B-174824, APR 4, 1972

B-174824, APR 4, 1972

BID PROTEST - SMALL BUSINESS SET-ASIDE - NEGOTIATED PROCUREMENT DECISION DENYING PROTEST OF SANZARE ASSOCIATES, INC., AGAINST THE AWARD OF FOUR CONTRACTS UNDER AN RFP ISSUED BY THE NAVY PURCHASING OFFICE, WASHINGTON, D.C., FOR ENGINEERING AND TECHNICAL SUPPORT SERVICES FOR SHIP CONCEPT FEASIBILITY STUDIES. THE SOLICITATION WAS A NEGOTIATED PROCUREMENT RESTRICTED TO SMALL BUSINESS FIRMS. PROTESTANT'S LOW BID ON EACH OF THE FOUR LOTS CANNOT OVERCOME ITS DEFICIENCIES WITH REGARD TO CORPORATE EXPERIENCE AND STAFFING, SINCE COST IS NOT THE CONTROLLING FACTOR IN A NEGOTIATED PROCUREMENT. WITH REGARD TO THE SMALL BUSINESS STATUS OF THE SUCCESSFUL OFFERORS, THE PROVISIONS OF ASPR 1-703(A)(2) REQUIRE THE CONTRACTING OFFICER TO ACCEPT SELF- CERTIFICATION AT FACE VALUE AND THE FAILURE OF ONE FIRM TO SELF-CERTIFY ITS STATUS MAY BE WAIVED AS A MINOR INFORMALITY UNDER ASPR 2-405. FOR THE FOREGOING REASONS THE PROTEST MUST BE DENIED.

TO SANZARE ASSOCIATES, INC.:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 5, 1972, AND PRIOR CORRESPONDENCE, PROTESTING AGAINST THE AWARD OF FOUR CONTRACTS UNDER REQUEST FOR PROPOSALS (RFP) N00600-70-R-5557, ISSUED BY THE NAVY PURCHASING OFFICE, WASHINGTON, D.C.

THE RFP RESTRICTED THE PROCUREMENT TO ONLY SMALL BUSINESS FIRMS AND SOLICITED OFFERS ON FOUR LOTS OF ENGINEERING AND TECHNICAL SUPPORT SERVICES FOR SHIP CONCEPT FEASIBILITY STUDIES. NEGOTIATIONS WERE HELD WITH OFFERORS, INCLUDING YOUR FIRM AND AS A RESULT FOUR OFFERORS WERE SELECTED FOR AWARD. SANZARE WAS NOT ONE OF THOSE SELECTED ALTHOUGH ITS PRICE FOR EACH LOT WAS LOWER THAN THE PRICES OF THE FIRMS SELECTED. ALL OFFERORS WERE NOTIFIED OF THE PROPOSED CONTRACTS FOR LOTS I, III AND IV BY LETTER OF OCTOBER 20, 1971, AND GIVEN THE OPPORTUNITY TO CHALLENGE THE SMALL BUSINESS SIZE STATUS OF THE APPARENTLY SUCCESSFUL OFFERORS. SIMILAR LETTER REGARDING LOT II WAS MAILED ON OCTOBER 29, 1971. NOTICES OF AWARD WERE SENT TO THE SUCCESSFUL FIRMS ON NOVEMBER 9 AND CONTRACTS WERE SUBSEQUENTLY EXECUTED ON NOVEMBER 29 AND DECEMBER 3, 1971.

YOU FIRST CONTEND THAT THE AWARDS WERE NOT MADE TO THE LOW "BIDDER" SINCE SANZARE'S OFFER ON ANY LOT WAS LOWER THAN THE PRICE OFFERED BY THE SUCCESSFUL CONTRACTOR FOR THE SAME LOT. IT IS TRUE THAT YOUR OFFERED PRICE WAS LOWER AS YOU CONTEND. HOWEVER, THIS PROCUREMENT WAS NOT FORMALLY ADVERTISED SO AS TO REQUIRE AWARD TO THE LOW BIDDER, ASSUMING ITS RESPONSIVENESS AND RESPONSIBILITY. RATHER, THE SERVICES IN THIS INSTANCE WERE BEING OBTAINED BY NEGOTIATION PROCEDURES AND THERE IS NO REQUIREMENT THAT AWARD BE MADE TO A TECHNICALLY INFERIOR OFFEROR SOLELY BECAUSE OF ITS LOW PRICE. MOREOVER, SINCE IT APPEARS THAT SUBSEQUENT TO NEGOTIATIONS, SANZARE'S PROPOSAL REMAINED DEFICIENT IN THE AREAS OF CORPORATE EXPERIENCE AND STAFFING, WE CANNOT CONCLUDE THAT FURTHER CONSIDERATION OF ITS PROPOSAL WAS WARRANTED NOTWITHSTANDING ITS LOW PRICE.

SANZARE NEXT CONTENDS THAT THE AWARDS WERE NOT MADE TO SMALL BUSINESS CONCERNS. IN THIS CONNECTION, WE NOTE THAT THREE OF THE FOUR FIRMS RECEIVING AWARD SELF-CERTIFIED THAT THEY WERE SMALL BUSINESS CONCERNS UNDER THE SMALL BUSINESS SIZE STANDARD SET OUT IN THE RFP. THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) REQUIRES THE CONTRACTING OFFICER TO ACCEPT THE SELF-CERTIFICATION REPRESENTATION OF SMALL BUSINESS STATUS BY AN OFFEROR AT FACE VALUE. ASPR 1-703(A)(2). SUCH A REPRESENTATION IS EFFECTIVE, EVEN IF QUESTIONED, UNLESS THE SMALL BUSINESS ADMINISTRATION (SBA) DETERMINES THAT THE OFFEROR IS NOT A SMALL BUSINESS. SEE ASPR 1- 703(B).

IN THIS CASE, SANZARE WAS GIVEN THE OPPORTUNITY TO QUESTION THE SMALL BUSINESS STATUS OF THE FIRMS TO WHICH AWARD WAS ANTICIPATED. THE PROCUREMENT ACTIVITY STATES THAT SANZARE NEVER ACTED UPON THAT OPPORTUNITY AND NOTHING IN THE ADMINISTRATIVE REPORT INDICATES THAT STATEMENT TO BE ERRONEOUS. ABSENT A CHALLENGE TO THE STATUS OF A PROPOSED CONTRACTOR, THERE IS NO BASIS FOR OUR OFFICE TO CONCLUDE THAT THE CONTRACTING OFFICER ACTED UNREASONABLY OR CONTRARY TO REGULATION IN MAKING THE AWARDS ON THE BASIS OF THE SELF-CERTIFICATIONS.

WITH RESPECT TO THE ONE FIRM (HYDRONAUTICS, INCORPORATED) WHICH FAILED TO SELF-CERTIFY AS TO ITS SMALL BUSINESS SIZE, SUCH FAILURE MAY BE WAIVED AS A MINOR IRREGULARITY OR INFORMALITY PURSUANT TO ASPR 2 405. THAT PROVISION STATES, IN PART:

" *** EXAMPLES OF MINOR INFORMALITIES OR IRREGULARITIES INCLUDE:

"(II) FAILURE TO FURNISH REQUIRED INFORMATION CONCERNING THE NUMBER OF THE BIDDER'S EMPLOYEES OR FAILURE TO MAKE A REPRESENTATION CONCERNING HIS SIZE STATUS;"

CONSEQUENTLY, NO LEGAL BASIS EXISTS FOR QUESTIONING THE AWARD TO HYDRONAUTICS FOR REASON OF THIS FAILURE. MOREOVER, HYDRONAUTICS SELF CERTIFIED THAT IT WAS A SMALL BUSINESS WITH RESPECT TO ANOTHER PROCUREMENT SHORTLY AFTER RECEIVING THE AWARD IN CONTROVERSY HERE ON THE BASIS OF ANNUAL RECEIPTS NOT EXCEEDING $1,000,000 FOR THE PAST 3 YEARS. SINCE THAT DOLLAR LIMITATION IS SUBSTANTIALLY LESS THAN THE $5,000,000 SMALL BUSINESS SIZE STANDARD STATED IN RFP -5557, IT APPEARS THAT HYDRONAUTICS WAS A SMALL BUSINESS FOR PURPOSES OF THE INSTANT AWARD.

FOR THE REASONS EXPRESSED ABOVE, THE PROTEST IS DENIED.