B-171693, APR 22, 1971

B-171693: Apr 22, 1971

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HAS HELD THAT A DETERMINATION AS TO WHETHER A REASONABLE EXPECTATION OF SMALL BUSINESS COMPETITION EXISTS IS WITHIN THE DISCRETION OF THE ADMINISTRATIVE AGENCY. WHERE ONLY ONE BID WAS SUBMITTED THE DECISION NOT TO ISSUE AN IFB FOR THE SECOND-STEP OF THE TWO-STEP PROCUREMENT APPEARS PROPER. MORRIS PINSLEY: REFERENCE IS MADE TO YOUR TELEFAX OF JANUARY 14. FOR A QUANTITY OF MODIFICATION KITS AND RELATED COMPONENTS FOR A NEW POWER SUPPLY FOR THE AN/FPS-35 RADAR SET WAS TOTALLY SET ASIDE FOR PARTICIPATION BY SMALL BUSINESS FIRMS ONLY. THE LRFTP WAS SENT TO THIRTY-THREE SMALL BUSINESS FIRMS AND THREE RESPONDED WITH TECHNICAL PROPOSALS. IT WAS FOUND THAT ONLY ONE PROPOSAL. WAS ACCEPTABLE. THE SUBJECT LRFTP WAS CANCELLED.

B-171693, APR 22, 1971

BID PROTEST - INADEQUATE COMPETITION DECISION DENYING PROTEST BY SOLE BIDDER AGAINST CANCELLATION OF LETTER REQUEST FOR TECHNICAL PROPOSALS WITH A PROVISION FOR A SMALL BUSINESS SET- ASIDE AND RESOLICITATION OF THE SAME PROCUREMENT WITHOUT THE SET-ASIDE, BY MCCLELLAN AFB FOR A QUANTITY OF MODIFICATION KITS AND COMPONENTS FOR A NEW POWER SUPPLY FOR THE AN/FPS-35 RADAR SET. THE COMP. GEN. HAS HELD THAT A DETERMINATION AS TO WHETHER A REASONABLE EXPECTATION OF SMALL BUSINESS COMPETITION EXISTS IS WITHIN THE DISCRETION OF THE ADMINISTRATIVE AGENCY, AND WHERE ONLY ONE BID WAS SUBMITTED THE DECISION NOT TO ISSUE AN IFB FOR THE SECOND-STEP OF THE TWO-STEP PROCUREMENT APPEARS PROPER.

TO MR. MORRIS PINSLEY:

REFERENCE IS MADE TO YOUR TELEFAX OF JANUARY 14, 1971, AND SUPPLEMENTING LETTERS OF JANUARY 18 AND MARCH 24 AND 30, 1971, ON BEHALF OF ESPEY MANUFACTURING AND ELECTRONICS CORPORATION (ESPEY) PROTESTING THE CANCELLATION OF LETTER REQUEST FOR TECHNICAL PROPOSALS (LRFTP) F04606-71-R -0051 AND THE RESOLICITATION OF THE SAME PROCUREMENT UNDER LRFTP F04606-71 -R-0258, ISSUED AT MCCLELLAN AIR FORCE BASE, CALIFORNIA.

LRFTP F04606-71-R-0051, ISSUED AUGUST 5, 1970, FOR A QUANTITY OF MODIFICATION KITS AND RELATED COMPONENTS FOR A NEW POWER SUPPLY FOR THE AN/FPS-35 RADAR SET WAS TOTALLY SET ASIDE FOR PARTICIPATION BY SMALL BUSINESS FIRMS ONLY, TO BE PROCESSED UNDER TWO-STEP ADVERTISED PROCUREMENT PROCEDURES. THE LRFTP WAS SENT TO THIRTY-THREE SMALL BUSINESS FIRMS AND THREE RESPONDED WITH TECHNICAL PROPOSALS. UPON EVALUATION OF THESE PROPOSALS BY THE AIR FORCE, IT WAS FOUND THAT ONLY ONE PROPOSAL, ESPEY'S, WAS ACCEPTABLE. THEREFORE, THE CONTRACTING OFFICER DETERMINED THAT IT WOULD BE DETRIMENTAL TO THE PUBLIC INTEREST TO CONTINUE THE SMALL BUSINESS SET-ASIDE. THE SUBJECT LRFTP WAS CANCELLED, THE SET-ASIDE WITHDRAWN AND THE REQUIREMENT RESOLICITED UNDER LRFTP F04606-71-R-0258 WHICH MAKES NO PROVISION FOR A SET-ASIDE. AWARD HAS NOT YET BEEN MADE UNDER THE LATTER LRFTP.

YOU SPECIFICALLY PROTEST THE CONTRACTING OFFICER'S DECISION TO WITHDRAW THE LRFTP FROM SMALL BUSINESS SET-ASIDE BEFORE YOU WERE GIVEN AN OPPORTUNITY TO BID IN THE SECOND STEP OF THE TWO-STEP PROCESS. YOU CONTEND THAT IT WAS IMPOSSIBLE FOR THE CONTRACTING OFFICER TO DETERMINE WHETHER YOUR PRICE WOULD BE REASONABLE IN ADVANCE OF THE RECEIPT OF YOUR BID.

SECTION 15 OF THE SMALL BUSINESS ACT, 15 U.S.C. 644, PROVIDES THAT SMALL BUSINESS CONCERNS SHALL RECEIVE ANY AWARD DETERMINED TO BE IN THE INTEREST OF ASSURING THAT A FAIR PORTION OF THE TOTAL PURCHASES AND CONTRACTS FOR PROPERTY AND SERVICES FOR THE GOVERNMENT ARE PLACED WITH SMALL BUSINESS CONCERNS. UNDER THE SECTION AND THE IMPLEMENTING REGULATION, ASPR 1-706, THE CONTRACTING OFFICER EITHER ALONE OR JOINTLY WITH THE SMALL BUSINESS ADMINISTRATION REPRESENTATIVE, ORDINARILY DETERMINES WHETHER A PARTICULAR PROCUREMENT SHOULD BE SET ASIDE FOR SMALL BUSINESS. ASPR 1-706.5(A)(1) PROHIBITS SUCH TOTAL SET-ASIDES FOR SMALL BUSINESS UNLESS THERE IS A REASONABLE EXPECTATION THAT BIDS OR PROPOSALS WILL BE OBTAINED FROM A SUFFICIENT NUMBER OF SMALL BUSINESS CONCERNS TO INSURE THAT AWARDS WILL BE MADE AT REASONABLE PRICES. ACCORDINGLY WHEN THE CONTRACTING OFFICER FOUND, AFTER THE FIRST STEP OF THE TWO-STEP PROCESS UTILIZED IN THE INSTANT PROCUREMENT, THAT ESPEY WOULD BE THE ONLY POSSIBLE RESPONSIVE BIDDER HE CANCELLED THE SET-ASIDE PURSUANT TO ASPR 1-706.3(A) UPON THE GROUNDS THAT TO CONTINUE WOULD BE DETRIMENTAL TO THE PUBLIC INTEREST. OUR OFFICE HAS HELD THAT SUCH A DETERMINATION AS TO WHETHER A REASONABLE EXPECTATION OF SMALL BUSINESS COMPETITION EXISTS IS WITHIN THE AMBIT OF SOUND ADMINISTRATIVE DISCRETION AND WE WILL NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICER IN THE ABSENCE OF A CLEAR SHOWING OF ABUSE OF THE DISCRETION PERMITTED HIM. SEE 45 COMP. GEN. 228 (1965).

YOU CITE TWO DECISIONS (B-170778, DECEMBER 3, 1970, AND B-166879, MAY 27, 1969), IN WHICH THIS OFFICE HAS HELD THAT THE RECEIPT OF ONLY ONE RESPONSIVE BID WILL NOT INVALIDATE A SMALL BUSINESS SET-ASIDE. IT MUST BE EMPHASIZED AT THIS POINT THAT IN THE INSTANT CASE WHERE THE PROCUREMENT WAS CARRIED OUT ACCORDING TO THE TWO-STEP FORMAL ADVERTISING PROCEDURES PRESCRIBED BY ASPR 2-501, THE CONTRACTING OFFICER AT THE CULMINATION OF STEP ONE KNEW THAT ONLY ONE SMALL BUSINESS FIRM COULD POSSIBLY SUBMIT A RESPONSIVE BID. THIS WAS NOT THE CASE IN THE ABOVE-CITED DECISIONS, NEITHER OF WHICH DEAL WITH TWO-STEP PROCEDURES. IN BOTH THESE DECISIONS THE CONTRACTING OFFICER HAD A REASONABLE EXPECTATION THAT A NUMBER OF SMALL BUSINESS FIRMS WOULD SUBMIT BIDS RESPONSIVE TO THE INVITATION FOR BIDS. WE HAVE BEEN ABLE TO FIND NO DECISIONS IN WHICH THIS OFFICE HAS UPHELD A SMALL BUSINESS SET-ASIDE IN A SITUATION SIMILAR TO THE INSTANT ONE WHERE THE CONTRACTING OFFICER ISSUED AN INVITATION DESPITE THE EXISTENCE OF SPECIFIC INFORMATION THAT ONLY ONE SMALL BUSINESS FIRM COULD POSSIBLY BID.

IN THE INSTANT CASE THE CONTRACTING OFFICER PROCEEDED ACCORDING TO ASPR 2 -503.1(H) WHICH PROVIDES THAT WHEN DURING THE COURSE OF A TWO STEP ADVERTISED PROCUREMENT ONLY ONE ACCEPTABLE PROPOSAL IS RECEIVED HE MAY CONTINUE THE PROCESS BY NEGOTIATION ACCORDING TO ASPR 3 210.2(III). HOWEVER, ASPR 3-210.3 PRECLUDES THE USE OF THIS NEGOTIATION AUTHORITY IN SMALL BUSINESS RESTRICTED ADVERTISED PROCUREMENTS. THEREFORE THE CONTRACTING OFFICER WAS FACED WITH THE PROSPECT OF ISSUING AN INVITATION FOR BIDS FOR THE SECOND STEP OF THE TWO-STEP PROCESS TO ONLY ONE SMALL BUSINESS OFFEROR, ESPEY. IN VIEW OF THE FOREGOING WE CANNOT CONCLUDE THAT THE CONTRACTING OFFICER'S DECISION TO CANCEL THE SET-ASIDE PURSUANT TO ASPR 1-706.3(A) CONSTITUTED AN ABUSE OF HIS DISCRETION.

THEREFORE YOUR PROTEST MUST BE DENIED.