B-170114, FEB 24, 1971

B-170114: Feb 24, 1971

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SINCE ASTRO NAUTICS DID NOT INTEND TO MAKE A SIGNIFICANT CONTRIBUTION TO THE MANUFACTURE OR PRODUCTION OF THE CONTRACT "END ITEM" WHICH IT WAS TO SUPPLY. THE FAILURE TO INDICATE THAT THOSE ITEMS TO BE FURNISHED WERE END ITEMS MANUFACTURED OR PRODUCED BY SMALL BUSINESS CONCERNS RENDERS PROTESTANT'S BID NONRESPONSIVE. INC.: REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 25. WAS ISSUED APRIL 2. THIRTEEN BIDS WERE OPENED ON MAY 18. WAS DETERMINED TO BE NONRESPONSIBLE AND ITS BID WAS REJECTED. THE CONTRACTING OFFICER ADVISED YOUR FIRM THAT ITS BID WAS REJECTED BECAUSE IT WAS NONRESPONSIVE TO THE SMALL BUSINESS SET- ASIDE CLAUSE AND SIZE STANDARD SHOWN ON PAGE 21 OF THE INVITATION IN THAT THE SUBCONTRACTOR (MANUFACTURER) SPECIFIED IN THE BID IS A LARGE BUSINESS CONCERN.

B-170114, FEB 24, 1971

BID PROTEST - SMALL BUSINESS SET-ASIDE DENIAL OF PROTEST OF U.S. ASTRO NAUTICS SYSTEMS, INC., SECOND LOW BIDDER, AGAINST THE AWARD OF AN ADVERTISED CONTRACT ISSUED BY THE NAVAL AIR ENGINEERING CENTER, PHILADELPHIA, PENN., AS A TOTAL SMALL BUSINESS SET- ASIDE, FOR 332 MUNITION HANDLING WEAPONS TRAILERS TO BOND LUMBER AND MILLING CORP. SINCE ASTRO NAUTICS DID NOT INTEND TO MAKE A SIGNIFICANT CONTRIBUTION TO THE MANUFACTURE OR PRODUCTION OF THE CONTRACT "END ITEM" WHICH IT WAS TO SUPPLY, THE FAILURE TO INDICATE THAT THOSE ITEMS TO BE FURNISHED WERE END ITEMS MANUFACTURED OR PRODUCED BY SMALL BUSINESS CONCERNS RENDERS PROTESTANT'S BID NONRESPONSIVE.

TO U.S. ASTRO NAUTICS SYSTEMS, INC.:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 25, 1970, AND PRIOR CORRESPONDENCE, PROTESTING THE AWARD OF A CONTRACT TO BOND LUMBER AND MILLING CORPORATION UNDER INVITATION FOR BIDS (IFB) NO. N00156-70-B 0374, ISSUED BY THE NAVAL AIR ENGINEERING CENTER, PHILADELPHIA, PENNSYLVANIA.

THE SUBJECT INVITATION, A TOTAL SET-ASIDE FOR SMALL BUSINESS, WAS ISSUED APRIL 2, 1970, TO COVER A REQUIREMENT FOR 332 MUNITION HANDLING WEAPONS TRAILERS, TYPE AERO 51B. THIRTEEN BIDS WERE OPENED ON MAY 18, 1970. THE LOW BIDDER, SMITH AND COMPANY, WAS DETERMINED TO BE NONRESPONSIBLE AND ITS BID WAS REJECTED. YOUR FIRM SUBMITTED THE SECOND LOW BID. BY LETTER DATED JULY 31, 1970, THE CONTRACTING OFFICER ADVISED YOUR FIRM THAT ITS BID WAS REJECTED BECAUSE IT WAS NONRESPONSIVE TO THE SMALL BUSINESS SET- ASIDE CLAUSE AND SIZE STANDARD SHOWN ON PAGE 21 OF THE INVITATION IN THAT THE SUBCONTRACTOR (MANUFACTURER) SPECIFIED IN THE BID IS A LARGE BUSINESS CONCERN. THEREAFTER, THE CONTRACTING OFFICER DETERMINED THAT THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER WAS THE BOND LUMBER AND MILLING CORPORATION AND AN AWARD WAS MADE TO THAT FIRM.

IN A LETTER OF SEPTEMBER 9, 1970, YOU STATE THAT YOUR FIRM KNOWS OF NO RULE OR REGULATION THAT PREVENTS SUBCONTRACTING WITH A LARGE BUSINESS CONCERN UNDER A SMALL BUSINESS SET-ASIDE. FURTHER, YOU STATE THAT YOU KNOW OF NO RULE OR REGULATION THAT DETERMINES WHAT PERCENTAGE OF SUBCONTRACTING TO A LARGE BUSINESS CONCERN IS PERMISSIBLE. YOU REQUEST THAT THE CONTRACT AWARD BE SET ASIDE AND AWARD BE MADE TO YOUR FIRM AS THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER.

SINCE THE PROCUREMENT WAS WHOLLY SET ASIDE FOR SMALL BUSINESS, THE REPRESENTATIONS AND CERTIFICATIONS REQUIRED TO BE MADE BY BIDDERS WERE OF SPECIAL SIGNIFICANCE. PAGE 2 OF YOUR BID (STANDARD FORM 33) ENTITLED "REPRESENTATIONS, CERTIFICATIONS, AND ACKNOWLEDGMENTS," WAS COMPLETED AS FOLLOWS:

"1. SMALL BUSINESS (SEE PAR. 14 ON SF 33A)

HE X IS, IS NOT, A SMALL BUSINESS CONCERN. IF OFFEROR IS A SMALL BUSINESS CONCERN AND IS NOT THE MANUFACTURER OF THE SUPPLIES OFFERED, HE ALSO REPRESENTS THAT ALL SUPPLIES TO BE FURNISHED HEREUNDER WILL, WILL NOT, BE MANUFACTURED OR PRODUCED BY A SMALL BUSINESS CONCERN IN THE UNITED STATES, ITS POSSESSIONS, OR PUERTO RICO.

"2. REGULAR DEALER-MANUFACTURER (APPLICABLE ONLY TO SUPPLY CONTRACTS EXCEEDING $10,000).

HE IS A REGULAR DEALER IN, X MANUFACTURER OF, THE SUPPLIES OFFERED."

IN VIEW OF THE FACT THAT YOUR BID REPRESENTED THAT YOU WERE A MANUFACTURER SUBMITTING A BID IN YOUR OWN NAME, YOU WERE REQUIRED UNDER THE PROVISIONS OF THE "NOTICE OF TOTAL SMALL BUSINESS SET-ASIDE" TO FURNISH CONTRACT END ITEMS MANUFACTURED OR PRODUCED IN THE UNITED STATES, ITS POSSESSIONS, OR PUERTO RICO, BY SMALL BUSINESS CONCERNS.

YOUR FIRM REPRESENTED AND CERTIFIED THAT IT "IS A SMALL BUSINESS CONCERN." PAGE 21 OF THE IFB CONTAINED THE CLAUSE, ENTITLED "NOTICE OF TOTAL SMALL BUSINESS SET-ASIDE," WHICH PROVIDED IN PERTINENT PART:

"(B) DEFINITION. A 'SMALL BUSINESS CONCERN' IS A CONCERN, INCLUDING ITS AFFILIATES, WHICH IS INDEPENDENTLY OWNED AND OPERATED, IS NOT DOMINANT IN THE FIELD OF OPERATION IN WHICH IT IS BIDDING ON GOVERNMENT CONTRACTS, AND CAN FURTHER QUALIFY UNDER THE CRITERIA SET FORTH IN REGULATIONS OF THE SMALL BUSINESS ADMINISTRATION (CODE OF FEDERAL REGULATIONS, TITLE 13, SECTION 121.3-8). IN ADDITION TO MEETING THESE CRITERIA, A MANUFACTURER OR A REGULAR DEALER SUBMITTING BIDS OR PROPOSALS IN HIS OWN NAME MUST AGREE TO FURNISH IN THE PERFORMANCE OF THE CONTRACT END ITEMS MANUFACTURED OR PRODUCED IN THE UNITED STATES, ITS POSSESSIONS, OR PUERTO RICO, BY SMALL BUSINESS CONCERNS: *** "

THE SCHEDULE OF THE IFB SPECIFIES THAT THE SMALL BUSINESS EMPLOYMENT SIZE STANDARD FOR PRODUCT CLASSIFICATION CC3715 IS 500 PEOPLE. AN EXAMINATION OF YOUR BID BY THE CONTRACTING OFFICER FAILED TO INDICATE THAT YOU INTENDED TO FURNISH PRODUCTS MANUFACTURED BY SMALL BUSINESS CONCERNS AND THEREFORE YOUR BID WAS REJECTED AS NONRESPONSIVE. THE BASIS FOR THE CONTRACTING OFFICER'S DECISION IS SET FORTH BELOW.

ON PAGE 13 OF YOUR BID, UNDER THE "INSPECTION AND ACCEPTANCE" CLAUSE, YOUR FIRM LISTED THE NAME OF BROWN-MINNEAPOLIS TANK AND FABRICATION CO., ST. PAUL, MINNESOTA, AS THE PRINCIPAL MANUFACTURER OF THE SUPPLIES. SECONDLY, THE ADDRESS OF THIS SUBCONTRACTOR WAS LISTED BY YOUR FIRM AS THE LOCATION WHERE THE SUPPLIES WOULD BE INSPECTED AND THIS SAME ADDRESS WAS LISTED ON PAGE 11 OF YOUR BID AS THE F.O.B. POINT OF ORIGIN. THIRDLY, YOUR FIRM DESIGNATED BROWN-MINNEAPOLIS TANK AND FABRICATION CO. TO BE THE RECIPIENT OF THE GOVERNMENT FURNISHED PROPERTY. FINALLY, YOUR FIRM WAS GIVEN NOTICE THAT BIDS WOULD ALSO BE EVALUATED UPON TRANSPORTATION COSTS FROM THE PLACE OF MANUFACTURE (AGAIN BROWN-MINNEAPOLIS OF ST. PAUL, MINNESOTA) BASED UPON RATES EXISTING AT THE TIME OF BID OPENING.

THE CONTRACTING OFFICER MADE A FORMAL REQUEST ON JUNE 26, 1970, TO THE SMALL BUSINESS ADMINISTRATION (SBA) IN MINNEAPOLIS, MINNESOTA, REQUESTING A SIZE DETERMINATION OF YOUR LISTED SUBCONTRACTOR. THE SBA REPLIED BY LETTER DATED JULY 8, 1970, ADVISING THAT THE LISTED SUBCONTRACTOR WAS A LARGE BUSINESS. THE SBA ALSO ATTACHED A LETTER DATED JULY 6, 1970, FROM BROWN-MINNEAPOLIS STATING THAT THIS FIRM NEVER PROPOSED TO SUPPLY ITEMS TO U.S. ASTRO NAUTICS. FURTHER, BROWN MINNEAPOLIS, BY LETTER DATED JULY 7, 1970, ADVISED THE CONTRACTING OFFICER THAT IT HAD MADE NO PROPOSAL TO YOUR FIRM AND THE USE OF THE BROWN-MINNEAPOLIS NAME WAS UNAUTHORIZED. THE RECORD ALSO INDICATES THAT THE COGNIZANT DEFENSE CONTRACT ADMINISTRATION SERVICES REGION ADVISED THAT YOUR FIRM IS NOT A QUALIFIED MANUFACTURER FOR THE TYPE OF ITEM BEING PROCURED.

SINCE YOUR BID FAILED TO INDICATE AN INTENTION TO FURNISH PRODUCTS MANUFACTURED BY SMALL BUSINESS CONCERNS, IT WAS REJECTED AS NONRESPONSIVE.

AS INDICATED ABOVE, THE INVITATION WAS SET ASIDE FOR SMALL BUSINESS CONCERNS AND REQUIRED THAT THE END PRODUCT BE MANUFACTURED BY A SMALL BUSINESS CONCERN. HOWEVER, YOU DID NOT INDICATE IN YOUR BID THAT THE ARTICLES BEING PROCURED WOULD BE MANUFACTURED BY A SMALL BUSINESS CONCERN AND THE NAMED PRINCIPAL MANUFACTURER WAS A LARGE BUSINESS FIRM WHICH, IN ANY EVENT, HAS DENIED THAT IT WOULD PERFORM FOR YOU. THEREFORE, YOUR BID DID NOT REPRESENT THAT THE ARTICLES WOULD BE MANUFACTURED BY A SMALL BUSINESS CONCERN. IN B-152294, AUGUST 27, 1963, OUR OFFICE HELD THAT THE OMISSION OF SUCH INFORMATION FROM A BID WAS A MATERIAL DEVIATION RENDERING THE BID NONRESPONSIVE. FURTHER, OUR OFFICE HAS CONSISTENTLY HELD THAT BIDS WHICH ARE NONRESPONSIVE IN A MATERIAL RESPECT CANNOT BE MADE RESPONSIVE AFTER BID OPENING. SEE 40 COMP. GEN. 432 (1961); 38 ID. 819 (1959); AND 17 ID. 554 (1938).

WITH REGARD TO YOUR STATEMENT THAT YOUR FIRM KNOWS OF NO RULE OR REGULATION THAT PREVENTS SUBCONTRACTING WITH A LARGE BUSINESS CONCERN UNDER A SMALL BUSINESS SET-ASIDE, OUR OFFICE STATED IN B-166727, JULY 15, 1969:

" *** SO LONG AS THE SMALL BUSINESS FIRM, WHICH HAS SUBCONTRACTED A MAJOR PORTION OF THE WORK TO LARGE BUSINESS, MAKES SOME SIGNIFICANT CONTRIBUTION TO THE MANUFACTURE OR PRODUCTION OF THE CONTRACT END ITEM, THE CONTRACTUAL REQUIREMENT THAT THE 'END ITEM' BE MANUFACTURED OR PRODUCED BY SMALL BUSINESS CONCERNS HAS BEEN MET. SEE 39 COMP. GEN. 435; B-148155, SUPRA; B -154207, NOVEMBER 20, 1964." WE ARE ADVISED BY A REPRESENTATIVE OF THE NAVY THAT ASTRO NAUTICS DID NOT INTEND TO MAKE A SIGNIFICANT CONTRIBUTION TO THE MANUFACTURE OR PRODUCTION OF THE CONTRACT "END ITEM" AND AN EXAMINATION OF YOUR BID FAILED TO INDICATE ANY INTENTION TO FURNISH CONTRACT END ITEMS MANUFACTURED OR PRODUCED BY SMALL BUSINESS CONCERNS.

IN LIGHT OF THE FOREGOING, IT IS OUR VIEW THAT YOUR BID PROPERLY WAS DETERMINED TO BE NONRESPONSIVE. ACCORDINGLY, THE PROTEST IS DENIED.