B-174680, MAY 10, 1972, 51 COMP GEN 719

B-174680: May 10, 1972

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PROPERLY WAS A VALUATED AS A GROUP 7 PRIORITY BIDDER - A SMALL BUSINESS CONCERN THAT IS NOT LOCATED IN A LABOR SURPLUS AREA - AND. NOT ENTITLED TO PRIORITY IN NEGOTIATIONS SINCE THE SUBMISSION WITH A BID OF A CERTIFICATE OF ELIGIBILITY FOR FIRST PREFERENCE IS A MATTER OF RESPONSIVENESS AND IS REQUIRED FOR DETERMINATION OF BIDDER ELIGIBILITY FOR AN AWARD OF A LABOR SURPLUS AREA SET-ASIDE. AN AWARD TO THE ONLY OTHER GROUP 7 BIDDER ON THE BASIS OF BEING THE LOW BIDDER ON THE SAME ITEM IN THE UNRESTRICTED PORTION OF THE IFB IS APPROPRIATE. CONTRACTS - AWARDS - LABOR SURPLUS AREAS - CERTIFICATE OF ELIGIBILITY - VALIDITY DETERMINATION WHERE THE CONTRACTING OFFICER KNEW A FIRST PREFERENCE ELIGIBILITY CERTIFICATE SUBMITTED UNDER A LABOR SURPLUS AREA SET-ASIDE WAS INVALID.

B-174680, MAY 10, 1972, 51 COMP GEN 719

CONTRACTS - AWARDS - LABOR SURPLUS AREAS - CERTIFICATE OF ELIGIBILITY - SUBMISSION WITH BID REQUIREMENT A SMALL BUSINESS CONCERN THAT FAILED TO SUBMIT A CURRENT CERTIFICATION OF FIRST PREFERENCE ELIGIBILITY STATUS WITH ITS BID UNDER THE LABOR SURPLUS AREA SET-ASIDE PORTION OF A PROCUREMENT FOR AIR CONDITIONERS TO EVIDENCE COMMITMENT TO EMPLOYING DISADVANTAGED INDIVIDUALS AS REQUIRED BY THE INVITATION FOR BIDS (IFB) IN ACCORDANCE WITH PARAGRAPH 1-804.2(D) OF THE ARMED SERVICES PROCUREMENT REGULATION, PROPERLY WAS A VALUATED AS A GROUP 7 PRIORITY BIDDER - A SMALL BUSINESS CONCERN THAT IS NOT LOCATED IN A LABOR SURPLUS AREA - AND, THEREFORE, NOT ENTITLED TO PRIORITY IN NEGOTIATIONS SINCE THE SUBMISSION WITH A BID OF A CERTIFICATE OF ELIGIBILITY FOR FIRST PREFERENCE IS A MATTER OF RESPONSIVENESS AND IS REQUIRED FOR DETERMINATION OF BIDDER ELIGIBILITY FOR AN AWARD OF A LABOR SURPLUS AREA SET-ASIDE. THEREFORE, AN AWARD TO THE ONLY OTHER GROUP 7 BIDDER ON THE BASIS OF BEING THE LOW BIDDER ON THE SAME ITEM IN THE UNRESTRICTED PORTION OF THE IFB IS APPROPRIATE. CONTRACTS - AWARDS - LABOR SURPLUS AREAS - CERTIFICATE OF ELIGIBILITY - VALIDITY DETERMINATION WHERE THE CONTRACTING OFFICER KNEW A FIRST PREFERENCE ELIGIBILITY CERTIFICATE SUBMITTED UNDER A LABOR SURPLUS AREA SET-ASIDE WAS INVALID, THE PRECEDENT ESTABLISHED IN 50 COMP. GEN. 559 IS NOT FOR APPLICATION, FOR ALTHOUGH IN THAT DECISION THE AWARD WAS MADE ON THE BASIS OF AN INVALID LABOR SURPLUS AREA CERTIFICATE, THE CERTIFICATE WAS ACCEPTED IN GOOD FAITH BY THE CONTRACTING OFFICER AND, THEREFORE, THE CONTRACT AWARDED WAS NOT VOID AB INITIO BUT ONLY VOIDABLE AT THE OPTION OF THE GOVERNMENT AND THE CANCELLATION OF THE AWARD WAS NOT NECESSARY.

TO THE THERM-AIR MANUFACTURING COMPANY, INC., MAY 10, 1972:

WE REFER TO YOUR LETTER OF DECEMBER 22, 1971, PROTESTING AGAINST AWARD OF A CONTRACT UNDER INVITATION FOR BIDS (IFB) NO. DSA400-72-B 1003, ISSUED AUGUST 20, 1971, BY THE DIRECTORATE OF PROCUREMENT AND PRODUCTION, DEFENSE GENERAL SUPPLY CENTER (DGSC), RICHMOND, VIRGINIA, FOR 13 LINE ITEMS OF MECHANICALLY REFRIGERATED AIR CONDITIONERS. THE PROTEST PERTAINS TO LINE ITEM 10 WHICH WAS SET ASIDE FOR AWARD TO LABOR SURPLUS AREA CONCERNS.

AWARD OF THE LABOR SURPLUS AREA SET-ASIDE PORTION OF THE PROCUREMENT WAS GOVERNED BY THE PRIORITIES ESTABLISHED IN CLAUSE C8-3 OF THE IFB, IN PART, AS FOLLOWS:

NEGOTIATIONS FOR AWARD OF THE SET-ASIDE PORTION WILL BE CONDUCTED ONLY WITH LABOR SURPLUS AREA CONCERNS (AND SMALL BUSINESS CONCERNS TO THE EXTENT INDICATED BELOW) WHO HAVE SUBMITTED RESPONSIVE BIDS *** ON THE NON- SET-ASIDE PORTION AT A UNIT PRICE NO GREATER THAN 130 PERCENT OF THE HIGHEST UNIT PRICE AT WHICH AN AWARD IS MADE ON THE NON-SET ASIDE PORTION. *** NEGOTIATIONS FOR THE SET-ASIDE PORTION WILL BE CONDUCTED WITH SUCH BIDDERS IN THE FOLLOWING ORDER OF PRIORITY:

GROUP 1. CERTIFIED-ELIGIBLE CONCERNS WITH A FIRST PREFERENCE WHICH ARE ALSO SMALL BUSINESS CONCERNS.

GROUP 2. OTHER CERTIFIED-ELIGIBLE CONCERNS WITH A FIRST PREFERENCE.

GROUP 3. CERTIFIED-ELIGIBLE CONCERNS WITH A SECOND PREFERENCE WHICH ARE ALSO SMALL BUSINESS CONCERNS.

GROUP 4. OTHER CERTIFIED-ELIGIBLE CONCERNS WITH A SECOND PREFERENCE.

GROUP 5. PERSISTENT OR SUBSTANTIAL LABOR SURPLUS AREA CONCERNS WHICH ARE ALSO SMALL BUSINESS CONCERNS.

GROUP 6. OTHER PERSISTENT OR SUBSTANTIAL LABOR SURPLUS AREA CONCERNS.

GROUP 7. SMALL BUSINESS CONCERNS WHICH ARE NOT LABOR SURPLUS AREA CONCERNS.

BIDDERS WERE ALSO REQUIRED TO SUBMIT DGSC FORM 350, PRODUCTION FACILITIES AND TRANSPORTATION DATA, IN WHICH THE FOLLOWING STATEMENT WAS INCLUDED IN SECTION B:

LABOR SURPLUS AREA OR PARTIAL SMALL BUSINESS SET-ASIDES.

1. IF A PORTION OF THE PROCUREMENT HAS BEEN SET ASIDE FOR LABOR SURPLUS AREA OR SMALL BUSINESS CONCERNS AND IF THE OFFEROR DESIRES TO BE CONSIDERED FOR AWARD OF SUCH SET-ASIDE PORTION AS A LABOR SURPLUS AREA CONCERN, THE OFFEROR MUST:

A. FURNISH WITH HIS OFFER EVIDENCE THAT HE OR HIS FIRST-TIER SUBCONTRACTOR IS A CERTIFIED CONCERN IN ACCORDANCE WITH 29 CFR 8.7(B) (ASPR) 1-801.1(I) AND IDENTIFY BELOW THE ADDRESS IN OR NEAR A "SECTION OF CONCENTRATED UNEMPLOYMENT OR UNDEREMPLOYMENT," AS CLASSIFIED BY THE SECRETARY OF LABOR, AT WHICH THE COSTS HE WILL INCUR ON ACCOUNT OF MANUFACTURING OR PRODUCTION (BY HIMSELF IF A CERTIFIED CONCERN OR BY CERTIFIED CONCERNS ACTING AS FIRST-TIER SUBCONTRACTORS) AMOUNT TO MORE THAN 25 PERCENT OF THE CONTRACT PRICE.

UNDER THE SECTION ENTITLED "PRIME MANUFACTURER COSTS," THERM-AIR IDENTIFIED ITS PLANT IN NEWARK, N.J., AND INDICATED THAT 26 PERCENT OF THE MANUFACTURING OR PRODUCTION COSTS FOR THE ITEMS SET ASIDE FOR LABOR SURPLUS AREA CONCERNS WOULD BE INCURRED AT THAT PLANT. THE FOLLOWING REQUIREMENT WAS ALSO MADE IN SECTION B OF THE FORM:

2. FAILURE TO IDENTIFY THE LOCATIONS AS SPECIFIED ABOVE WILL PRECLUDE CONSIDERATION OF THE OFFEROR AS A LABOR SURPLUS AREA CONCERN. ADDITION, IF ELIGIBILITY IS BASED ON STATUS AS A CERTIFIED-ELIGIBLE CONCERN, FAILURE TO FURNISH EVIDENCE OF ELIGIBILITY WILL PRECLUDE CONSIDERATION OF THE OFFEROR AS A CERTIFIED-ELIGIBLE CONCERN. *** .

HEAT EXCHANGERS, INC. (HEAT EXCHANGERS), A SMALL BUSINESS CONCERN, QUALIFIED FOR GROUP 7 PRIORITY FOR THE SET-ASIDE PORTION. HOWEVER, THERM- AIR STATED IN THE COVER LETTER SUBMITTED WITH ITS BID THAT, AS A SMALL BUSINESS FIRM IN A LABOR SURPLUS AREA, IT WAS ENTITLED TO GROUP 1 PRIORITY FOR NEGOTIATIONS. DURING EVALUATION OF THE BIDS, PROCUREMENT OFFICIALS NOTED THAT THE CERTIFICATE OF ELIGIBILITY FURNISHED BY THERM AIR IN SUPPORT OF ITS CLAIM TO GROUP 1 PRIORITY EXPIRED ON AUGUST 10, 1971, MORE THAN A MONTH BEFORE OPENING OF BIDS. IN AN INFORMAL CONVERSATION IN NOVEMBER 1971, THE CONTRACTING OFFICER MENTIONED TO A REPRESENTATIVE OF THERM-AIR THAT ITS CERTIFICATE OF ELIGIBILITY EXPIRED BEFORE OPENING OF BIDS AND THAT THERM-AIR COULD NOT BE CONSIDERED FOR GROUP 1 PREFERENCE FOR NEGOTIATIONS. SUBSEQUENTLY, IN A LETTER OF NOVEMBER 16, 1971, THERM-AIR SUBMITTED A "CURRENT" CERTIFICATE OF ELIGIBILITY, EFFECTIVE NOVEMBER 12, 1971, THROUGH MAY 12, 1972. IN A SECOND LETTER OF NOVEMBER 24, 1971, THERM-AIR SUBMITTED A "CORRECTED COPY" OF THE CERTIFICATE OF ELIGIBILITY, EFFECTIVE AUGUST 11, 1971, THROUGH FEBRUARY 11, 1972. THE ACCOMPANYING LETTER STATED THAT THE "CORRECTION WAS INITIATED BY THE NEW JERSEY STATE EMPLOYMENT SERVICE TO CORRECT AN ERROR THEY MADE ON THEIR PREVIOUS ISSUANCE OF THIS CERTIFICATE." THE CONTRACTING OFFICER CONCLUDED THAT THERM-AIR REMAINED INELIGIBLE FOR GROUP 1 PREFERENCE BECAUSE IT DID NOT SUBMIT EVIDENCE OF ITS ELIGIBILITY AT THE TIME OF BID OPENING. FURTHER, IT WAS DETERMINED THAT THERM-AIR DID NOT QUALIFY FOR GROUP 5 PREFERENCE AS A FIRM IN A PERSISTENT OR SUBSTANTIAL LABOR SURPLUS AREA BECAUSE IT DID NOT INDICATE THAT IT WOULD PERFORM 50 PERCENT OF THE CONTRACT IN AN AREA OF PERSISTENT OR SUBSTANTIAL LABOR SURPLUS AS REQUIRED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-804.2. THEREFORE, THE CONTRACTING OFFICER CONCLUDED THAT THERM-AIR WAS IN GROUP 7 PRIORITY AS A SMALL BUSINESS CONCERN NOT LOCATED IN A LABOR SURPLUS AREA.

BECAUSE ONLY HEAT EXCHANGERS AND THERM-AIR SUBMITTED UNIT BIDS ON ITEM 0010 WHICH WERE NO GREATER THAN 130 PERCENT OF THE HIGHEST UNIT PRICE AT WHICH AN AWARD WAS MADE ON THE UNRESTRICTED PORTION OF THE IFB, ONLY THESE FIRMS WERE ELIGIBLE FOR THE SET-ASIDE PORTION. NEGOTIATIONS WERE SUBSEQUENTLY INITIATED WITH BOTH FIRMS ACCORDING TO THEIR RANK AS LOW BIDDERS UNDER GROUP 7 PRIORITY FOR SMALL BUSINESS CONCERNS NOT IN LABOR SURPLUS AREAS. THEREFORE, THE SET-ASIDE PORTION OF ITEM 0010 WAS OFFERED TO HEAT EXCHANGERS AS LOW BIDDER ON THE SAME ITEM IN THE UNRESTRICTED PORTION OF THE IFB.

THERM-AIR PROTESTS AGAINST THE PROPOSED AWARD TO HEAT EXCHANGERS OF ITEM 0010, OFFERED UNDER GROUP 7 PRIORITY, BECAUSE IT ALLEGES THAT THE ITEM SHOULD HAVE BEEN OFFERED TO IT UNDER GROUP 1 PRIORITY AS A PROPERLY CERTIFIED SMALL BUSINESS CONCERN IN A LABOR SURPLUS AREA. AS PART OF ITS PROTEST, THERM-AIR ALSO CONTENDS THAT THE PROVISIONS OF IFB AND THEIR INTERPRETATION BY DGSC ARE NOT CONSISTENT WITH CONGRESSIONAL POLICY AND DIRECTIVES OF THE DEPARTMENT OF LABOR FOR PROCUREMENTS SET ASIDE FOR LABOR SURPLUS AREAS.

PORTIONS OF PROCUREMENTS ARE SET ASIDE FOR LABOR SURPLUS AREAS UNDER THE BROAD LANGUAGE OF THE DEFENSE PRODUCTION ACT OF 1950 (50 U.S.C.A. APP. 2062, AS AMENDED) IN WHICH CONGRESS DIRECTED THAT DEPARTMENTS AND AGENCIES SHALL APPLY, "WHEN PRACTICABLE AND CONSISTENT WITH EXISTING LAW AND THE DESIRABILITY FOR MAINTAINING A SOUND ECONOMY, THE PRINCIPLE OF THE GEOGRAPHICAL DISPERSAL OF SUCH FACILITIES IN THE INTEREST OF NATIONAL DEFENSE." IN DEFENSE MANPOWER POLICY NO. 4 (DMP-4), 32A CFR CH. 1, THE POLICY OF ENCOURAGING THE AWARDING OF CONTRACTS IN SECTIONS OF CONCENTRATED UNEMPLOYMENT OR UNDEREMPLOYMENT AND IN AREAS OF PERSISTENT OR SUBSTANTIAL LABOR SURPLUS WAS IMPLEMENTED BY ASSIGNING TO THE SECRETARY OF LABOR SPECIFIC DUTIES, INCLUDING CLASSIFYING AREAS OF UNEMPLOYMENT AND ESTABLISHING REGULATIONS FOR THE ORDER OF PREFERENCE UNDER WHICH CONTRACTS SHOULD BE AWARDED TO BIDDERS. THE FOLLOWING DUTY IS ALSO ASSIGNED TO THE SECRETARY OF LABOR:

CERTIFY EMPLOYING ESTABLISHMENTS WHICH HAVE AGREED TO PERFORM CONTRACTS IN OR NEAR SECTIONS OF CONCENTRATED UNEMPLOYMENT OR UNDEREMPLOYMENT AND WHICH HAVE AGREED TO COMPLY WITH REGULATIONS OF THE SECRETARY OF LABOR WITH RESPECT TO THE EMPLOYMENT OF DISADVANTAGED APPLICANTS.

THE POLICY IS FURTHER IMPLEMENTED IN 29 CFR PART 8, IN WHICH DEFINITIONS AND SPECIFIC CRITERIA ARE ESTABLISHED. IN SECTION 8.9 PROCEDURES FOR CERTIFYING A FIRM'S PLAN TO EMPLOY DISADVANTAGED INDIVIDUALS ARE PROVIDED, INCLUDING THE FOLLOWING:

(B) CERTIFICATES OF ELIGIBILITY SHALL BE VALID FOR A PERIOD OF 6 MONTHS

(C) NO CERTIFICATE WHICH WOULD AFFORD AN EMPLOYING ESTABLISHMENT FIRST PREFERENCE UNDER SEC 8.8 SHALL BE ISSUED TO ANY ESTABLISHMENT WHOSE PLANS FOR THE EMPLOYMENT OF DISADVANTAGED INDIVIDUALS DO NOT PROVIDE THAT AT LEAST 25 PERCENT OF THE TOTAL NUMBER OF NEW HIRES EACH MONTH BEGINNING WITH THE DATE OF CERTIFICATION AND CONTINUING UNTIL THE EXPIRATION OF THE VALIDITY PERIOD OR COMPLETION OF AN AWARDED CONTRACT OR SUBCONTRACT WHICHEVER IS LATER SHALL BE DISADVANTAGED INDIVIDUALS IDENTIFIED AND REFERRED TO THE EMPLOYING ESTABLISHMENT PURSUANT TO SEC 8.7(B).

FINALLY, IN TRAINING AND EMPLOYMENT SERVICE PROGRAM LETTER NO. 2558, FEBRUARY 27, 1970, GUIDELINES FOR CERTIFYING FIRMS FOR PREFERENCE UNDER DMP-4 WERE EXPLAINED, INCLUDING THE FOLLOWING REQUIREMENTS FOR CERTIFICATION:

TO BE ELIGIBLE FOR FIRST OR SECOND PREFERENCE, AN EMPLOYER MUST SUBMIT WITH HIS BID A COPY OF CERTIFICATE OF PREFERENCE ISSUED BY THE DEPARTMENT OF LABOR OR ITS AUTHORIZED REPRESENTATIVE TO THE BIDDING EMPLOYER *** . TO BE CERTIFIED IN THE FIRST OR SECOND PREFERENCE GROUP, AN EMPLOYER MUST MEET THE CONDITIONS OUTLINED BELOW:

A. FIRST PREFERENCE GROUP CERTIFICATE

2. IRRESPECTIVE OF WHETHER A CONTRACT IS AWARDED AS A RESULT OF THE CERTIFICATION, THE EMPLOYER MUST AGREE, IN WRITING, TO COMPLY WITH THE FOLLOWING PROVISIONS:

A. THE EMPLOYER WILL HIRE, IN THE CERTIFIED ESTABLISHMENT, A PROPORTION OF DISADVANTAGED RESIDENTS FROM THE CLASSIFIED LABOR SURPLUS AREA EQUALING AT LEAST 25 PERCENT OF THE TOTAL NEW HIRES EACH MONTH, BEGINNING WITH THE FIRST FULL MONTH FOLLOWING THE DATE OF CERTIFICATION AND CONTINUING UNTIL THE EXPIRATION OF THE VALIDITY PERIOD OF THE CERTIFICATE OR THE COMPLETION OF AN AWARDED CONTRACT OR SUBCONTRACT, WHICHEVER IS LATER. ***

C. THE EMPLOYER WILL FURNISH THE CERTIFYING ES OFFICE, BY THE TENTH OF EACH MONTH, A REPORT OF NEW HIRE ACTIVITY FOR THE PREVIOUS CALENDAR MONTH. *** .

OUR OFFICE HAS HELD CONSISTENTLY THAT SUBMISSION WITH THE BID OF A BIDDER'S CERTIFICATE OF ELIGIBILITY FOR FIRST PREFERENCE IS A MATTER OF RESPONSIVENESS AND REQUIRED FOR EVALUATION OF A BIDDER'S ELIGIBILITY FOR AWARD OF THAT PORTION OF A PROCUREMENT SET ASIDE FOR LABOR SURPLUS AREA CONCERNS. SEE 47 COMP. GEN. 543. (1968), 51 COMP. GEN. 344 (1971). THE REQUIREMENT STATED IN THE IFB THAT THE CERTIFICATE MUST BE SUBMITTED WITH THE BID IS IN ACCORDANCE WITH ASPR 1.804.2(D) WHICH IS SIMILAR TO THE LANGUAGE, QUOTED ABOVE, IN THE REGULATIONS OF THE DEPARTMENT OF LABOR. CONSIDER THE ASPR REGULATION CONSISTENT BOTH WITH CONGRESSIONAL POLICY AND REGULATIONS OF THE DEPARTMENT OF LABOR. IN THIS REGARD, WHEN ACQUIRING A PRIVILEGED NEGOTIATING POSITION, THE CERTIFIED-ELIGIBLE BIDDER WITH FIRST PREFERENCE, WHETHER OR NOT HE IS PERFORMING A CONTRACT, COMMITS HIMSELF TO HIRING DISADVANTAGED INDIVIDUALS FOR 25 PERCENT OF ALL POSITIONS FOR WHICH HE HIRES DURING EACH MONTH HE IS CERTIFIED AND TO IDENTIFY THESE INDIVIDUALS IN A REPORT TO THE DEPARTMENT OF LABOR. IF, AS THERM-AIR CONTENDS, A BIDDER SHOULD BE REQUIRED ONLY TO SHOW BY AN OUTDATED CERTIFICATE THAT AT SOME TIME PAST HE WAS ACTUALLY CERTIFIED, THE PURPOSE OF THE LABOR SURPLUS AREA PROVISIONS WOULD BE DEFEATED BECAUSE THERE WOULD BE NO COMMITMENT BY THE BIDDER AT THE TIME THE BID IS SUBMITTED THAT DISADVANTAGED INDIVIDUALS IN THE AREA OF THE BIDDER'S FACILITY WOULD BE HIRED. FOR THE SAME REASON, THE CONTENTION MADE BY THERM-AIR THAT SUBMISSION OF AN OUTDATED CERTIFICATE WAS MERELY A MISTAKE BY THE BIDDER WHICH COULD BE CORRECTED BY SUBMITTED A "CORRECTED" OR EVEN BACK DATED CERTIFICATE IS INVALID. IN THE PRESENT CASE, THERM-AIR WAS NOT BOUND TO HIRE DISADVANTAGED PERSONS DURING THE PERIOD FROM AUGUST 10, 1971, WHEN THERM-AIR'S CERTIFICATE EXPIRED, TO SEPTEMBER 20, 1971, WHEN A VALID CERTIFICATE SHOULD HAVE BEEN SUBMITTED WITH THE BID, AND THEREFORE THE PURPOSE FOR WHICH THE GOVERNMENT GRANTS CERTIFIED-ELIGIBLE STATUS TO FIRMS WAS DEFEATED. FURTHERMORE, AN OFFICIAL OF THE MANPOWER ADMINISTRATION IN THE DEPARTMENT OF LABOR HAS NOTIFIED US INFORMALLY THAT, IS ANY EVENT, BACK DATING OF YOUR CERTIFICATE WAS IMPROPER BECAUSE BACK DATING IS CONSIDERED TO BE APPROPRIATE ONLY IN CIRCUMSTANCES IN WHICH AN AGENCY OF THE GOVERNMENT HAS PREVIOUSLY PLACED THE EMPLOYER IN THE WRONG PREFERENCE CATEGORY. BACK DATING SHOULD NOT, HOWEVER, BE USED TO COVER THE EMPLOYER'S FAILURE TO KEEP HIS CERTIFICATION CURRENT.

IN SUPPORT OF ITS PROTEST THERM-AIR CITES OUR DECISION IN 50 COMP. GEN. 559 (1971) THAT ALTHOUGH AN AWARD WAS MADE ON THE BASIS OF AN INVALID LABOR SURPLUS AREA CERTIFICATE, IT WAS NOT NECESSARY THAT THE CONTRACT BE CANCELED BECAUSE, AS THE CERTIFICATE WAS ACCEPTED IN GOOD FAITH BY THE CONTRACTING OFFICER, THE CONTRACT WAS NOT VOID AB INITIO BUT ONLY VOIDABLE AT THE OPTION OF THE GOVERNMENT. WE DO NOT ACCEPT THAT PRECEDENT AS BINDING IN THE PRESENT CASE. THAT DECISION SHOULD BE DISTINGUISHED FROM THE PRESENT CASE IN WHICH THE CONTRACTING OFFICER KNEW BEFORE AWARD THAT THE CERTIFICATE WAS INVALID. IN ITS LETTER OF FEBRUARY 4, 1972, RESPONDING TO THE ADMINISTRATIVE REPORT, THERM-AIR ASSERTS THAT AT THE TIME OF BID OPENING IT WAS CURRENTLY PERFORMING UNDER A LABOR SURPLUS AREA SET-ASIDE CONTRACT AWARDED TO IT AS A FIRM ENTITLED TO FIRST-PREFERENCE STATUS. ON THIS BASIS, THERM-AIR WAS REQUIRED, AT THE TIME THE PRESENT BID WAS SUBMITTED, TO HIRE DISADVANTAGED INDIVIDUALS FOR 25 PERCENT OF EMPLOYMENT OPENINGS UNDER 29 CFR 8.9, QUOTED ABOVE. THERM-AIR ARGUES FROM THIS FACT THAT NO OTHER PROOF OF FIRST-PREFERENCE CERTIFICATION WAS NECESSARY FOR IT TO RECEIVE PRIORITY FOR NEGOTIATION OF THE AWARD SET ASIDE FOR LABOR LABOR SURPLUS AREAS. HOWEVER, WE FIND NO INDICATION IN THERM-AIR'S BID THAT IT WAS CURRENTLY PERFORMING UNDER THE REQUIREMENTS OF A FIRST PREFERENCE CERTIFICATE AT ITS NEWARK FACILITY AND THE CONTRACTING OFFICER COULD NOT REASONABLY BE EXPECTED TO BE AWARE OF THAT FACT. FURTHERMORE, IN RECENT DECISIONS OUR OFFICE HAS AGAIN UPHELD THE REQUIREMENT THAT CURRENT CERTIFICATION OF FIRST-PREFERENCE STATUS MUST BE ACTUALLY SUBMITTED WITH THE BID IN ORDER TO SUPPORT A BIDDER'S RIGHT TO PRIORITY IN NEGOTIATION. SEE 51 COMP. GEN. 335 (1971); AND 51 ID. 344 (1971).

BECAUSE THERM-AIR DID NOT SUBMIT A VALID CERTIFICATION WITH ITS BID, THE CONTRACTING OFFICER PROPERLY REFUSED TO CONSIDER IT A CERTIFIED ELIGIBLE CONCERN, ENTITLED TO PRIORITY IN NEGOTIATIONS. ACCORDINGLY, WE CONSIDER THE PROPOSED AWARD TO HEAT EXCHANGERS FOR THAT PORTION OF ITEM 0010 SET ASIDE FOR LABOR SURPLUS AREAS TO BE APPROPRIATE.