B-173857, JAN 13, 1972

B-173857, JAN 13, 1972

BID PROTEST - LABOR SURPLUS SET-ASIDE - DISCRETION OF CONTRACTING OFFICER DECISION DENYING PROTEST OF AMPEX CORPORATION AGAINST THE FAILURE TO PROVIDE FOR A LABOR SURPLUS AREA SET-ASIDE ON A PROPOSED PROCUREMENT UNDER AN RFQ ISSUED BY THE OKLAHOMA CITY AIR MATERIEL AREA, TINKER AFB, OKLA. BASED ON TECHNICAL ADVICE, THE CONTRACTING OFFICER DETERMINED THAT THE PROCUREMENT DID NOT MEET THE LABOR SURPLUS AREA SET-ASIDE REQUIREMENTS OF ASPR 1-804.1. THIS DETERMINATION WAS AFFIRMED BY THE SMALL BUSINESS SPECIALIST. GENERALLY, THE CONTRACTING OFFICER IS ALLOWED WIDE DISCRETION IN DETERMINING WHETHER A PROCUREMENT WILL BE LIMITED TO SPECIFIC AREAS OF THE COUNTRY OR TO PARTICULAR TYPES OF BIDDERS. IN THE INSTANT CASE, THERE IS NO EVIDENCE TO SHOW THAT THE CONTRACTING OFFICER ABUSED THIS DISCRETIONARY POWER AND, ACCORDINGLY, THE PROTEST MUST BE DENIED.

TO AMPEX CORPORATION:

REFERENCE IS MADE TO YOUR LETTER DATED AUGUST 12, 1971, WITH ENCLOSURES, AND SUBSEQUENT CORRESPONDENCE PROTESTING THE FAILURE TO PROVIDE FOR A SET- ASIDE FOR LABOR SURPLUS AREA CONCERNS ON A PROPORTION OF THE PROPOSED PROCUREMENT UNDER REQUEST FOR QUOTATIONS NO. Q-1063, ISSUED BY THE OKLAHOMA CITY AIR MATERIEL AREA (OCAMA), TINKER AIR FORCE BASE, OKLAHOMA.

THE SOLICITATION, WHICH WAS ISSUED ON JULY 29, 1971, CALLS FOR TWO ITEMS OF RECORDER/REPRODUCER SIGNAL DATA SETS (SIX UNITS PER ITEM, FOR A TOTAL OF TWELVE UNITS). THE DEADLINE FOR SUBMISSION OF OFFERS WAS AUGUST 20, 1971. AWARD IS BEING HELD UP PENDING OUR DECISION.

ALL PRIOR PURCHASES OF LIKE EQUIPMENT BY OCAMA IN THE PRECEDING TWO YEARS HAD BEEN FROM AMPEX CORPORATION AND BELL & HOWELL COMPANY. BASED ON THIS INFORMATION, THE CONTRACTING OFFICER EXPECTED TO RECEIVE OFFERS FROM ONLY THESE TWO CONCERNS; BELL & HOWELL, WHICH WAS LOCATED IN A LABOR SURPLUS AREA AND AMPEX CORPORATION, WHICH WAS NOT. ASPR 1 804.1(A)(1)(II) PROVIDES THAT PARTIAL SET ASIDE SHALL NOT BE MADE IF THERE IS A REASONABLE EXPECTATION THAT BIDS OR PROPOSALS WILL BE RECEIVED FROM ONLY TWO CONCERNS WITH TECHNICAL COMPETENCY AND PRODUCTIVE CAPACITY (ONE CONCERN WHICH WILL NOT QUALIFY AS A LABOR SURPLUS AREA CONCERN AND ONE CONCERN WHICH WILL QUALIFY AS A LABOR SURPLUS AREA CONCERN), THEREFORE, NO SET ASIDE WAS CONTEMPLATED. HOWEVER, WE UNDERSTAND THAT SUBSEQUENT TO THIS DETERMINATION YOUR FIRM OBTAINED A CERTIFICATE OF ELIGIBILITY FOR LABOR SURPLUS AREA PREFERENCE AS RESULT OF ACQUIRING FACILITIES IN SANDOVAL, NEW MEXICO.

IN ADDITION, TECHNICAL ADVICE RECEIVED BY THE CONTRACTING OFFICER WAS TO THE EFFECT THAT THE PROCUREMENT OF SIX UNITS OF EACH LINE ITEM WAS NOT DIVISIBLE INTO TWO ECONOMIC PRODUCTION RUNS AS REQUIRED BY ASPR 1 804.1(A)(1)(I). DIVIDING THE PROCUREMENT INTO SMALLER LOTS WAS EXPECTED TO RESULT IN HIGHER UNIT PRICES.

BASED ON THE FOREGOING, IT WAS DETERMINED THAT THE PROCUREMENT DID NOT MEET THE LABOR SURPLUS AREA SET-ASIDE REQUIREMENTS OF ASPR 1 804.1. THIS DETERMINATION WAS CONCURRED IN BY THE SMALL BUSINESS SPECIALIST.

ON AUGUST 3, 1971, THE CHIEF OF THE GROUND ELECTRONICS AND METEOROLOGICAL SECTION OF THE DIRECTORATE OF MATERIEL MANAGEMENT REQUESTED THAT THE REQUIREMENT BE AWARDED "ALL OR NONE" TO ALLOW FOR THE INTERCHANGEABILITY OF ELECTRONICS, INCLUDING AMPLIFIERS, RECORD AND REPRODUCE HEADS AND DUBBING OF TAPES. PURSUANT TO THIS REQUEST, AN AMENDMENT WAS ISSUED ON AUGUST 3, 1971, PROVIDING FOR A SINGLE AWARD ON AN AGGREGATE BASIS.

YOUR PRINCIPAL CONTENTION IS THAT THE INVITATION WAS WRONGFULLY ISSUED IN THAT IT FAILED TO PROVIDE A SET-ASIDE FOR LABOR SURPLUS AREA CONCERNS. YOU DENY THAT THE QUANTITY TO BE PURCHASED IS NOT DIVISIBLE INTO TWO ECONOMIC PRODUCTION RUNS. IN SUPPORT THEREOF, YOU HAVE DOCUMENTED NUMEROUS INDIVIDUAL PROCUREMENTS OF SIMILAR EQUIPMENT IN QUANTITIES LESS THAN HALF THAT INVOLVED IN THE PRESENT CASE.

WHILE IT IS THE POLICY OF THE GOVERNMENT TO AWARD A FAIR PROPORTION OF PURCHASES OF SUPPLIES AND SERVICES TO SMALL BUSINESS AND LABOR SURPLUS AREA CONCERNS, WHETHER A CERTAIN PROCUREMENT SHOULD BE SET ASIDE IN WHOLE OR IN PART FOR SMALL BUSINESS OR LABOR SURPLUS AREA CONCERNS IS FOR DETERMINATION BY THE ADMINISTRATIVE AGENCY INVOLVED. WE DO NOT THINK THAT THE APPLICABLE PROVISIONS OF ASPR MAKE IT MANDATORY THAT THERE BE SET ASIDE FOR LABOR SURPLUS AREA CONCERNS ANY PARTICULAR PROCUREMENT. CF 43 COMP. GEN. 657, 659 (1964); 41 ID. 351 (1961). WE HAVE ALSO STATED THAT EVEN WHERE WE MAY NOT AGREE WITH SUCH A DETERMINATION, " *** WE ARE RELUCTANT TO SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICER IN THE ABSENCE OF A CLEAR SHOWING OF ABUSE OF THE DISCRETION PERMITTED HIM." 45 COMP. GEN. 228, 231 (1965). IT SHOULD ALSO BE NOTED THAT OUR JURISDICTION IN THE MATTER OF AWARD OF GOVERNMENT CONTRACTS IS PRINCIPALLY TO INSURE THAT SUCH CONTRACTS ARE AWARDED IN CONFORMANCE WITH APPLICABLE LAWS AND REGULATIONS. BEYOND THAT, WE HAVE NO AUTHORITY TO DIRECT THE PLACEMENT OF INDIVIDUAL GOVERNMENT CONTRACTS IN DESIGNATED AREAS OF THE COUNTRY OR WITH PARTICULAR TYPES OF BIDDERS, OR ON ANY OTHER BASIS THAN AS REQUIRED BY LAW. SEE B-170285, NOVEMBER 10, 1970. B-172963, AUGUST 5, 1971.

WE DO NOT AGREE THAT THE DIVISIBILITY OF THE INSTANT PROCUREMENT INTO TWO ECONOMIC PRODUCTION RUNS IS DEMONSTRATED BY A NUMBER OF PROCUREMENTS OF THE SAME TYPE OF ITEM IN QUANTITIES OF ONE, TWO AND THREE. THE PROCURING ACTIVITY IS NOT PRECLUDED FROM SATISFYING A LEGITIMATE SUPPLY REQUIREMENT SIMPLY BECAUSE THE QUANTITY NEEDED REPRESENTS LESS THAN AN ECONOMIC PRODUCTION RUN. HOWEVER, THE STANDARDS APPLICABLE TO PARTIAL LABOR SURPLUS DO REQUIRE SUCH ECONOMIC DIVISIBILITY WHICH, IN OUR VIEW, IS NOT ESTABLISHED BY THE PROCUREMENTS CITED BY YOU.

ACCORDINGLY, YOUR PROTEST MUST BE DENIED. IN VIEW OF OUR CONCLUSION ON THE SET-ASIDE, WE DO NOT FIND IT NECESSARY TO CONSIDER WHETHER AN AGGREGATE AWARD TO A SINGLE SOURCE IS JUSTIFIABLE ON THE ..END :