B-169008, APR. 8, 1970

B-169008, APR. 8, 1970

CONTRACTS--AWARDS--SMALL BUSINESS CONCERNS--SET-ASIDES--WITHDRAWAL--BID PRICES EXCESSIVE ORIGINAL INVITATION FOR WINDOW CLEANING SERVICES, WITH TOTAL SMALL BUSINESS SET-ASIDE, WAS CANCELED SINCE PRICES OF TWO RESPONSIVE BIDS WERE UNREASONABLE, AND PROCUREMENT WAS READVERTISED ON UNRESTRICTED BASIS. UNSUCCESSFUL BIDDER WHO PROTESTS WITHDRAWAL OF SMALL BUSINESS SET-ASIDE AND AWARD TO BIG BUSINESS, OFFERS NO BASIS FOR OBJECTION. WHILE SMALL BUSINESS ACT AUTHORIZES AWARD TO SMALL BUSINESS CONCERNS AT PRICES WHICH MAY BE HIGHER THAN THOSE OBTAINABLE BY UNRESTRICTED COMPETITION, IT WAS NOT INTENDED TO REQUIRE AWARD WITHOUT REGARD FOR PRICES OBTAINABLE FROM OTHER SOURCES, AND RECORD SUPPORTS AGENCY DETERMINATION. SEE COMP. GEN. DECS. CITED.

TO BUILDING MAINTENANCE CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 3, 1970, PROTESTING THE ISSUANCE OF INVITATION FOR BIDS NO. DABG03-70-B-0049 WITHOUT DESIGNATION AS A SMALL BUSINESS SET-ASIDE BY THE PROCUREMENT DIVISION, HEADQUARTERS, U. S. ARMY, CAMERON STATION, ALEXANDRIA, VIRGINIA.

THE INVITATION WAS AN UNRESTRICTED REISSUANCE OF A SOLICITATION FOR BIDS FOR SERVICES ON A REQUIREMENTS BASIS AND SUCCEEDED DABG03-70-B 0034 WHICH HAD BEEN CANCELED. INVITATION NO. -0034 WAS ISSUED ON NOVEMBER 4, 1969, AS A 100-PERCENT SET-ASIDE FOR SMALL BUSINESS AND 12 FIRMS WERE MAILED COPIES OF THE SOLICITATION FOR WINDOW CLEANING SERVICES TO BE PERFORMED AT VARIOUS AREAS AT FORT MYER, VIRGINIA. ON NOVEMBER 21, 1969, BIDS WERE OPENED AND FOUR BIDS WERE RECEIVED AS FOLLOWS:

BIDDER BID U. S. WINDOW & HOUSE CLEANING CO. $2,648.30, 3 PERCENT, 10 DAYS SPARKLE MAINTENANCE SERVICE 3,552.80 CLEANING CONTRACTORS, INC. 3,859.90 BUILDING MAINTENANCE CORPORATION 3,974.00, 18 PERCENT, 20 DAYS

FOLLOWING RECEIPT OF A PROTEST THAT U. S. WINDOW & HOUSE CLEANING CO. IS LARGE BUSINESS, IT WAS DETERMINED BY THE SMALL BUSINESS ADMINISTRATION THAT IT WAS OTHER THAN SMALL BUSINESS. REVIEW OF YOUR BID REVEALED THAT IT WAS NONRESPONSIVE IN THAT IT FAILED TO PROVIDE THE 30-DAY ACCEPTANCE PERIOD REQUIRED IN THE INVITATION. THE PRICES OF THE OTHER TWO BIDS WERE DETERMINED TO BE UNREASONABLE AND IT WAS DECIDED THAT THE INVITATION SHOULD BE CANCELED AND THE PROCUREMENT READVERTISED. IT WAS DECIDED FURTHER THAT TO FOSTER BETTER COMPETITION AND ACHIEVE A MORE REASONABLE PRICE THE PROCUREMENT WOULD BE READVERTISED ON AN UNRESTRICTED BASIS.

SOLICITATION -0049 WAS ISSUED ON JANUARY 27, 1970, AND 15 FIRMS WERE SOLICITED, BOTH LARGE AND SMALL BUSINESS. BID OPENING WAS HELD ON FEBRUARY 13, 1970, AND FIVE BIDS WERE RECEIVED AS FOLLOWS:

BIDDER BID U. S. WINDOW & HOUSE CLEANING CO. $2,648.80, 3 PERCENT, 10 DAYS CITY WINDOW CLEANING CO. 2,710.20 CLEANING CONTRACTORS, INC. 3,409.25 ARROW WINDOW & BUILDING CLEANING CONTRACTORS 3,869.40, 3 PERCENT, 10 DAYS BUILDING MAINTENANCE CORPORATION 3,974.00, 18 PERCENT, 20 DAYS

YOU PROTEST THAT THIS PROCUREMENT HAS ALWAYS BEEN A SMALL BUSINESS SET- ASIDE AND THAT THERE ARE APPROXIMATELY 100 SMALL WINDOW CLEANING FIRMS IN THE WASHINGTON METROPOLITAN AREA WHICH ARE QUALIFIED TO BID ON A PROCUREMENT OF THIS TYPE. YOU STATE THAT THE ONLY APPARENT REASON THE GOVERNMENT HAS FOR REMOVING THIS PROCUREMENT FROM THE SMALL BUSINESS SET- ASIDE CATEGORY IS TO GIVE THE LARGE BUSINESS AN OPPORTUNITY TO RESUBMIT A BID AND THAT THIS OBVIOUSLY CIRCUMVENTS AND SUBVERTS THE INTENT OF THE SMALL BUSINESS ADMINISTRATION ACT.

REGARDING THE PROPRIETY OF THE DECISION OF THE CONTRACTING OFFICER TO REJECT ALL BIDS UNDER THE INVITATION, PARAGRAPH 1-706.5 (A) (1) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) PROVIDES AS FOLLOWS:

"(A) (1) SUBJECT TO ANY APPLICABLE PREFERENCE FOR LABOR SURPLUS AREA SET- ASIDES AS PROVIDED IN 1-803 (A) (II), THE ENTIRE AMOUNT OF AN INDIVIDUAL PROCUREMENT OR A CLASS OF PROCUREMENTS, INCLUDING BUT NOT LIMITED TO CONTRACTS FOR MAINTENANCE, REPAIR, AND CONSTRUCTION, SHALL BE SET ASIDE FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION (SEE 1-701.1) IF THE CONTRACTING OFFICER DETERMINES THAT THERE IS REASONABLE EXPECTATION THAT BIDS OR PROPOSALS WILL BE OBTAINED FROM A SUFFICIENT NUMBER OF RESPONSIBLE SMALL BUSINESS CONCERNS SO THAT AWARDS WILL BE MADE AT REASONABLE PRICES. TOTAL SET-ASIDES SHALL NOT BE MADE UNLESS SUCH A REASONABLE EXPECTATION EXISTS. (BUT SEE 1-706.6 AS TO PARTIAL SET-ASIDES.) ALTHOUGH PAST PROCUREMENT HISTORY OF THE ITEM OR SIMILAR ITEMS IS ALWAYS IMPORTANT, IT IS NOT THE ONLY FACTOR WHICH SHOULD BE CONSIDERED IN DETERMINING WHETHER A REASONABLE EXPECTATION EXISTS."

IN ADDITION, ASPR 1-706.3 (A) AUTHORIZES WITHDRAWAL OF SMALL BUSINESS SET -ASIDES AS FOLLOWS:

"* * * IF, PRIOR TO AWARD OF A CONTRACT INVOLVING AN INDIVIDUAL OR CLASS SET-ASIDE, THE CONTRACTING OFFICER CONSIDERS THAT PROCUREMENT OF THE SET- ASIDE FROM A SMALL BUSINESS CONCERN WOULD BE DETRIMENTAL TO THE PUBLIC INTEREST (E.G; BECAUSE OF UNREASONABLE PRICE), HE MAY WITHDRAW A UNILATERAL OR JOINT SET-ASIDE DETERMINATION * * *"

ASPR 1-706.3 (A), QUOTED ABOVE, PROVIDES FOR THE WITHDRAWAL OF A SMALL BUSINESS SET-ASIDE WHEN IT IS CONSIDERED THAT AWARD UNDER THE SET ASIDE WOULD BE DETRIMENTAL TO THE PUBLIC INTEREST. OUR OFFICE HAS RECOGNIZED THAT THE DETERMINATION TO WITHDRAW A SMALL BUSINESS SET ASIDE IS A MATTER WHICH RESTS WITHIN THE ADMINISTRATIVE DISCRETION, AND WHERE IT IS SHOWN THAT THE PURPOSE OF SUCH ACTION IS TO OBTAIN FOR THE GOVERNMENT THE ADVANTAGE OF MORE COMPETITIVE AND REALISTIC BIDDING AS DETERMINED BY THE GOVERNMENT'S DULY CONSTITUTED AGENTS, WE WILL NOT OBJECT TO SUCH ACTION. 37 COMP. GEN. 147 (1957).

WHILE THE PROVISIONS OF THE SMALL BUSINESS ACT AUTHORIZE THE AWARD OF CONTRACTS TO SMALL BUSINESS CONCERNS AT PRICES WHICH MAY BE HIGHER THAN THOSE OBTAINABLE BY UNRESTRICTED COMPETITION, WE ARE AWARE OF NO VALID BASIS UPON WHICH IT MAY BE CONCLUDED THAT THIS ACT WAS INTENDED TO REQUIRE THE AWARD OF CONTRACTS TO SMALL BUSINESS CONCERNS WITHOUT REGARD BY THE CONTRACTING AGENCY FOR PRICES THAT COULD BE OBTAINED FROM OTHER CONCERNS, OR TO PROHIBIT THE CONTRACTING AGENCY FROM WITHDRAWING A SET-ASIDE DETERMINATION WHERE CONSIDERABLY BETTER PRICES THAN THE BIDS SUBMITTED BY SMALL BUSINESS CONCERNS COULD BE OBTAINED FROM OTHER CONCERNS. B-149889, NOVEMBER 2, 1962.

THE DIFFERENCE BETWEEN THE U. S. WINDOW & HOUSE CLEANING BID AND YOUR NONRESPONSIVE BID ON THE FIRST INVITATION WAS ABOUT 26 PERCENT AND THE DIFFERENCE BETWEEN THE U. S. WINDOW & HOUSE CLEANING BID AND THE LOWEST RESPONSIVE BID WAS ABOUT 38 PERCENT. IN VIEW THEREOF, IT WAS REASONABLE TO EXPECT THAT A SUBSTANTIAL SAVINGS IN COST TO THE GOVERNMENT WOULD BE EFFECTED BY READVERTISING WITHOUT RESTRICTION TO SMALL BUSINESS AND WE COULD NOT CONCLUDE THAT THE DETERMINATION TO WITHDRAW THE SET-ASIDE WAS NOT JUSTIFIED IN THE CIRCUMSTANCES.

WE THEREFORE CONCLUDE THAT THE RECORD SUPPORTS THE CONTRACTING AGENCY'S DETERMINATION TO WITHDRAW THE SET-ASIDE AND SOLICIT BIDS ON AN UNRESTRICTED BASIS. ACCORDINGLY, YOUR PROTEST IS DENIED.