B-170998(1), NOV. 24, 1970

B-170998(1): Nov 24, 1970

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AGAINST CONTRACTING OFFICER'S DETERMINATION THAT FAILURE TO SUBMIT BID INFORMATION RELATIVE TO GALION'S ELIGIBILITY AS A LABOR SURPLUS CONCERN IS A MATERIAL DEFECT WHICH COULD NOT BE CURED AFTER BID OPENING AND AWARD OF THE SMALL BUSINESS SET-ASIDE PORTION OF THE U.S. IS THE PHASE " ... THE CLAIM THAT THE AMBIGUITY PREVENTED COMPLIANCE WITH THE SURPLUS LABOR CERTIFICATION SECTION OF THE INVITATION IS WITHOUT MERIT. THAT THE OMISSION FROM A BID OF INFORMATION NECESSARY TO ESTABLISH THE ELIGIBILITY OF A BIDDER FOR CONSIDERATION AS A CERTIFIED-ELIGIBLE CONCERN IS A MATERIAL DEFECT WHICH MAY NOT BE CURED AFTER BID OPENING. WE MUST CONCLUDE THAT THE CONTRACTING OFFICER'S DECISION WAS A PROPER DISCHARGE OF HIS PROCUREMENT RESPONSIBILITY AND SHOULD BE SUSTAINED.

B-170998(1), NOV. 24, 1970

BID PROTEST - DEFECTIVE BID - LABOR SURPLUS CERTIFICATION DENIAL OF PROTEST BY GALION AMCO, INC., AGAINST CONTRACTING OFFICER'S DETERMINATION THAT FAILURE TO SUBMIT BID INFORMATION RELATIVE TO GALION'S ELIGIBILITY AS A LABOR SURPLUS CONCERN IS A MATERIAL DEFECT WHICH COULD NOT BE CURED AFTER BID OPENING AND AWARD OF THE SMALL BUSINESS SET-ASIDE PORTION OF THE U.S. ARMY MATERIAL COMMAND INVITATION TO BARSTOCK PRODUCTS, INC. GALION'S CLAIM THAT THE INVITATION CONTAINED AMBIGUOUS INSTRUCTIONS, AND THAT IN ACCORDANCE WITH 41 COMP. GEN. 160 (1961), GALION SHOULD BE PERMITTED TO ESTABLISH ITS QUALIFICATIONS AS A CERTIFIED-ELIGIBLE FIRM, CANNOT STAND BECAUSE THE INVITATION COMPLIES WITH THE NOTICE REQUIREMENTS OF THE ABOVE MENTIONED DECISION. THE FOCAL POINT OF THE ALLEGED AMBIGUITY, IS THE PHASE " ... PERCENTAGE (%) 'OF THE CONTRACT', WHICH WHEN EXAMINED IN CONTEXT CLEARLY MEANS "PERCENTAGE (%) 'OF THE SET-ASIDE PORTION OF THE CONTRACT.' THEREFORE, THE CLAIM THAT THE AMBIGUITY PREVENTED COMPLIANCE WITH THE SURPLUS LABOR CERTIFICATION SECTION OF THE INVITATION IS WITHOUT MERIT.

TO MR. ASHER W. SWEENEY:

WE REFER TO YOUR LETTER, WITH ENCLOSURES, OF OCTOBER 6, 1970, PROTESTING ON BEHALF OF GALION AMCO, INC., AGAINST A CONTRACTING OFFICER'S DETERMINATION THAT GALION'S FAILURE TO SUBMIT WITH ITS BID INFORMATION RELATIVE TO ITS ELIGIBILITY AS A LABOR SURPLUS CONCERN COULD NOT BE CURED AFTER BID OPENING AND, THEREFORE, THE FIRM COULD NOT BE ACCORDED ANY PREFERENCE FOR THE NEGOTIATION AND AWARD OF THE SMALL BUSINESS SET-ASIDE PORTION OF ARMY INVITATION FOR BIDS NO. DAAA25-71-B 0015.

WE NOTE INITIALLY THAT YOU DO NOT TAKE EXCEPTION TO THE GENERAL PROPOSITION, ARTICULATED IN NUMEROUS DECISIONS OF OUR OFFICE, THAT THE OMISSION FROM A BID OF INFORMATION NECESSARY TO ESTABLISH THE ELIGIBILITY OF A BIDDER FOR CONSIDERATION AS A CERTIFIED-ELIGIBLE CONCERN IS A MATERIAL DEFECT WHICH MAY NOT BE CURED AFTER BID OPENING. SEE, E.G., 47 COMP. GEN. 543 (1968); B-169260, MAY 19, 1970; B-164115, AUGUST 30, 1968. YOU URGE, HOWEVER, THAT THE INVITATION CONTAINED AMBIGUOUS AND INADEQUATE INSTRUCTIONS RELATIVE TO THE INFORMATION REQUIRED TO ESTABLISH ELIGIBILITY, AND THAT IN ACCORDANCE WITH 41 COMP. GEN. 160 (1961), GALION SHOULD BE PERMITTED TO ESTABLISH ITS QUALIFICATION AS A CERTIFIED-ELIGIBLE FIRM.

BY LETTER, WITH ENCLOSURES, DATED NOVEMBER 6, 1970, THE ASSISTANT GENERAL COUNSEL, HEADQUARTERS UNITED STATES ARMY MATERIEL COMMAND, FURNISHED OUR OFFICE AN ADMINISTRATIVE REPORT ON YOUR PROTEST WHICH SUPPORTS THE CONTRACTING OFFICER'S DECISION. BY LETTER DATED OCTOBER 14, 1970, BARSTOCK PRODUCTS, INC., THE FIRM WITH FIRST PRIORITY FOR NEGOTIATION OF THE SET-ASIDE PORTION, HAS ALSO OPPOSED YOUR REQUEST. FROM OUR REVIEW OF THE RECORD, WE MUST CONCLUDE THAT THE CONTRACTING OFFICER'S DECISION WAS A PROPER DISCHARGE OF HIS PROCUREMENT RESPONSIBILITY AND SHOULD BE SUSTAINED.

IN 41 COMP. GEN. 160 (1961), WE AUTHORIZED THE POST-BID OPENING SUBMISSION AND CONSIDERATION OF INFORMATION FOR THE PURPOSE OF ESTABLISHING ELIGIBILITY AND PRIORITY FOR NEGOTIATION OF A PARTIAL LABOR SURPLUS SET-ASIDE ON THE GROUND THAT THE INFORMATION REQUIRED BY THE INVITATION MADE IT IMPOSSIBLE TO DETERMINE, WITH ANY DEGREE OF CERTAINTY, A BIDDER'S ENTITLEMENT TO PRIORITY IN NEGOTIATION BY QUALIFYING AS A LABOR SURPLUS CONCERN. WE FURTHER EXPRESSED THE OPINION, EQUALLY APPLICABLE IN THIS CONTEXT, THAT:

" *** INVITATIONS INVOLVING LABOR SURPLUS SET-ASIDES SHOULD CONTAIN CLEAR STATEMENTS AS TO THE INFORMATION WHICH BIDDERS WILL BE REQUIRED TO FURNISH, THE SUPPORTING DATA, IF ANY, WHICH MAY BE REQUIRED, AND WHETHER ANY OR ALL OF SUCH INFORMATION IS TO BE FURNISHED WITH THE INVITATION AND THE EFFECT OF FAILURE TO FURNISH IT." ID. AT 165.

SECTION C-13 OF THE INVITATION REPRODUCES THE CLAUSE, ENTITLED "NOTICE OF PARTIAL SMALL BUSINESS SET-ASIDE (69 JUN)," REQUIRED BY PARAGRAPH 1- 706.6(C)(1) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). BELIEVE THAT A CAREFUL READING OF THIS CLAUSE, PARTICULARLY PARAGRAPHS 4(C) AND 4(E) THEREOF, WILL CLEARLY DEMONSTRATE THAT IT COMPLIES WITH THE NOTICE REQUIREMENTS OF 41 COMP. GEN. 160, QUOTED ABOVE. IT IS APPARENTLY YOUR POSITION, HOWEVER, THAT THE PROVISIONS OF SECTION C-13 ARE OF NO CONSEQUENCE BECAUSE OF AN ASSERTED AMBIGUITY IN THE LABOR SURPLUS CERTIFICATION PROVISION OF SECTION B-4:

"LABOR SURPLUS CERTIFICATION. BIDDER CERTIFIES THAT MORE THAN TWENTY FIVE PERCENT OF THE CONTRACT PRICE IN THE CASE OF CONCENTRATED UNEMPLOYMENT OR UNDEREMPLOYMENT, AND MORE THAN FIFTY PERCENT IN THE CASE OF PERSISTENT OR SUBSTANTIAL LABOR SURPLUS AREAS WILL BE MANUFACTURING OR PRODUCTION COSTS (BY ITSELF OR ITS FIRST-TIER SUBCONTRACTORS) IN AN AREAS CLASSIFIED BY DEPARTMENT OF LABOR AS:

"(BIDDER SHALL INDICATE ONE OF THE FOLLOWING)

SECTION OF CONCENTRATED UNEMPLOYMENT OR UNDEREMPLOYMENT

PERSISTENT LABOR SURPLUS AREA

SUBSTANTIAL LABOR SURPLUS AREA

PERCENTAGE AND PLACE OF INCURRENCE, INCLUDING PRIME CONTRACTOR AND FIRST- TIER SUBCONTRACTORS:

(CITY, COUNTY AND STATE)

(CITY, COUNTY AND STATE)

(CITY, COUNTY AND STATE)

(CITY, COUNTY AND STATE)

(CITY, COUNTY AND STATE)

(IF MORE SPACE IS REQUIRED, ADD ALL ADDITIONAL AREAS ON SEPARATE SHEET AND ATTACH TO BID)

"BIDDERS ARE CAUTIONED THAT THE ABOVE INFORMATION IS TO BE COMPLETED IN SUFFICIENT DETAIL TO SHOW THAT MORE THAN FIFTY PERCENT (50 %) OF THE COST OF MANUFACTURING OR PRODUCTION ARE TO BE INCURRED IN THE LABOR AREAS DESIGNATED. FAILURE OF THE BIDDER TO PROPERLY COMPLETE THIS CERTIFICATE WILL PREVENT THE BIDDER FROM PARTICIPATING IN THE NEGOTIATIONS FOR AWARD OF THE SET ASIDE PORTION OF THIS PROCUREMENT. BIDDERS WHO ARE IN DOUBT AS TO WHAT CONSTITUTES THE INCURRENCE OF COSTS IN A LABOR SURPLUS AREA SHOULD CONSULT ASPR 1-801 FOR DEFINITIONS AND EXAMPLES." FOCUSING ON THE WORDS "CONTRACT PRICE," YOU SUGGEST THAT:

" *** A SUPPLIER COULD NOT 'PROPERLY' ACCOMPLISH THIS SECTION B-4 WITH ANY ACCURACY WHATSOEVER UNLESS HE KNEW WHETHER HE WOULD OBTAIN BOTH THE SET-ASIDE AND NON-SET-ASIDE PORTION OF THE CONTRACT. THIS SECTION B-4 COULD NOT BE ACCOMPLISHED UNTIL AFTER AWARD OF THE NON-SET ASIDE PORTION."

THIS CONTENTION, AS WELL AS THE OTHER SUGGESTIONS MADE IN YOUR LETTER, IS, IN OUR OPINION, COMPLETELY ANSWERED BY THE FOLLOWING EXCERPTS FROM A MEMORANDUM OF OCTOBER 29, 1970, FROM THE CONTRACTING OFFICER'S LEGAL COUNSEL:

"4. THE FOCAL POINT OF THE ALLEGED AMBIGUITY IS THE PHRASE ... PERCENTAGE (%) 'OF THE CONTRACT PRICE,' WHICH THE PROTESTOR STATES SHOULD READ-FOR PURPOSES OF CLARITY-PERCENTAGE 'OF THE SET-ASIDE PORTION OF THE CONTRACT PRICE.' THIS CLAIMED AMBIGUITY APPEARS TO BE AN OBVIOUS MAKE WEIGHT SINCE THE CLAUSE IN CONTEXT IS CLEAR. B-4 MERELY REPEATS THE REQUIREMENTS OF THE 'NOTICE OF PARTIAL SMALL BUSINESS SET ASIDE' CLAUSE WHICH READS ... PERCENTAGE 'OF THE CONTRACT PRICE.' IT IS OBVIOUS, IN CONTEXT, THAT THE CONTRACT PRICE REFERENCED IS THE SET ASIDE PORTION CONTRACT PRICE SINCE LABOR SURPLUS PRIORITY IS IRRELEVANT TO AWARD OF THE NON-SET-ASIDE PORTION (EXCEPT FOR TIE BIDS). THE CLAIMED FOR CLARITY OF THE 'NOTICE OF LABOR SURPLUS AREA SET-ASIDE' CLAUSE IS NOT COMPREHENDED SINCE THIS CLAUSE ALSO READS PERCENTAGE 'OF THE CONTRACT PRICE,' NOT PERCENTAGE OF THE SET-ASIDE PORTION CONTRACT PRICE. THE SAME LANGUAGE APPEARS IN B-4 AND IN BOTH SET-ASIDE CLAUSES (SMALL BUSINESS AND LABOR SURPLUS) SO THAT IT IS NOT UNDERSTOOD HOW THE PROVISIONS WOULD BE 'CLEARER' IF THE PROCUREMENT WERE PARTIALLY SET ASIDE FOR LABOR SURPLUS AREA CONCERNS, INSTEAD OF SMALL BUSINESS CONCERNS. FURTHER, IT IS NOTED THAT FOUR (4) FIRMS CLAIMED 'CERTIFIED ELIGIBLE' PREFERENCE STATUS PRIOR TO BID OPENING INDICATING THAT THE PROVISIONS WERE NOT AMBIGUOUS AS CLAIMED BY THE PROTESTOR.

"6. THE PROTESTOR IS FULLY AWARE THAT PROVISIONS AKIN TO B-4 ARE FILL- INS TO COMPLY WITH THE MANDATES OF SET-ASIDE CLAUSES TO PROVIDE INFORMATION AND MAKE THE REQUIRED REPRESENTATIONS IN THE BID PRIOR TO BID OPENING. YOU ADVISE THAT IN IFB NO. DAAA25-70-B0258 WHICH WAS A PARTIAL SET-ASIDE FOR LABOR SURPLUS AREA CONCERNS, IN A PRIOR PROCUREMENT, THE PROTESTOR COMPLETED A SIMILAR FILL-IN PROVISION 'F-10' PRIOR TO BID OPENING AND SUBMITTED THE REQUIRED 'CERTIFIED-ELIGIBLE' CERTIFICATIONS. THUS, GALION AMCO'S PRIOR COMPLETION OF LABOR SURPLUS AREA FILL-IN INFORMATION IN A PROVISION AKIN TO B-4 INDICATES THAT IT SHOULD HAVE BEEN AWARE OF THE NEED TO MAKE THE REPRESENTATIONS AND SUBMIT THE INFORMATION PRIOR TO BID OPENING."

ACCORDINGLY, YOUR PROTEST IS DENIED.