B-174292, APR 20, 1972

B-174292: Apr 20, 1972

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THE CONTRACTING OFFICER IS REQUIRED TO ACCEPT AN OFFEROR'S SELF-CERTIFICATION OF SMALL BUSINESS STATUS AT FACE VALUE UNLESS HE KNOWS THAT THE FIRM HAS PREVIOUSLY BEEN DECLARED INELIGIBLE FOR AWARD BY THE SMALL BUSINESS ADMINISTRATION. WHERE A PROCUREMENT IS URGENT. THAT ABC WAS IN FACT A SMALL BUSINESS AT THE TIME IT SO CERTIFIED. THE TERMS OF THE SOLICITATION HAVE BEEN SATISFIED AND THE PROTEST MUST BE DENIED. INC.: REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 7. WAS A 100 PERCENT SMALL BUSINESS SET-ASIDE WHICH REQUESTED LABOR AND MATERIALS NECESSARY TO PERFORM MESS ATTENDANT SERVICES IN SPECIFIED BUILDINGS AT THE REFERENCED ACTIVITY. WAS FOR "FOOD SERVICES". NEGOTIATIONS WERE CONCLUDED ON AUGUST 25.

B-174292, APR 20, 1972

BID PROTEST - TOTAL SMALL BUSINESS SET-ASIDE - ALLEGED IMPROPER SELF CERTIFICATION DECISION DENYING THE PROTEST OF JETS SERVICES, INC., AGAINST AWARD OF A TOTAL SMALL BUSINESS SET-ASIDE TO ABC MANAGEMENT SERVICES, INC., UNDER AN RFP ISSUED BY THE NAVAL AIR STATION, PENSACOLA, FLA., FOR "FOOD SERVICES." UNDER ASPR 1-703(A)(2), THE CONTRACTING OFFICER IS REQUIRED TO ACCEPT AN OFFEROR'S SELF-CERTIFICATION OF SMALL BUSINESS STATUS AT FACE VALUE UNLESS HE KNOWS THAT THE FIRM HAS PREVIOUSLY BEEN DECLARED INELIGIBLE FOR AWARD BY THE SMALL BUSINESS ADMINISTRATION. FURTHER, WHERE A PROCUREMENT IS URGENT, THE PROVISIONS OF ASPR 3-508.2(B) PROVIDE AN EXCEPTION TO THE REQUIREMENT OF ASPR 1-703(B)(1) THAT THE PROCURING ACTIVITY ALLOW FIVE WORKING DAYS FOR THE FILING OF A SIZE PROTEST. IN VIEW OF THE DETERMINATION OF THE SIZE APPEALS BOARD, THAT ABC WAS IN FACT A SMALL BUSINESS AT THE TIME IT SO CERTIFIED, THE TERMS OF THE SOLICITATION HAVE BEEN SATISFIED AND THE PROTEST MUST BE DENIED.

TO JETS SERVICES, INC.:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 7, 1971, PROTESTING THE AWARD OF A CONTRACT TO ABC MANAGEMENT SERVICES, INC., UNDER REQUEST FOR PROPOSALS (RFP) N00204-72-R-0003, ISSUED JULY 6, 1971, BY THE UNITED STATES NAVAL AIR STATION, PENSACOLA, FLORIDA.

THE SUBJECT RFP, WITH AN OFFER SUBMISSION DEADLINE OF JULY 27, 1971, WAS A 100 PERCENT SMALL BUSINESS SET-ASIDE WHICH REQUESTED LABOR AND MATERIALS NECESSARY TO PERFORM MESS ATTENDANT SERVICES IN SPECIFIED BUILDINGS AT THE REFERENCED ACTIVITY. THE SMALL BUSINESS DEFINITION APPLICABLE TO THE PROCUREMENT, AS SET FORTH BY SECTION 9.38 OF THE SUBJECT RFP, WAS FOR "FOOD SERVICES", WITH A STIPULATION THAT THE AVERAGE ANNUAL SALES OR RECEIPTS OF THE CONCERN AND ITS AFFILIATES FOR THE PRECEDING THREE FISCAL YEARS MUST NOT EXCEED $4 MILLION.

NEGOTIATIONS WERE CONCLUDED ON AUGUST 25, 1971, AND ABC MANAGEMENT SERVICES, INCORPORATED (ABC), WAS EVALUATED AS THE CONCERN PROPOSING THE MOST ADVANTAGEOUS OFFER TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.

UPON A DETERMINATION BY THE CONTRACTING OFFICER, DATED AUGUST 25, 1971, THAT IT WOULD NOT BE IN THE PUBLIC INTEREST TO DELAY THE AWARD SINCE THE STATION FOOD SERVICES COULD NOT OPERATE WITHOUT MESSMAN SERVICE, AND IT WAS ESSENTIAL THAT THESE SERVICES COMMENCE ON SEPTEMBER 1, 1971, THE AWARD OF CONTRACT N00204-72-C-0022, WAS ACCORDINGLY CONSUMMATED WITH ABC ON AUGUST 26. THEREFORE, A WRITTEN NOTICE SPECIFYING THE NAME AND LOCATION OF THE APPARENTLY SUCCESSFUL OFFEROR WAS NOT TRANSMITTED TO THE UNSUCCESSFUL OFFEROR PRIOR TO AWARD, SO AS TO PERMIT THE FILING OF ANY SIZE PROTESTS PRIOR TO AWARD. IT IS REPORTED THAT UNSUCCESSFUL OFFERORS WERE ADVISED OF THE AWARD TO ABC BY WRITTEN POST-AWARD NOTICE DATED AUGUST 26, 1971.

BY LETTER DATED SEPTEMBER 8, 1971 (8 WORKING DAYS FOLLOWING AWARD), YOU PROTESTED TO THE CONTRACTING OFFICER THAT THE SUCCESSFUL OFFEROR WAS NOT A SMALL BUSINESS. THE PROCURING ACTIVITY CLAIMS IT NEVER RECEIVED THIS LETTER, AND YOU WERE SO ADVISED ORALLY ON OCTOBER 6, 1971, ON WHICH DATE YOU TRANSMITTED ANOTHER LETTER PROTESTING ABC'S SIZE, AND ATTACHED A COPY OF YOUR SEPTEMBER 8 LETTER.

BY LETTER OF OCTOBER 7 YOU PROTESTED TO OUR OFFICE THAT ABC WAS INELIGIBLE FOR AWARD OF THE SUBJECT CONTRACT BECAUSE THE REGIONAL DIRECTOR OF THE SMALL BUSINESS ADMINISTRATION (SBA) IN DALLAS, TEXAS, HAD DETERMINED ON JUNE 18, 1971, THAT ABC WAS INELIGIBLE FOR SMALL BUSINESS SET-ASIDES. YOU ALLEGE THAT ABC HAD IMPROPERLY CONTINUED TO SELF-CERTIFY ITSELF AS A SMALL BUSINESS, AND THAT WHILE ABC HAD APPEALED TO THE SIZE APPEALS BOARD OF THE SBA IN WASHINGTON, D.C., THE DETERMINATION OF THE REGIONAL DIRECTOR IN DALLAS MUST STAND UNTIL OVERRULED BY THE SIZE APPEALS BOARD. ACCORDINGLY, YOU REQUESTED CANCELLATION OF THE CONTRACT AND AWARD TO THE LOWEST SMALL BUSINESS BIDDER.

PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1 703(B)(1)(C), PROVIDING THAT PROTESTS RECEIVED AFTER AWARD SHALL BE FORWARDED TO THE SBA DISTRICT OFFICE, AND THAT THE PROTESTANT BE NOTIFIED THAT HIS PROTEST HAS BEEN FORWARDED FOR CONSIDERATION IN FUTURE ACTIONS, THE CONTRACTING OFFICER, BY LETTERS DATED OCTOBER 12, 1971, FORWARDED YOUR PROTEST TO THE SBA IN DALLAS, AND SO ADVISED YOU IN WRITING.

A COMMUNICATION FROM THE CONTRACTING OFFICER TO THE SBA OFFICE IN DALLAS, DATED OCTOBER 27, EXPLAINED THAT ABC HAD REPRESENTED ITSELF AS A SMALL BUSINESS CONCERN IN ITS PROPOSAL DATED JULY 27, 1971, AND THAT THE CONTRACTING OFFICER ACCEPTED SUCH REPRESENTATION AT FACE VALUE. THE SBA OFFICE WAS REQUESTED TO FURNISH THE SIZE STATUS OF ABC AS OF THE DATE OF AWARD.

BY LETTER OF NOVEMBER 1, 1971, THE REGIONAL DIRECTOR IN DALLAS ADVISED THE CONTRACTING OFFICER THAT ON JUNE 18, 1971, HIS OFFICE HAD RENDERED A FORMAL DETERMINATION THAT ABC WAS OTHER THAN A SMALL BUSINESS WITH REGARD TO A FOOD SERVICE CONTRACT AT MATHER AIR FORCE BASE WHICH EMBODIED THE SAME SIZE CRITERIA. A COPY OF THAT DETERMINATION WAS ENCLOSED, AND THE CONTRACTING OFFICER WAS ADVISED THAT NO NEW INFORMATION HAD BEEN FURNISHED, NOR HAD THE REGIONAL DIRECTOR BEEN FORMALLY REQUESTED BY ABC TO RENDER A REVISED DETERMINATION. HOWEVER, HE ALSO ADVISED THAT AN APPEAL (FILED SEPTEMBER 20, 1971) WAS THEN BEFORE THE SIZE APPEALS BOARD IN WASHINGTON, D.C., BUT THAT NO DECISION BY THAT BOARD HAD YET BEEN RENDERED. CONSEQUENTLY, THE REGIONAL DIRECTOR HAD NO INFORMATION INDICATING, AS OF THE DATE OF HIS LETTER, THAT ABC'S SIZE ON THE DATE OF AWARD WAS OTHER THAN THAT FOUND IN HIS DETERMINATION OF JUNE 18, 1971.

ON NOVEMBER 17, 1971, THE SIZE APPEALS BOARD RENDERED A DECISION IN WHICH IT FOUND THAT ABC WAS IN FACT A SMALL BUSINESS ON JUNE 18, 1971, THE DATE OF THE DECISION OF THE DALLAS REGIONAL OFFICE. THE SIZE APPEALS BOARD FOUND THAT THE DALLAS REGIONAL OFFICE, IN REACHING ITS CONCLUSION THAT ABC WAS A LARGE BUSINESS BY VIRTUE OF AN AFFILIATION WITH ITS FRANCHISOR, ABC FOOD SERVICE, INC. (A LARGE BUSINESS), HAD ERRONEOUSLY DETERMINED, UNDER THE CRITERIA SET FORTH BY SECTION 121.3 2(A) OF THE SBA SIZE REGULATIONS, THAT ABC FOOD SERVICE, INC., CONTROLLED OR HAD THE POWER TO CONTROL ABC (ITS FRANCHISEE) SINCE, WHEN ALL APPROPRIATE FACTORS WERE CONSIDERED, THE EVIDENCE WOULD NOT SUPPORT SUCH A CONCLUSION.

WITH REGARD TO THE AWARD TO ABC, ASPR 1-703(A)(2) REQUIRES THAT A CONTRACTING OFFICER ACCEPT AT FACE VALUE, FOR THE PARTICULAR PROCUREMENT INVOLVED, A REPRESENTATION BY AN OFFEROR THAT IT IS A SMALL BUSINESS CONCERN. HOWEVER, ASPR 1-703(B) STIPULATES THAT A REPRESENTATION OF SMALL BUSINESS STATUS BY AN OFFEROR MAY NOT BE ACCEPTED BY THE CONTRACTING OFFICER IF IT IS KNOWN THAT SUCH CONCERN HAS PREVIOUSLY BEEN FINALLY DECLARED INELIGIBLE, BY THE SBA, AS A SMALL BUSINESS FOR THE ITEM OR SERVICE BEING PROCURED.

ASPR 1-703 THEREFORE EMPHASIZES KNOWLEDGE OF THE CONTRACTING OFFICER AS BEING DETERMINATIVE OF THE LEGALITY OF AN AWARD MADE PURSUANT TO AN OFFEROR'S SELF-CERTIFICATION. IN MAKING THAT CERTIFICATION, THE CONTRACTING OFFICER, IN THE ABSENCE OF A TIMELY PROTEST, IS CONSIDERED TO HAVE ACTED IN GOOD FAITH AND THEREBY CONSUMMATED A LEGAL AWARD IF HE POSSESSED NO INFORMATION THAT THE OFFEROR WAS A LARGE BUSINESS. B 167613, OCTOBER 22, 1969. SINCE THE RECORD IN THE INSTANT CASE FAILS TO INDICATE ANY KNOWLEDGE BY THE CONTRACTING OFFICER OF THE JUNE 18 DETERMINATION, OR ANY OTHER INFORMATION WHICH HE POSSESSED THAT MIGHT CAUSE HIM TO QUESTION THE STATUS OF ABC, THE ENSUING AWARD WAS MADE IN GOOD FAITH.

ASPR 1-703(B)(1) PROVIDES THAT IN PROCUREMENTS INVOLVING THE SUBMISSION OF PROPOSALS, THE CONTRACTING OFFICER SHALL NOTIFY APPARENTLY UNSUCCESSFUL OFFERORS IN WRITING OF THE IDENTITY OF THE APPARENTLY SUCCESSFUL OFFEROR, AND ALLOW AT LEAST FIVE WORKING DAYS IN WHICH ANY SIZE PROTEST ON THE INSTANT PROCUREMENT MAY BE FILED.

HOWEVER, THE CONTRACTING OFFICER IS ABSOLVED OF THIS DUTY, BY ASPR 3 508.2(B), IN THE CASE OF AN URGENT PROCUREMENT ACTION WHICH HE DETERMINES IN WRITING MUST BE AWARDED WITHOUT DELAY TO PROTECT THE PUBLIC INTEREST. SUCH A DETERMINATION WAS MADE IN THE INSTANT CASE, AND THE RECORD HAS BEEN APPROPRIATELY SO DOCUMENTED. THEREFORE, WHILE IT IS REGRETTABLE YOU WERE NOT ADVISED PRIOR TO AWARD THAT ABC WAS THE APPARENTLY SUCCESSFUL OFFEROR, TO ENABLE YOU TO PROTEST ITS SIZE BEFORE AWARD, WE ARE UNABLE TO DISCERN ANY IMPROPRIETY BY THE CONTRACTING OFFICER IN FAILING TO SO ADVISE.

WHILE YOUR PROTEST QUESTIONS WHETHER ABC COULD PROPERLY CERTIFY THAT IT WAS A SMALL BUSINESS, IN VIEW OF THE DECISION OF THE SIZE APPEALS BOARD IT WOULD APPEAR THAT SUCH WAS, IN FACT, THE CASE, AND THAT THE CONTRACT IS THEREFORE BEING PERFORMED BY A SMALL BUSINESS, AS CONTEMPLATED BY THE RFP. UNDER THE CIRCUMSTANCES, OUR OFFICE IS WITHOUT A BASIS UPON WHICH TO OBJECT TO THE AWARD.

ACCORDINGLY, YOUR PROTEST MUST BE DENIED.