B-174526, FEB 11, 1972

B-174526: Feb 11, 1972

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THE CONTRACTING OFFICER'S DECISION IS SUPPORTED BY THE RECOMMENDATION OF THE TACOM SMALL BUSINESS SPECIALIST. WILL NOT QUESTION SUCH DETERMINATION ABSENT EVIDENCE OF DISCRETIONARY ABUSE. TO STEWART-WARNER CORPORATION: REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 11. IT IS YOUR VIEW THAT SINCE THE ARCTIC CLOSURE KIT IS A NEW ITEM. THERE IS NO PRIOR PROCUREMENT HISTORY TO INDICATE THAT THERE WILL BE ADEQUATE COMPETITION FROM SMALL BUSINESS FIRMS AND. A SUFFICIENT BASIS IS LACKING FOR A 100-PERCENT SMALL BUSINESS SET-ASIDE FOR THIS ITEM. SHALL BE SET ASIDE FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION *** IF THE CONTRACTING OFFICER DETERMINES THAT THERE IS REASONABLE EXPECTATION THAT BIDS FOR PROPOSALS WILL BE OBTAINED FROM A SUFFICIENT NUMBER OF RESPONSIBLE SMALL BUSINESS CONCERNS SO THAT AWARDS WILL BE MADE AT REASONABLE PRICES.

B-174526, FEB 11, 1972

BID PROTEST - SMALL BUSINESS SET-ASIDE - INITIAL PROCUREMENT DECISION DENYING THE PROTEST OF STEWART-WARNER CORPORATION AGAINST THE ESTABLISHMENT OF A SMALL BUSINESS SET-ASIDE UNDER AN IFB ISSUED BY THE ARMY TANK AUTOMOTIVE COMMAND (TACOM), WARREN, MICH., FOR A SUPPLY OF ARCTIC CLOSURE KITS. WHILE IT RECOGNIZES PAST PROCUREMENT HISTORY AS AN IMPORTANT CONSIDERATION, PARA. 1-706.5(A)(1) OF ASPR DOES NOT PRECLUDE THE AWARDING OF A TOTAL SMALL BUSINESS SET-ASIDE ON AN INITIAL PROCUREMENT. IN THE INSTANT CASE, THE CONTRACTING OFFICER'S DECISION IS SUPPORTED BY THE RECOMMENDATION OF THE TACOM SMALL BUSINESS SPECIALIST, AND THE COMP. GEN. WILL NOT QUESTION SUCH DETERMINATION ABSENT EVIDENCE OF DISCRETIONARY ABUSE.

TO STEWART-WARNER CORPORATION:

REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 11, 1971, PROTESTING THE SETTING ASIDE FOR ONLY SMALL BUSINESS PARTICIPATION A PROCUREMENT OF 285 ARCTIC CLOSURE KITS, PART NO. 11660300, UNDER INVITATION FOR BIDS (IFB) DAAE07-72-B-0052, ISSUED BY THE U.S. ARMY TANK-AUTOMOTIVE COMMAND (TACOM) WARREN, MICHIGAN.

YOUR PROTEST RAISES THE ISSUE OF WHETHER A TOTAL SMALL BUSINESS SET ASIDE CAN PROPERLY BE MADE ON THE INITIAL PROCUREMENT OF A SUPPLY ITEM. IT IS YOUR VIEW THAT SINCE THE ARCTIC CLOSURE KIT IS A NEW ITEM, THERE IS NO PRIOR PROCUREMENT HISTORY TO INDICATE THAT THERE WILL BE ADEQUATE COMPETITION FROM SMALL BUSINESS FIRMS AND, THEREFORE, A SUFFICIENT BASIS IS LACKING FOR A 100-PERCENT SMALL BUSINESS SET-ASIDE FOR THIS ITEM.

PARAGRAPH 1-706.5(A)(1) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) STATES, IN PERTINENT PART:

" *** THE ENTIRE AMOUNT OF AN INDIVIDUAL PROCUREMENT OR A CLASS OF PROCUREMENTS, INCLUDING BUT NOT LIMITED TO CONTRACTS FOR MAINTENANCE, REPAIR, AND CONSTRUCTION, SHALL BE SET ASIDE FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION *** IF THE CONTRACTING OFFICER DETERMINES THAT THERE IS REASONABLE EXPECTATION THAT BIDS FOR PROPOSALS WILL BE OBTAINED FROM A SUFFICIENT NUMBER OF RESPONSIBLE SMALL BUSINESS CONCERNS SO THAT AWARDS WILL BE MADE AT REASONABLE PRICES. TOTAL SET ASIDES SHALL NOT BE MADE UNLESS SUCH A REASONABLE EXPECTATION EXISTS. *** ALTHOUGH PAST PROCUREMENT HISTORY OF THE ITEM OR SIMILAR ITEMS IS ALWAYS IMPORTANT, IT IS NOT THE ONLY FACTOR WHICH SHOULD BE CONSIDERED IN DETERMINING WHETHER A REASONABLE EXPECTATION EXISTS."

WHILE THIS ASPR PROVISION RECOGNIZES THAT PAST PROCUREMENT HISTORY IS AN IMPORTANT MATTER FOR CONSIDERATION IN DETERMINING THE LIKELIHOOD OF A SUFFICIENT NUMBER OF BIDS FROM SMALL BUSINESS FIRMS, IT IS ALSO APPARENT THAT THE PROVISION DOES NOT CONTEMPLATE THAT A LACK OF PAST PROCUREMENT HISTORY MUST PRECLUDE A TOTAL SMALL BUSINESS SET-ASIDE WHEN OTHER FACTORS PROVIDE A REASONABLE BASIS FOR EXPECTING ADEQUATE COMPETITION FROM SMALL BUSINESS FIRMS.

IN THE INSTANT CASE, THE CONTRACTING OFFICER'S DETERMINATION THAT THE PROCUREMENT SHOULD BE SET ASIDE FOR SMALL BUSINESS FIRMS IS SUPPORTED BY THE RECOMMENDATION OF A TACOM SMALL BUSINESS SPECIALIST. THIS RECOMMENDATION IS SPECIFICALLY PREMISED ON FINDINGS THAT THE ARCTIC CLOSURE KIT IS NOT A COMPLEX ITEM; IS WELL WITHIN THE MANUFACTURING CAPABILITY OF SMALL BUSINESS CONCERNS; AND SMALL BUSINESS FIRMS HAVE ADEQUATELY COMPETED IN A PREVIOUS PROCUREMENT OF A SIMILAR KIT FOR THE SAME VEHICLE.

THE PRIOR IFB (NO. DAAE07-70-B-1083) WAS ISSUED ON AN UNRESTRICTED BASIS FOR THE INITIAL PROCUREMENT OF 2,665 WINTERIZATION KITS (PART NO. 11653667), 2,665 WINTERIZATION DOOR KITS (PART NO. 11653668), AND 485 ARCTIC KITS (PART NO. 11653669). THIS IFB RESULTED IN SIX BIDS. THE THREE LOWEST BIDS WERE FROM SMALL BUSINESS FIRMS WHICH ARE CONSIDERED TO BE RESPONSIBLE, AND THE REMAINING BIDS WERE SUBMITTED BY LARGE BUSINESSES. FURTHERMORE, THE CONTRACTING OFFICER REPORTS THAT WHILE THERE ARE DIFFERENCES IN THE RESPECTIVE ARCTIC KITS THEY DO NOT PRECLUDE MANUFACTURE OF THE KIT HERE INVOLVED BY SMALL BUSINESS CONCERNS AND, IF ANYTHING, THE ARCTIC KIT UNDER THE PRIOR IFB WAS MORE COMPLEX FROM A MANUFACTURING STANDPOINT THAN THE ARCTIC CLOSURE KIT REQUIRED UNDER THE PRESENT IFB.

OUR OFFICE HAS CONSISTENTLY HELD IN SUCH MATTERS THAT THE DETERMINATION AS TO WHETHER A REASONABLE EXPECTATION EXISTS FOR ADEQUATE COMPETITION FROM SMALL BUSINESS FIRMS 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. B-168534, JANUARY 16, 1970.

IN VIEW OF THE RECORD, AS OUTLINED ABOVE, WE CANNOT CONCLUDE THAT THERE WAS A LACK OF SUFFICIENT JUSTIFICATION FOR THE CONTRACTING OFFICER'S DECISION TO RESTRICT THE INSTANT PROCUREMENT TO SMALL BUSINESS PARTICIPATION.

YOU ALSO CONTEND THAT YOU SHOULD NOT BE EXCLUDED FROM COMPETING FOR THE AWARD BECAUSE OF THE ENGINEERING EFFORT EXPENDED BY YOUR FIRM TO DEVELOP THE ARCTIC CLOSURE KIT IN SUPPORT OF TACOM DESIGN REQUIREMENTS. IN THIS CONNECTION IT IS REPORTED THAT TACOM PERSONNEL DID NOT ASK YOU TO ASSIST IN THE DEVELOPMENT OF THE TECHNICAL DATA PACKAGE FOR THE KIT NOR, TO TACOM'S KNOWLEDGE, DID YOU FURNISH ANY ASSISTANCE DIRECTLY TO GOVERNMENT PERSONNEL IN THE DEVELOPMENT OF THE PACKAGE. INSTEAD, IT IS INDICATED THAT YOUR EFFORTS IN THE MATTER WERE FURNISHED TO ANOTHER FIRM WHICH HELD THE ENGINEERING SUPPORT CONTRACT FOR THE VEHICLE AND HAD BEEN DIRECTED TO GENERATE THE NECESSARY DOCUMENTATION FOR A COMPLETE PROCUREMENT TECHNICAL DATA PACKAGE. WE MUST THEREFORE CONCUR IN ARMY'S POSITION THAT THE ASSISTANCE YOU FURNISHED THE ENGINEERING SUPPORT CONTRACTOR SHOULD NOT PREJUDICE THE GOVERNMENT'S RIGHT TO PROCEED TO AWARD ON THE BASIS OF THE TOTAL SET ASIDE FOR SMALL BUSINESS CONCERNS.

ACCORDINGLY, YOUR PROTEST IS DENIED.