B-178701(2), FEB 22, 1974

B-178701(2): Feb 22, 1974

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WHILE CONTRACTING OFFICER MAY MAKE EXIGENCY AWARD NOTWITHSTANDING NONRESPONSIBILITY OF SMALL BUSINESS BIDDER IS BEFORE SBA FOR COC CONSIDERATION. THIS RECOMMENDATION WAS PREDICATED ON THE CONCLUSION THAT DYNETERIA WAS INELIGIBLE FOR AWARD AS A SMALL BUSINESS CONCERN. WE ALSO CONCLUDED THAT THE RATIONALE EMPLOYED IN MAKING THE AWARD WAS IN DEROGATION OF THE STATUTORY AUTHORITY OF SBA TO MAKE SIZE DETERMINATIONS. COUNSEL SUBMITS THAT OUR DECISION IS INCORRECT AS A MATTER OF LAW BECAUSE THE CONTRACTING OFFICER PROPERLY AWARDED THE CONTRACT TO THE PROTESTER. IT IS URGED THAT THE BEST INTERESTS OF THE GOVERNMENT WOULD NOT BE SERVED IF THE CONTRACT WERE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT AND THE REQUIREMENT RESOLICITED.

B-178701(2), FEB 22, 1974

WHILE CONTRACTING OFFICER MAY MAKE EXIGENCY AWARD NOTWITHSTANDING NONRESPONSIBILITY OF SMALL BUSINESS BIDDER IS BEFORE SBA FOR COC CONSIDERATION, CONTRACTING OFFICER MAY NOT DISREGARD REGIONAL SBA DIRECTOR'S ADVERSE SIZE DETERMINATION IN MAKING AWARD ON EXIGENCY BASIS. 53 COMP. GEN. (B-178701, DECEMBER 28, 1973), AFFIRMED.

TO DYNETERIA, INC.:

OUR DECISION 53 COMP. GEN. (B-178701, DECEMBER 28, 1973), RECOMMENDED THAT THE FOOD SERVICE CONTRACT AWARDED TO DYNETERIA, INC. (DYNETERIA) BY LOWRY AIR FORCE BASE UNDER TOTAL SMALL BUSINESS SET ASIDE INVITATION FOR BIDS F05600-73-B-0387 BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT. THIS RECOMMENDATION WAS PREDICATED ON THE CONCLUSION THAT DYNETERIA WAS INELIGIBLE FOR AWARD AS A SMALL BUSINESS CONCERN. WE ALSO CONCLUDED THAT THE RATIONALE EMPLOYED IN MAKING THE AWARD WAS IN DEROGATION OF THE STATUTORY AUTHORITY OF SBA TO MAKE SIZE DETERMINATIONS.

BY LETTER DATED JANUARY 25, 1974, COUNSEL FOR THE PROTESTER REQUESTED GAO TO RECONSIDER ITS DECISION ON ALTERNATIVE BASES. FIRST, COUNSEL SUBMITS THAT OUR DECISION IS INCORRECT AS A MATTER OF LAW BECAUSE THE CONTRACTING OFFICER PROPERLY AWARDED THE CONTRACT TO THE PROTESTER. SECOND, IT IS URGED THAT THE BEST INTERESTS OF THE GOVERNMENT WOULD NOT BE SERVED IF THE CONTRACT WERE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT AND THE REQUIREMENT RESOLICITED, ESPECIALLY AT THIS POINT IN CONTRACT PERFORMANCE.

COUNSEL NOTES THAT THE APPLICABLE REGULATIONS, BOTH ASPR AND THOSE PROMULGATED BY SBA, ARE SILENT AS TO THE EFFECT TO BE GIVEN THE SIZE DETERMINATION OF THE SBA DISTRICT DIRECTOR WHEN IT HAS BEEN APPEALED AND AWARD IS URGENTLY REQUIRED BEFORE EXHAUSTION OF THE SIZE APPEAL PROCESS. COUNSEL URGES THAT THE CONTRACTING OFFICER'S AUTHORITY BE EXTENDED TO FILL THE VOID IN THE REGULATIONS, PARTICULARLY SINCE THE DISTRICT DIRECTOR'S SIZE DETERMINATION WAS NOT "FINAL" UNDER THE REGULATIONS. IT IS COUNSEL'S POSITION THAT GAO SHOULD VIEW THE SMALL BUSINESS SIZE ASPECTS OF THE AWARD IN THE SAME MANNER IT WOULD VIEW THE CONTRACTING OFFICER'S AUTHORITY TO MAKE RESPONSIBILITY DETERMINATIONS OF SMALL BUSINESS BIDDERS. SPECIFICALLY, COUNSEL POINTS TO THE AUTHORITY OF THE CONTRACTING OFFICER TO PROCEED WITH AN EXIGENCY AWARD WHEN A LOW SMALL BUSINESS BIDDER DETERMINED TO BE NONRESPONSIBLE HAS APPLIED TO SBA FOR A CERTIFICATE OF COMPETENCY. FROM THIS, COUNSEL ANALOGIZES THAT THE CONTRACTING OFFICER SHOULD HAVE THE SAME AUTHORITY IN AN EXIGENCY AWARD SITUATION WHERE A LOW SMALL BUSINESS BIDDER APPEALS TO SBA FROM AN INITIAL UNFAVORABLE REGIONAL SBA SIZE DETERMINATION. THE ANALOGY IS NOT APPROPRIATE HERE. IT IS TRUE THAT IN AN EMERGENCY A CONTRACTING OFFICER MAY REJECT A LOW SMALL BIDDER AS NOT RESPONSIBLE WITHOUT REFERRING THE MATTER TO THE SBA UNDER THE COC PROCEDURE. IN THAT KIND OF CASE, THE CONTRACTING OFFICER EXERCISES HIS AUTHORITY TO DECIDE THE ISSUE OF RESPONSIBILITY, AVOIDING THE LIMITATIONS ON HIS AUTHORITY IN THE CASE OF SMALL BUSINESS ON THE BASIS OF URGENCY. HERE, HOWEVER, THERE WAS IN EXISTENCE PRIOR TO AWARD A DETERMINATION BY A DULY AUTHORIZED SBA OFFICIAL THAT DYNETERIA WAS NOT IN FACT A SMALL BUSINESS. THIS WOULD BE ANALOGOUS TO A RESPONSIBILITY CASE IN WHICH A COC HAD BEEN ISSUED BY AN AUTHORIZED SBA OFFICIAL WHOSE DETERMINATION WAS SUBJECT TO APPEAL AT A HIGHER LEVEL WITHIN SBA. IN SUCH A CASE, REGARDLESS OF HIS OWN VIEWS AS TO THE OFFEROR'S RESPONSIBILITY, THE CONTRACTING OFFICER WOULD EITHER HAVE TO MAKE AN AWARD CONSISTENT WITH THE OUTSTANDING COC OR WITHHOLD AWARD PENDING A DECISION BY THE SBA REVIEWING AUTHORITY. WE THINK THE SAME RULE IS APPLICABLE HERE. THE REGULATIONS DO NOT SPECIFICALLY REQUIRE ADMINISTRATIVE ACTION IN ACCORDANCE WITH THE FOREGOING. HOWEVER, THIS "SILENCE" DOES NOT, IN OUR VIEW, PERMIT THE CONTRACTING OFFICER TO IGNORE THE APPEALABLE DECISION.

IN OUR SYSTEM OF JURISPRUDENCE GENERALLY, AND ADMINISTRATIVE LAW PARTICULARLY, A PARTY MAY APPEAL AN ADVERSE DECISION TO A HIGHER AUTHORITY. HOWEVER, THE EXISTENCE OF THE HIGHER AUTHORITY AND THE EXERCISE OF THE RIGHT OF APPEAL DO NOT JUSTIFY AN ACTION INCONSISTENT WITH THE APPEALED RULING. TO TAKE A CONTRARY VIEW AND ADOPT THE POSITION ESPOUSED BY DYNETERIA WOULD PERMIT AND PERHAPS EVEN ENCOURAGE THE CIRCUMVENTION OF THE ESTABLISHED JUDICIAL OR ADMINISTRATIVE PROCESS. INDIVIDUAL OR OFFICIAL WOULD BE FREE TO ACT CONTRARY TO THE UNFAVORABLE DECISION OF THE LOWER TRIBUNAL BY THE SIMPLE EXPEDIENT OF CAUSING AN APPEAL TO BE FILED. WE CANNOT CONDONE AN INTERPRETATION WHICH PERMITS SUCH A PRACTICE. WE FIND NOTHING IN MID-WEST CONSTRUCTION, LTD. V. UNITED STATES, 387 F.2D 957, 961 (1968), TO SUPPORT A CONTRARY VIEW. IN THE CIRCUMSTANCES, WE MUST AGAIN CONCLUDE THAT UNDER THE STATUTORY AND REGULATORY SCHEME, THE CONTRACTING OFFICER IS NOT FREE TO DISREGARD THE SBA DISTRICT DIRECTOR'S SIZE DETERMINATION. AS POINTED OUT IN THE DECEMBER 28 DECISION:

"*** IN EFFECT, THE CONTRACTING OFFICER, IN THIS CASE, HAS USED THE URGENCY SITUATION TO CIRCUMVENT SBA'S STATUTORY AUTHORITY. IN AN URGENT PROCUREMENT WHICH CANNOT TOLERATE THE DELAY INCIDENT TO COMPLETE PROSECUTION OF ALL APPEAL RIGHTS, THE ONLY REASONABLE COURSE OF ACTION OPEN WOULD BE RELIANCE ON THE DISTRICT OFFICE'S SIZE DETERMINATION."

COUNSEL ALSO RELIES ON MID-WEST CONSTRUCTION, LTD., WHERE THE COURT STATED AT PAGE 963:

"*** BUT THOSE WHO ADMINISTER THE ACT HAVE PLAINLY DECIDED THAT THE CONGRESSIONAL POLICY FAVORING SMALL BUSINESS WAS NOT EXPECTED TO BE ENFORCED TO THE EXCLUSION OF ALL OTHER INTERESTS. WITNESS THE REGULATIONS ACCEPTING SELF-CERTIFICATION WHERE NO PROTEST, A LATE PROTEST, OR A LATE APPEAL IS FILED, AND THE PORTION OF PARAGRAPH (E) ALLOWING AN AWARD - WHERE 'UNUSUAL CONDITIONS MAKE IT NECESSARY THAT AN AWARD BE MADE' - WITHIN THE INITIAL 10-DAY SPAN ALLOTTED TO SBA."

IT IS QUITE CLEAR FROM THE RECORD THAT NONE OF THE ABOVE INSTANCES ARE PRESENT IN THIS CASE. MOREOVER, IN MID-WEST CONSTRUCTION, LTD., THE CONTRACTING OFFICER AWARDED A CONTRACT TO MID-WEST ON THE BASIS OF THE SBA REGIONAL DIRECTOR'S FAVORABLE SIZE DETERMINATION BECAUSE OF THE URGENCY OF THE PROCUREMENT. THIS RELIANCE ON THE ONLY OUTSTANDING SBA DETERMINATION WAS PRECISELY THE THRUST OF OUR DECEMBER 28 DECISION.

ALTERNATIVELY, COUNSEL REQUESTS GAO TO FOREGO ITS RECOMMENDATION THAT THE CONTRACT AWARDED DYNETERIA BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT. THE DEPARTMENT OF THE AIR FORCE HAS REQUESTED OUR VIEWS ON ITS PROPOSAL TO PERMIT THE CONTRACT TO EXPIRE BY ITS TERMS ON AUGUST 31, 1974, AND TO RESOLICIT THE REMAINING REQUIREMENTS. BY SEPARATE DECISION OF TODAY, WE INFORMED THE AIR FORCE, AFTER CONSIDERING THE VIEWS ADVANCED AGAINST TERMINATION ACTION, THAT WE FOUND NO BASIS TO CHANGE OUR RECOMMENDATION.

ACCORDINGLY, OUR DECISION OF DECEMBER 28, 1973, IS AFFIRMED.