B-180675(2), AUG 6, 1974

B-180675(2): Aug 6, 1974

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PRECIS-UNAVAILABLE SECRETARY OF THE NAVY: REFERENCE IS MADE TO THE PROTEST OF THE PSI-PERIPHERAL SUPPORT DIVISION OF THE MESON CORPORATION (PSI) AGAINST THE AWARD OF A CONTRACT TO THE PRECISION COMPONENTS DIVISION OF BELL INDUSTRIES. WHICH WAS THE SUBJECT OF A REPORT FROM THE ACTING DEPUTY COMMANDER. ENCLOSED IS A COPY OF OUR DECISION OF TODAY DENYING THE PROTEST. PSI STATED THAT: "COMP-SERV COMPANY IS KNOWN IN THE INDUSTRY TO HAVE ONLY ONE EMPLOYEE WHO SPENDS HIS TIME ALMOST EXCLUSIVELY IN SELLING. AS FAR AS IS KNOWN THEY HAVE NO PRODUCTION OR MANUFACTURING FACILITIES OF THEIR OWN. COMP-SERV ADMITS THAT IT SHARES FACILITIES WITH BELL AND WE NOTE COMP-SERV'S PRESIDENT IS ALSO THE DIVISION MANAGER FOR BELL.

B-180675(2), AUG 6, 1974

PRECIS-UNAVAILABLE

SECRETARY OF THE NAVY:

REFERENCE IS MADE TO THE PROTEST OF THE PSI-PERIPHERAL SUPPORT DIVISION OF THE MESON CORPORATION (PSI) AGAINST THE AWARD OF A CONTRACT TO THE PRECISION COMPONENTS DIVISION OF BELL INDUSTRIES, INC. (BELL), PURSUANT TO REQUEST FOR PROPOSALS (RFP) NO. N00126-74-R-4N0336, ISSUED BY THE UNITED STATES NAVY ELECTRONICS SUPPLY OFFICE, GREAT LAKES, ILLINOIS, WHICH WAS THE SUBJECT OF A REPORT FROM THE ACTING DEPUTY COMMANDER, PROCUREMENT MANAGEMENT, NAVY SUPPLY SYSTEMS COMMAND, DATED MARCH 29, 1974.

ENCLOSED IS A COPY OF OUR DECISION OF TODAY DENYING THE PROTEST. HOWEVER, WE NOTE THAT THE ADMINISTRATIVE REPORT ERRONEOUSLY STATED THAT BELL HAS ACQUIRED THE COMP-SERV COMPANY (COMP-SERV). IN ADDITION, BY LETTER DATED MAY 16, 1974, PSI STATED THAT:

"COMP-SERV COMPANY IS KNOWN IN THE INDUSTRY TO HAVE ONLY ONE EMPLOYEE WHO SPENDS HIS TIME ALMOST EXCLUSIVELY IN SELLING. AS FAR AS IS KNOWN THEY HAVE NO PRODUCTION OR MANUFACTURING FACILITIES OF THEIR OWN, AND PASSES OR SUBCONTRACTS ENTIRE JOBS TO OTHER FIRMS."

FURTHERMORE, COMP-SERV ADMITS THAT IT SHARES FACILITIES WITH BELL AND WE NOTE COMP-SERV'S PRESIDENT IS ALSO THE DIVISION MANAGER FOR BELL. WE ARE BRINGING THESE MATTERS TO YOUR ATTENTION FOR YOUR INFORMATION AS TO THE PROPRIETY OF COMP-SERV'S LISTING AS A QUALIFIED SOURCE AND COMP SERV'S ALLEGED SMALL BUSINESS STATUS, FOR FUTURE PROCUREMENTS INVOLVING BELL AND COMP-SERV.

ALSO, WE DIRECT YOUR ATTENTION TO THAT PORTION OF THE DECISION, WHERE WE FIND THAT THE POLICY OF NOT NOTIFYING THE UNSUCCESSFUL OFFERORS ON NEGOTIATED PROCUREMENTS OF LESS THAN $10,000 OF THE IDENTITY OF THE APPARENT SUCCESSFUL OFFEROR PRIOR TO AWARD OF THE CONTRACT IS IN VIOLATION OF SECTIONS 1-703(B)(1) AND 3-508.2(B) OF THE ARMED SERVICES PROCUREMENT REGULATION IN THOSE CASES WHERE THE PROCUREMENT INVOLVES A SMALL BUSINESS SET-ASIDE. WE BELIEVE THAT APPROPRIATE ACTION SHOULD BE TAKEN TO PREVENT THE APPLICATION OF THIS ERRONEOUS POLICY IN FUTURE NEGOTIATED PROCUREMENTS INVOLVING SMALL BUSINESS SET-ASIDES.

WE WOULD APPRECIATE YOUR ADVICE AS TO ANY ACTION TAKEN IN LIGHT OF OUR COMMENTS.