B-167004, JUL. 9, 1969

B-167004, JUL. 9, 1969

TO B-AND-G INDUSTRIES, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 16, 1969, AND ATTACHMENTS, PROTESTING THE REJECTION OF YOUR BID UNDER SOLICITATION FOR BIDS NO. DSA-400-69-B-5157, ISSUED BY DEFENSE GENERAL SUPPLY CENTER, RICHMOND, VIRGINIA.

THE SOLICITATION WAS ISSUED ON FEBRUARY 18, 1969, AND BIDS WERE OPENED ON MARCH 6, 1969, FOR THE MANUFACTURE AND DELIVERY OF 660 BUMPER PLATFORMS, FSN 3930-688-8026 TO BE MADE IN ACCORDANCE WITH CONSOLIDATED DIESEL ELECTRIC CO., DIVISION OF CONDEC CORP., DRAWING NO. 2161-3217. FIVE BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. THE LOW BID OF $29.79 EACH WAS RECEIVED FROM YOU. THE NEXT LOW BID RECEIVED WAS THAT OF THE LIFT PARTS MANUFACTURING, INC., AT $31.88 EACH. YOUR COMPANY REPRESENTED ITSELF IN ITS BID AS THE MANUFACTURER OF THE SUPPLIES AND LISTED THE WARREN COMPANY, DUCK STREET, RIVERTON, VIRGINIA, AS THE PLANT WHERE THE WORK WAS TO BE PERFORMED. THE CONTRACTING OFFICER INITIATED A PREAWARD SURVEY ON MARCH 10, 1969, TO DETERMINE YOUR RESPONSIBILITY FOR THE CONTRACT. THE PREAWARD SURVEY RECOMMENDED NO AWARD TO YOU BASED ON FAILURE TO MEET THE QUALIFICATIONS OF A MANUFACTURER WITHIN THE MEANING OF THE WALSH-HEALEY PUBLIC CONTRACTS ACT AS IMPLEMENTED BY SECTION XII, PART 6 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). THE CONTRACTING OFFICER FOUND, AFTER REVIEW AND INVESTIGATION, THAT YOU WERE NOT ELIGIBLE FOR AWARD UNDER THE INVITATION AS A "MANUFACTURER" OF THE ITEM BID UPON.

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. 34-45), 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 PROVIDES 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.'

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.'

THE RESPONSIBILITY FOR APPLYING THE CRITERIA OF ELIGIBILITY OF THE WALSH- HEALEY PUBLIC CONTRACTS ACT IS VESTED IN THE FIRST INSTANCE IN THE CONTRACTING OFFICER. ASPR 12-604. PURSUANT TO THIS AUTHORITY THAT OFFICIAL MADE THE DETERMINATION THAT YOU WERE NOT A MANUFACTURER OF THE SUPPLIES WITHIN THE MEANING OF THE ACT, DESPITE THE PREPARATIONS WHICH YOU ALLEGE TO HAVE MADE IN ANTICIPATION OF RECEIVING AN AWARD. SEE B 159849, OCTOBER 24, 1966, AND B-164254, JULY 2, 1968.

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, 1962. 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.

REGARDING YOUR COMPLAINT THAT YOUR FIRM WAS NOT NOTIFIED OF THE CONTRACTING OFFICER'S INITIAL DETERMINATION OF INELIGIBILITY AS A MANUFACTURER IN SUFFICIENT TIME TO REQUEST A REVIEW OF THAT DETERMINATION, IT IS REPORTED THAT THERE WAS AN IMMEDIATE REQUIREMENT FOR 413 OF THE ITEMS OF SUPPLY AND SINCE THE DETERMINATION WAS FACTUALLY FULLY SUPPORTED, IT WAS NOT ADMINISTRATIVELY PRACTICABLE TO DELAY THE AWARD PENDING REVIEW OF THE DETERMINATION BY THE DEPARTMENT OF LABOR. WHILE PRESENT PROCEDURES (ASPR 12-604 (A) ( DO NOT PROVIDE FOR NOTIFICATION TO BIDDERS FOUND INELIGIBLE, A REVISION TO THE CITED ASPR PROVISION IS PRESENTLY UNDER CONSIDERATION TO PROVIDE FOR NOTIFICATION TO A BIDDER OF AN ADVERSE DETERMINATION AND THE AVAILABILITY TO HIM OF A REVIEW OF SUCH DETERMINATION BY THE DEPARTMENT OF LABOR PRIOR TO AWARD WHERE PRACTICABLE.

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