B-173953(2), DEC 3, 1971

B-173953(2): Dec 3, 1971

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IT IS RECOMMENDED THAT CONSIDERATION BE GIVEN TO REVISING THE ARMED SERVICES PROCUREMENT REGULATION TO DISTINGUISH BETWEEN FORMALLY ADVERTISED AND NEGOTIATED PROCUREMENTS IN ESTABLISHING WHEN OFFERORS MUST HAVE CERTIFIED ELIGIBLE STATUS. SECRETARY: ENCLOSED IS A COPY OF OUR DECISION OF TODAY TO THE ATTORNEYS REPRESENTING GOLDEN INDUSTRIES. FIFTY PERCENT OF THE PROCUREMENT WAS SET ASIDE FOR LABOR SURPLUS AREA CONCERNS IN ACCORDANCE WITH THE CLAUSE "NOTICE OF LABOR SURPLUS AREA SET- ASIDE (1970 JUN)" (ARMED SERVICES PROCUREMENT REGULATION 1 804.2(B)(1)). THIS REQUIREMENT IS ONE OF RESPONSIVENESS THAT CANNOT BE SUPPLIED OR CORRECTED AFTER TIME FOR BID OPENING OR DATE FIXED FOR RECEIPT OF PROPOSALS.".

B-173953(2), DEC 3, 1971

BID PROTEST DENIED - RECOMMENDED CHANGE IN REGULATION FORWARDING COPY OF DECISION OF TODAY DENYING THE PROTEST OF GOLDEN INDUSTRIES, INC., UNDER AN RFP ISSUED BY THE ARMY AMMUNITION PROCUREMENT AND SUPPLY AGENCY. IT IS RECOMMENDED THAT CONSIDERATION BE GIVEN TO REVISING THE ARMED SERVICES PROCUREMENT REGULATION TO DISTINGUISH BETWEEN FORMALLY ADVERTISED AND NEGOTIATED PROCUREMENTS IN ESTABLISHING WHEN OFFERORS MUST HAVE CERTIFIED ELIGIBLE STATUS.

TO MR. SECRETARY:

ENCLOSED IS A COPY OF OUR DECISION OF TODAY TO THE ATTORNEYS REPRESENTING GOLDEN INDUSTRIES, INC., DENYING ITS PROTEST UNDER REQUEST FOR PROPOSALS DAAA09-71-R-0143, ISSUED BY THE ARMY AMMUNITION PROCUREMENT AND SUPPLY AGENCY, JOLIET, ILLINOIS.

FIFTY PERCENT OF THE PROCUREMENT WAS SET ASIDE FOR LABOR SURPLUS AREA CONCERNS IN ACCORDANCE WITH THE CLAUSE "NOTICE OF LABOR SURPLUS AREA SET- ASIDE (1970 JUN)" (ARMED SERVICES PROCUREMENT REGULATION 1 804.2(B)(1)). PARAGRAPH (D) OF THAT CLAUSE STATES THAT AN OFFEROR SEEKING PREFERENCE FOR CONSIDERATION OF THE SET-ASIDE AWARD AS A "CERTIFIED-ELIGIBLE" CONCERN "SHALL FURNISH WITH HIS OFFER EVIDENCE OF ITS CERTIFICATION *** ." THE IMPLEMENTING PROVISIONS OF PARAGRAPH 1 804.2 OF THE ARMY MATERIEL COMMAND PROCUREMENT INSTRUCTION EVEN MORE EXPLICITLY PROVIDE:

"A COPY OF THE DEPARTMENT OF LABOR'S CERTIFICATION MUST BE SUBMITTED WITH THE OFFER, IN ORDER TO QUALIFY FOR LABOR SURPLUS AREA PREFERENCE. THIS REQUIREMENT IS ONE OF RESPONSIVENESS THAT CANNOT BE SUPPLIED OR CORRECTED AFTER TIME FOR BID OPENING OR DATE FIXED FOR RECEIPT OF PROPOSALS."

ADDITIONALLY, OUR OFFICE HAS STATED THAT AN RFP REQUIREMENT "REGARDING THE SUBMISSION OF EVIDENCE OF CERTIFICATION *** IS ONE OF RESPONSIVENESS AS TO WHICH THE CRITICAL TIME IS *** THE DATE FIXED FOR RECEIPT OF PROPOSALS." 47 COMP. GEN. 543, 549 (1968).

THE INSTANT PROTEST AROSE FROM THE CONTRACTING OFFICER'S REJECTION OF A CERTIFICATE OF ELIGIBILITY WHICH WAS NOT SUBMITTED BY GOLDEN INDUSTRIES UNTIL GENERAL NEGOTIATIONS WERE BEING HELD FOLLOWING RECEIPT OF INITIAL PROPOSALS. WE WERE UNABLE TO CONCLUDE THAT THE CONTRACTING OFFICER'S ACTION WAS IMPROPER, IN VIEW OF THE APPLICABLE REGULATIONS AND THE ABOVE- QUOTED DECISION OF OUR OFFICE, WHICH HELD THAT THE FAILURE TO SUBMIT A CERTIFICATE OF ELIGIBILITY WITH A BID OR OFFER GOES TO THE RESPONSIVENESS OF THE BID OR OFFER, RATHER THAN TO THE RESPONSIBILITY OF THE BIDDER OR OFFEROR.

HOWEVER, OUR EXAMINATION OF THE PRINCIPAL ISSUE PRESENTED BY THE PRESENT PROTEST HAS LED US TO QUESTION THE ADVISABILITY OF APPLYING THE CONCEPT OF RESPONSIVENESS TO A REQUIREMENT FOR SUBMISSION OF EVIDENTIARY PROOF OF A STATUS WHICH AN OFFEROR IN FACT POSSESSES ON THE DATE SPECIFIED AS CONTROLLING. IT WOULD APPEAR, PARTICULARLY IN THE CASE OF NEGOTIATED PROCUREMENTS, THAT ANY OPPORTUNITY FOR UNFAIR COMPETITIVE ADVANTAGE, WHICH UNDERLIES THE CONCEPT OF RESPONSIVENESS, IS ABSENT WHEN AN OFFEROR SUBMITS A CERTIFICATE OF ELIGIBILITY DURING NEGOTIATIONS LEADING TO AWARD OF THE NON-SET-ASIDE PORTION OF THE PROCUREMENT. AT THAT POINT IN TIME, AND PRESUMABLY UP TO THE DATE OF AWARD OF THE NON-SET-ASIDE PORTION, THE OFFEROR WOULD LACK KNOWLEDGE OF THE NUMBER, IDENTITY AND PRICES OF HIS COMPETITORS AND WOULD NOT BE IN A POSITION TO ADVANCE HIS PRIORITY FOR NEGOTIATION OF THE SET-ASIDE IN LIGHT OF SUCH KNOWLEDGE, AND WE THEREFORE QUESTION WHETHER THE PURPOSE OF THE SET-ASIDE IS PROPERLY SERVED WHEN CERTIFICATES WHICH ARE RECEIVED UP TO THAT DATE ARE REJECTED.

IN VIEW OF THESE CONSIDERATIONS, WE RECOMMEND THAT CONSIDERATION BE GIVEN TO REVISING THE ARMED SERVICES PROCUREMENT REGULATION TO DISTINGUISH BETWEEN FORMALLY ADVERTISED AND NEGOTIATED PROCUREMENTS IN ESTABLISHING WHEN OFFERORS MUST HAVE CERTIFIED ELIGIBLE STATUS. BY LETTER OF TODAY, COPY ENCLOSED, I AM ALSO INFORMING THE DIRECTOR, FEDERAL PROCUREMENT REGULATIONS DIVISION, GENERAL SERVICES ADMINISTRATION, OF OUR POSITION.

I WOULD APPRECIATE BEING ADVISED OF THE VIEWS OF YOUR DEPARTMENT IN THIS MATTER AT THE EARLIEST PRACTICABLE DATE.