B-182811, APR 18, 1975

B-182811: Apr 18, 1975

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WHERE ORAL PROTEST TIMELY MADE WITH CONTRACTING ACTIVITY IS NEVER DENIED BY THE ACTIVITY AND AWARD TO PROPOSED AWARDEE IS WITHHELD. WILL BE CONSIDERED TIMELY FILED UNDER 4 C.F.R. SINCE UNTIMELY RECEIPT BY CONTRACTING OFFICER WAS CAUSED BY MISHANDLING BY INSTALLATION PERSONNEL. 3. LABOR SURPLUS AREA DESIGNATIONS ARE MATTERS SOLELY WITHIN JURISDICTION OF DEPARTMENT OF LABOR AND QUESTION OF VALIDITY OF FIRST PREFERENCE CERTIFICATE IS FOR THAT DEPARTMENT'S CONSIDERATION. 4.WHERE FIRST PREFERENCE CERTIFICATE. ALLEGED TO HAVE BEEN OBTAINED FRAUDULENTLY BY BIDDER. BIDDER'S INSERTION OF NAME OF FIRM HOLDING FIRST PREFERENCE CERTIFICATE TO WHICH IT MIGHT SUBCONTRACT 30 PERCENT OF WORK WAS IN ACCORDANCE WITH REQUIREMENTS OF INVITATION AND DID NOT CREATE ALLEGED ILLEGAL OPTION.

B-182811, APR 18, 1975

1. WHERE ORAL PROTEST TIMELY MADE WITH CONTRACTING ACTIVITY IS NEVER DENIED BY THE ACTIVITY AND AWARD TO PROPOSED AWARDEE IS WITHHELD, SUBSEQUENTLY WRITTEN PROTEST TO AGENCY AND TO OUR OFFICE, FILED WITHIN A REASONABLE PERIOD OF TIME, WILL BE CONSIDERED TIMELY FILED UNDER 4 C.F.R. SEC. 20.2(A). 2. LATE TWX MODIFYING TIMELY-SUBMITTED BID MAY BE PROPERLY CONSIDERED UNDER "OR TELEGRAM IF AUTHORIZED" LANGUAGE OF CLAUSE GOVERNING ACCEPTANCE OR REJECTION OF LATE BID MODIFICATIONS, SINCE UNTIMELY RECEIPT BY CONTRACTING OFFICER WAS CAUSED BY MISHANDLING BY INSTALLATION PERSONNEL. 3. LABOR SURPLUS AREA DESIGNATIONS ARE MATTERS SOLELY WITHIN JURISDICTION OF DEPARTMENT OF LABOR AND QUESTION OF VALIDITY OF FIRST PREFERENCE CERTIFICATE IS FOR THAT DEPARTMENT'S CONSIDERATION. 4.WHERE FIRST PREFERENCE CERTIFICATE, ALLEGED TO HAVE BEEN OBTAINED FRAUDULENTLY BY BIDDER, HAS NOT BEEN VOIDED BY DEPARTMENT OF LABOR, CONTRACTING OFFICER MUST ACCEPT CERTIFICATION AS VALID AND MAY NEGOTIATE WITH THAT BIDDER ON LABOR SURPLUS AREA PORTION OF PROCUREMENT. BIDDER'S INSERTION OF NAME OF FIRM HOLDING FIRST PREFERENCE CERTIFICATE TO WHICH IT MIGHT SUBCONTRACT 30 PERCENT OF WORK WAS IN ACCORDANCE WITH REQUIREMENTS OF INVITATION AND DID NOT CREATE ALLEGED ILLEGAL OPTION.

WATTS MANUFACTURING CORPORATION:

INVITATION FOR BIDS NO. F09603-75-B-0142 WAS ISSUED ON A SMALL BUSINESS SET-ASIDE BASIS FOR THE PURCHASE OF 6,000 TOP AND 12,000 SIDE CARGO NETS. IN ADDITION, A NEGOTIATED PURCHASE OF EQUAL NUMBERS OF EACH NET WAS TO BE MADE FROM A SMALL BUSINESS QUALIFYING UNDER THE LABOR SURPLUS AREA REQUIREMENTS OF THE INVITATION. THE WATTS MANUFACTURING CORPORATION (WATTS) PROTESTS AGAINST AWARD TO ANY FIRM OTHER THAN ITSELF. WE WILL LIMIT THIS CONSIDERATION TO ITS PROTEST AGAINST AWARD TO THE LOW BIDDER, KINGS POINT MFG. CO., INC. (KINGS POINT).

KINGS POINT BY A TWX DATED NOVEMBER 5, 1974, MODIFIED ITS BID BY REDUCING ITS PRICES FOR BOTH ITEMS AND BY ADDING, AS REGARDED THE LABOR SURPLUS AREA PORTION OF THE PROCUREMENT, THE WORDS "AND/OR NARRICOT INDUSTRIES, INC. H& LUZERNE STREETS PHILADELPHIA, PENNA PERCENTAGE 30%." THIS MODIFICATION MADE KINGS POINT THE LOW BIDDER. THE TWX, RECEIVED ON THE PROCUREMENT ACTIVITY'S TWX MACHINE AT 12:09 P.M. THAT DAY, HAD NOTED THEREON, IN ADDITION TO THE BUYER'S NAME, HIS LOCATION, AND THE INVITATION NUMBER, THAT BID OPENING WAS SET FOR 2:00 P.M. THAT DAY, AND, THAT THE MODIFICATION WAS "URGENT." THE TWX WAS PUT IN THE NORMAL MAIL CHANNELS OF THE BASE, AND THE CONTRACTING OFFICER DID NOT RECEIVE IT UNTIL 1:30 P.M. ON NOVEMBER 6.

AT THE OUTSET IT IS NECESSARY TO DISPOSE OF THE QUESTION REGARDING THE TIMELINESS OF THE WATTS PROTEST. IT IS THE POSITION OF THE DEPARTMENT OF THE AIR FORCE THAT THE BASES FOR THE PROTEST SHOULD HAVE BEEN KNOWN BY WATTS ON THE BID OPENING DATE (NOVEMBER 5), OR THE DAY THEREAFTER, AND YET WATTS DID NOT PROTEST TO OUR OFFICE UNTIL ITS TELEGRAM OF DECEMBER 6. SINCE THIS WAS MORE THAN THE MAXIMUM 5 DAYS ALLOWED AFTER THE BASES FOR THE PROTEST SHOULD HAVE BEEN KNOWN UNDER OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS, 4 C.F.R. SEC. 20.2(A) (1974 ED.), IT IS ARGUED BY THE AIR FORCE THAT THE PROTEST SHOULD NOT BE CONSIDERED UPON THE MERITS.

THE RECORD IS NOT ENTIRELY CLEAR ON THIS ISSUE. WATTS ADVISES THAT IT DID NOT LEARN OF THE DECISION TO ACCEPT THE LATE KINGS POINT MODIFICATION UNTIL NOVEMBER 12 IN CONVERSATIONS WITH THE CONTRACTING ACTIVITY. CONTRACTING ACTIVITY RECORDS SHOW TELEPHONIC CONVERSATIONS REGARDING THE PROCUREMENT BETWEEN ITS PERSONNEL AND WATTS TO HAVE OCCURRED ON NOVEMBER 14. RECORDS SHOW A PROTEST AGAINST AWARD TO KINGS POINT TO HAVE BEEN ORALLY LODGED ON NOVEMBER 15. A LETTER FROM THE CONTRACTING ACTIVITY, DATED NOVEMBER 15 AND RECEIVED BY WATTS ON NOVEMBER 21, OFFICIALLY ADVISED WATTS OF THE DECISION TO MAKE AWARD AS ORALLY ADVISED. BY LETTER OF NOVEMBER 27 WATTS SUBMITTED THE WRITTEN DETAILS OF ITS ORAL PROTEST TO THE CONTRACTING ACTIVITY. NO DENIAL OF THE WATTS PROTEST, NOR AWARD TO KINGS POINT, WAS MADE PRIOR TO THE WATTS PROTEST TO OUR OFFICE. SECTION 20.2(A) OF OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS STATES THAT:

"*** BID PROTESTS SHALL BE FILED NOT LATER THAN 5 DAYS AFTER THE BASIS FOR PROTEST IS KNOWN OR SHOULD HAVE BEEN KNOWN, WHICHEVER IS EARLIER. A PROTEST HAS BEEN FILED INITIALLY WITH THE CONTRACTING AGENCY, ANY SUBSEQUENT PROTEST TO THE GENERAL ACCOUNTING OFFICE FILED WITHIN 5 DAYS OF NOTIFICATION OF ADVERSE AGENCY ACTION WILL BE CONSIDERED PROVIDED THE INITIAL PROTEST TO THE AGENCY WAS MADE TIMELY. ***"

THERE IS NOTHING BEFORE US TO INDICATE THAT WATTS KNEW OF A PROPOSED AWARD TO KINGS POINT, NOTWITHSTANDING ITS LATE MODIFICATION OR THE OTHER ALLEGED DEFICIENCIES IN HE KINGS POINT BID, BEFORE NOVEMBER 12. SINCE THE ORAL PROTEST WAS LODGED ON NOVEMBER 15, IT WAS MADE WITHIN 5 DAYS AFTER THE BASIS OF THE PROTEST WAS KNOWN AND WAS THUS TIMELY FILED WITH THE CONTRACTING ACTIVITY. THE FORMAL PROTEST FOLLOWED WITHIN A REASONABLE TIME AFTER THE ORAL PROTEST AND BEFORE IT HAD BEEN RESOLVED. FURTHER, SINCE THE CONTRACTING ACTIVITY NEVER MADE AN ADVERSE RULING ON THE PROTEST PRIOR TO WATTS PROTEST TO OUR OFFICE, THE PROTEST TO OUR OFFICE MUST ALSO BE CONSIDERED TIMELY. MATTER OF ARBEN ENGINEERING CORPORATION, B-181912, MARCH 6, 1975.

TURNING THEN TO THE MERITS OF THE PROTEST, FIRST, WATTS CONTENDS THAT THE BID MODIFICATION SUBMITTED BY KINGS POINT SHOULD NOT HAVE BEEN CONSIDERED BY THE CONTRACTING OFFICER. SECTION C-20 OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS PROVIDED THAT, AMONGST OTHER THINGS, NO BID MODIFICATION WOULD BE CONSIDERED UNLESS "SENT BY MAIL (OR TELEGRAM IF AUTHORIZED) ***" IT IS CONTENDED BY WATTS THAT IT WAS NOT THE INTENT OF THE AUTHORS OF THIS PROVISION TO INCLUDE MODIFICATIONS SENT BY TWX. COMMUNICATIONS, WHOSE ACCEPTANCE IS PERMITTED UNDER THIS SECTION, ARE CONFIDENTIAL AND THEIR CONTENTS ARE UNKNOWN UNTIL OPENED. THIS QUALITY IS DEMANDED IN SITUATIONS AS HERE SO AS TO MAINTAIN THE INTEGRITY AND CONFIDENTIALITY OF THE BID PROCESS AND TO HELP ASSURE THAT THE PROCESS THROUGH WHICH THE SUCCESSFUL BIDDER IS SELECTED IS NOT OPEN TO SUSPICION. WATTS ARGUES THAT COMMUNICATIONS SENT BY TWX, HOWEVER, ARE OPEN AND, THEREFORE, LACK THE REQUISITE CONFIDENTIALITY.

SECONDLY, IT IS CONTENDED THAT KINGS POINT SHOULD NOT BE CONSIDERED FOR THE LABOR SURPLUS SET-ASIDE PORTION OF THE INVITATION. IT IS ALLEGED THAT KINGS POINT FRAUDULENTLY RECEIVED A FIRST PREFERENCE CERTIFICATE BY STATING THE LOCATION OF ITS EMPLOYING ESTABLISHMENT TO BE ST. PAULS, NORTH CAROLINA, AN AREA DESIGNATED BY THE DEPARTMENT OF LABOR AS A CONCENTRATED AREA OF UNEMPLOYMENT. AT THAT TIME, WE ARE TOLD, THE ST. PAULS FACILITY WAS USED AS A WAREHOUSE, AND NO EMPLOYEES WORKED THERE. THE LOCATION OF KINGS POINT IN FAYETTEVILLE, NORTH CAROLINA, WOULD NOT QUALIFY KINGS POINT FOR THE CERTIFICATE. IT IS BELIEVED KINGS POINT SHOULD BE DISQUALIFIED FOR AWARD DUE TO THIS ALLEGED FRAUDULENT MISREPRESENTATION. FURTHER, IT IS BELIEVED THAT KINGS POINT MAY NOT RECEIVE AWARD BECAUSE IT CREATED AN OPTION IN ITS BID TO EITHER DO THE WORK ITSELF OR ALLOW NARRICOTT INDUSTRIES TO DO 30 PERCENT OF IT.

CONCERNING THE FIRST ISSUE, WE BELIEVE THE CONTRACTING OFFICER WAS CORRECT IN TREATING THE TWX AS FALLING UNDER THE TYPE OF COMMUNICATIONS THAT MAY BE, IF ALL OTHER REQUIREMENTS ARE MET, CONSIDERED UNDER SECTION C -20 OF THE INVITATION. AS STATED IN THE ACTIVITY REPORT, BOTH TELEGRAMS AND TWX'S ARE SENT BY WIRE FROM FACILITIES OPERATED BY WESTERN UNION. THAT ONE IS OPEN AND THE OTHER ENCLOSED IN AN ENVELOPE DOES NOT SEEM TO US OF MUCH CONSEQUENCE. FURTHER, WE BELIEVE THAT THE DETERMINATION THAT THE KINGS POINT MODIFICATION WAS PROPERLY FOR CONSIDERATION, NOTWITHSTANDING ITS LATENESS, WAS CORRECT, INASMUCH AS THE TWX WAS RECEIVED BY THE CONTRACTING OFFICER AFTER BID OPENING ONLY BECAUSE OF MISHANDLING BY INSTALLATION PERSONNEL. 43 COMP. GEN. 317 (1963) AND 46 COMP. GEN. 771 (1967).

IN REGARD TO THE CONTENTION THAT KINGS POINT DOES NOT POSSESS A VALID FIRST PREFERENCE CERTIFICATE, WE BELIEVE THAT THIS IS A MATTER FOR CONSIDERATION BY THE DEPARTMENT OF LABOR. OUR OFFICE HAS NO JURISDICTION TO QUESTION THE JUDGMENT OF THAT DEPARTMENT AS REGARDS LABOR SURPLUS AREA DESIGNATIONS. 50 COMP. GEN. 559, 563 (1971) AND 51 ID. 335, 339 (1971). FURTHER, PARAGRAPH 1-803(A) (IV) OF THE ARMED SERVICES PROCUREMENT REGULATION (1974 ED.) PROVIDES THAT A DEPARTMENT OF LABOR CERTIFICATION SHALL BE CONSIDERED AS CONCLUSIVE WITH RESPECT TO A PARTICULAR PROCUREMENT. CONSEQUENTLY, INASMUCH AS ONLY THE DEPARTMENT OF LABOR MAY GRANT, DENY, OR VOID A CERTIFICATION (SEE 29 C.F.R. SEC. 8.9(A) (1974)), THE MERE ALLEGATION BY ANOTHER BIDDER THAT THE CERTIFICATE WAS OBTAINED FRAUDULENTLY DOES NOT NEGATE THE CONTRACTING OFFICER'S DUTY TO TREAT AS VALID A CERTIFICATE WHICH HAS NOT BEEN VOIDED BY THE APPROPRIATE OFFICIALS. AND, IN VIEW OF THIS, SINCE THE KINGS POINT FIRST PREFERENCE CERTIFICATE MUST BE CONSIDERED AS VALID, NEGOTIATIONS WITH THAT FIRM ON THE LABOR SURPLUS AREA PORTION OF THE PROCUREMENT WOULD BE PROPER.

FINALLY, THE FACT THAT KINGS POINT STATED IN ITS BID AND BID MODIFICATION THAT THE WORK WOULD BE DONE BY ITSELF "AND/OR NARRICOT INDUSTRIES, INC. ***" WAS NOT IMPROPER AND CREATED NO OBJECTIONABLE OPTION AS IS ALLEGED. SECTION B-17 OF THE INVITATION REPRESENTATIONS, CERTIFICATIONS, AND ACKNOWLEDGMENTS PROVIDES THAT AN OFFEROR SHALL "INSERT *** THE ADDRESSES) WHERE COSTS INCURRED ON ACCOUNT OF MANUFACTURING OR PRODUCTION (BY OFFEROR OR FIRST TIER SUBCONTRACTOR) WILL AMOUNT TO MORE THAN TWENTY-FIVE PERCENT (25%) OF THE CONTRACT PRICE ***." ALSO C-43 OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS STATES THAT:

"(3) ***

"(I) 'CERTIFIED-ELIGIBLE CONCERN WITH A FIRST PREFERENCE' MEANS A CONCERN *** WHICH HAS BEEN CERTIFIED BY THE SECRETARY OF LABOR *** AND WHICH WILL AGREE TO PERFORM, OR CAUSE TO BE PERFORMED BY CERTIFIED CONCERNS WITH A FIRST PREFERENCE A SUBSTANTIAL PORTION OF A CONTRACT ***. A FIRM SHALL BE DEEMED TO PERFORM A SUBSTANTIAL PROPORTION OF THE CONTRACT ***IF THE COSTS THAT THE CONCERN WILL INCUR ON ACCOUNT OF MANUFACTURING OR PRODUCTION *** (BY ITSELF IF A CERTIFIED FIRM, OR BY CERTIFIED CONCERNS WITH A FIRST PREFERENCE ACTING AS FIRST TIER SUBCONTRACTORS) AMOUNT TO MORE THAN TWENTY -FIVE PERCENT (25%) OF THE CONTRACT PRICE."

CONSEQUENTLY, AS NARRICOTT INDUSTRIES POSSESSES A FIRST PREFERENCE CERTIFICATE AND AS KINGS POINT INDICATED - AS IT WAS REQUIRED TO DO BY THE INVITATION - IN ITS BID MODIFICATION THAT, IF USED, NARRICOTT WOULD PERFORM 30 PERCENT OF THE CONTRACT PRICE, WE MUST CONCLUDE THAT INSTEAD OF CREATING AN OPTION FATAL TO ITS BID KINGS POINT DID NOTHING MORE THAN COMPLY WITH THE BIDDING REQUIREMENTS AS SET FORTH IN THE INVITATION.

ACCORDINGLY, THE PROTEST IS DENIED.