFACTURER OF THE PARTICULAR GOODS OR GOODS OF THE GENERAL CHARACTER SOUGHT BY THE GOVERNMENT, AND (II) IF HE IS NEWLY ENTERING INTO SUCH MANUFACTURING ACTIVITY, THAT HE HAS MADE ALL NECESSARY PRIOR ARRANGEMENTS FOR SPACE, EQUIPMENT AND PERSONNEL TO PERFORM THE MANUFACTURING OPERATIONS REQUIRED FOR THE FULFILLMENT OF THE CONTRACT. A NEW FIRM WHICH, PRIOR TO THE AWARD OF THE CONTRACT, HAS MADE SUCH DEFINITE COMMITMENTS IN ORDER TO ENTER A MANUFACTURING BUSINESS WHICH WILL LATER QUALIFY IT, SHALL NOT BE BARRED FROM RECEIVING THE AWARD BECAUSE IT HAS NOT YET DONE ANY MANUFACTURING.

"REGULAR DEALER.

"/A) * * * AS USED IN 12-601 A REGULAR DEALER IS A PERSON WHO OWNS, OPERATES, OR MAINTAINS A STORE, WAREHOUSE, OR OTHER ESTABLISHMENT IN WHICH MATERIALS, SUPPLIES, ARTICLES, OR EQUIPMENT OF THE GENERAL CHARACTER DESCRIBED BY THE SPECIFICATIONS AND REQUIRED UNDER THE CONTRACT ARE BOUGHT, KEPT IN STOCK, AND SOLD TO THE PUBLIC IN THE USUAL COURSE OF BUSINESS. * * *"

THE WALSH-HEALEY PUBLIC CONTRACTS ACT RULINGS AND INTERPRETATIONS NO. 3, PUBLISHED BY THE DEPARTMENT OF LABOR, STATES AT SECTION 29:

"/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.'

WITH REFERENCE TO THE STATUS OF SLOANE AS A MANUFACTURER OR REGULAR DEALER OF SCARVES AND WOOL WATCH CAPS, THE RECORD CONTAINS THE FOLLOWING DATA WHICH IS DISPOSITIVE OF THE MATTER: "ALTHOUGH M. SLOANE MFG. CO., MAY BE A MANUFACTURER OF DUCK AND WEBBING ITEMS AND HAS BEEN AWARDED AT LEAST ONE CONTRACT BY THE GOVERNMENT FOR THOSE ITEMS, THERE IS NO EVIDENCE THAT IT OWNS, OPERATES OR MAINTAINS A FACTORY PRODUCING KNIT GOODS WHICH ARE BEING PROCURED UNDER THESE SOLICITATIONS, AS REQUIRED BY ASPR 12-603.1. KNIT GOODS ARE MANUFACTURED BY A COMPLETELY DIFFERENT PROCESS THAN USED IN THE MANUFACTURE OF DUCK AND WEBBING ITEMS. IT CANNOT BE SAID THAT KNITTED SCARVES AND CAPS ARE OF THE SAME GENERAL CHARACTER AS DUCK AND WEBBING ITEMS. THE PLANT OF M. SLOANE MFG. O., CANNOT BE USED IN THE MANUFACTURE OF THE SCARVES AND CAPS. M. SLOANE MFG. CO., HAS SUBMITTED EVIDENCE SHOWING THAT IT IS IN A WHOLESALE BUSINESS, THAT IT SEEKS OUT CONCERNS THAT NEED A PARTICULAR PRODUCT AND ENTERS INTO AN AGREEMENT TO FURNISH SAME; THAT IT ARRANGES TO HAVE THE PRODUCT MANUFACTURED AND DELIVERED DIRECTLY TO THE PURCHASER. THERE IS NO EVIDENCE THAT IT OWNS, OPERATES OR MAINTAINS A STORE, WAREHOUSE, OR OTHER ESTABLISHMENT IN WHICH SCARVES OR CAPS OR ITEMS OF SAME GENERAL CHARACTER ARE BOUGHT, KEPT IN STOCK, AND SOLD TO PUBLIC IN THE USUAL COURSE OF BUSINESS AS REQUIRED BY ASPR 12- 603.2. EVIDENCE HAS BEEN SUBMITTED THAT NELSON KNITTING MILLS, INC., IS SUBCONTRACTOR FOR M. SLOANE MFG. CO., AND NELSON IS A QUALIFIED MANUFACTURER OF THE SCARVES AND CAPS AND THAT M. SLOANE MFG. CO., WOULD BE FINANCIALLY QUALIFIED TO PERFORM IF ELIGIBLE OTHERWISE AS A MANUFACTURER OR REGULAR DEALER. THE PURPORTED JOINT VENTURE AGREEMENT DATED 14 SEPTEMBER 1968 DOES NOT SUPPORT AN AWARD SINCE THE OFFERS WERE SIGNED BY M. SLOANE MFG. CO., ALONE WITH NO REFERENCE IN NAME OF OFFEROR BEING MADE TO NELSON KNITTING MILLS, INC. ALTHOUGH THERE IS EVIDENCE THAT M. SLOANE MFG. CO., HAS BEEN DESIGNATED AS AGENT OF NELSON KNITTING MILLS, INC., OFFER WAS NOT SUBMITTED BY M. SLOANE MFG. CO., AS AGENT OF AND IN NAME OF NELSON KNITTING MILLS, INC., NOR WAS AGENCY DISCLOSED PRIOR TO SUBMISSION OF OFFER AS REQUIRED BY ASPR 12-603.4.'

OUR OFFICE DOES NOT HAVE THE JURISDICTION TO REVIEW DETERMINATIONS AS TO WHETHER PARTICULAR BIDDERS ARE REGULAR DEALERS OR MANUFACTURERS. SEE B- 147620, JANUARY 22, 1965. RATHER, WE HAVE CONSIDERED THAT SUCH DETERMINATIONS REST WITH THE CONTRACTING OFFICES SUBJECT TO THE REVIEW OF THE DEPARTMENT OF LABOR WHICH HAS THE FINAL AUTHORITY. SEE B 148715, JUNE 25, 1962.

IN THESE CIRCUMSTANCES, THERE IS NO LEGAL BASIS UPON WHICH OUR OFFICE MAY OBJECT TO THE AWARDS MADE TO THE LOWEST RESPONSIBLE, RESPONSIVE BIDDER UNDER BOTH INVITATIONS.