B-184337, DEC 5, 1975

B-184337: Dec 5, 1975

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PROTEST OF SMALL BUSINESS STATUS FILED WITHIN 5 DAYS AFTER BID OPENING WAS TIMELY UNDER FPR 1-1.703-2(B)(1) ALTHOUGH AWARD WAS MADE TO CHALLENGED FIRM PRIOR TO AGENCY'S RECEIPT OF PROTEST. AGENCY SHOULD HAVE TERMINATED CONTRACT FOR CONVENIENCE AWARDED TO FIRM DETERMINED TO BE LARGE EVEN THOUGH GOOD FAITH CERTIFICATION OF SIZE STATUS HAD BEEN MADE BY CONTRACTOR. RECOMMENDATION IS MADE THAT FPR AND SBA REGULATION BE AMENDED TO ADOPT ASPR PROVISION THAT AWARD NOT BE MADE DURING 5-DAY PERIOD FOR PROTESTING SIZE STATUS. THE PROTESTER CONTENDS THAT BABLER SHOULD NOT HAVE BEEN AWARDED THE CONTRACT SINCE THE SOLICITATION WAS SET ASIDE FOR SMALL BUSINESS CONCERNS AND BABLER IS NOT SMALL UNDER THE APPLICABLE SMALL BUSINESS ADMINISTRATION (SBA) SIZE STANDARD.

B-184337, DEC 5, 1975

PROTEST OF SMALL BUSINESS STATUS FILED WITHIN 5 DAYS AFTER BID OPENING WAS TIMELY UNDER FPR 1-1.703-2(B)(1) ALTHOUGH AWARD WAS MADE TO CHALLENGED FIRM PRIOR TO AGENCY'S RECEIPT OF PROTEST. THEREFORE, AGENCY SHOULD HAVE TERMINATED CONTRACT FOR CONVENIENCE AWARDED TO FIRM DETERMINED TO BE LARGE EVEN THOUGH GOOD FAITH CERTIFICATION OF SIZE STATUS HAD BEEN MADE BY CONTRACTOR. RECOMMENDATION IS MADE THAT FPR AND SBA REGULATION BE AMENDED TO ADOPT ASPR PROVISION THAT AWARD NOT BE MADE DURING 5-DAY PERIOD FOR PROTESTING SIZE STATUS.

SUPERIOR ASPHALT CONCRETE COMPANY:

SUPERIOR ASPHALT AND CONCRETE COMPANY (SUPERIOR) HAS PROTESTED THE AWARD MADE TO BABLER BROTHERS INC. (BABLER) FOR ROAD PAVING WORK UNDER INVITATION FOR BIDS NO. R6-75-165, ISSUED BY THE U.S. DEPARTMENT OF AGRICULTURE, FOREST SERVICE.

THE PROTESTER CONTENDS THAT BABLER SHOULD NOT HAVE BEEN AWARDED THE CONTRACT SINCE THE SOLICITATION WAS SET ASIDE FOR SMALL BUSINESS CONCERNS AND BABLER IS NOT SMALL UNDER THE APPLICABLE SMALL BUSINESS ADMINISTRATION (SBA) SIZE STANDARD.

BIDS WERE OPENED ON JUNE 24, 1975, AND BABLER WAS THE LOW BIDDER. BABLER CERTIFIED IN ITS BID THAT IT WAS A SMALL BUSINESS CONCERN AND AWARD WAS MADE TO IT ON JUNE 27, 1975. LATER THAT DAY, SUPERIOR HAND CARRIED TO THE FOREST SERVICE A COPY OF ITS PROTEST ADDRESSED TO THIS OFFICE REGARDING BABLER'S SIZE STATUS. PURSUANT TO REGULATION, FOREST SERVICE REFERRED THE MATTER TO SBA FOR RESOLUTION. ALSO, THE FOREST SERVICE HELD PERFORMANCE IN ABEYANCE.

SUBSEQUENTLY, SBA DETERMINED THAT BABLER DID NOT QUALIFY AS A SMALL BUSINESS FOR THE SUBJECT SOLICITATION. THE FOREST SERVICE REPORTS THAT, AS A RESULT OF THE PROTEST AN AUDIT WAS PERFORMED WHICH INDICATED THAT BABLER'S DOLLAR AMOUNT OF BUSINESS FOR THE FIRST QUARTER OF 1975 BROUGHT ITS AVERAGE FOR THE PRIOR 3 YEARS SLIGHTLY ABOVE THE APPLICABLE SBA STANDARD. IN THE OPINION OF THE FOREST SERVICE, BABLER HAD CERTIFIED ITSELF TO BE SMALL IN GOOD FAITH SINCE THE FIRM PREVIOUSLY HAD SUCCESSFULLY PERFORMED, WITHOUT QUESTION AS TO ITS SIZE, 29 SMALL BUSINESS SET-ASIDE CONTRACTS FOR THE FOREST SERVICE.

A SUPPLEMENTAL REPORT WAS RECEIVED HERE ON SEPTEMBER 23, 1975, WHEREIN THE CONTRACTING OFFICER ARGUES THAT HE WAS NOT REQUIRED TO CANCEL THE AWARD TO BABLER AND THAT IT IS IN THE GOVERNMENT'S BEST INTEREST TO ALLOW BABLER TO PERFORM THE CONTRACT. WE NOTE THAT BY THE TIME THIS REPORT, WHICH PROVIDED THE RATIONALE FOR THE CONTRACTING OFFICER'S POSITION, WAS RECEIVED IN THIS OFFICE, BABLER HAD PERFORMED THE CONTRACT.

INITIALLY, THE PROTESTER QUESTIONS THE VALIDITY OF THE AWARD SINCE IT BELIEVES THE PROTEST MAY HAVE BEEN FILED PRIOR TO SUCH TIME AS THE AWARD DOCUMENT ACTUALLY LEFT THE PROCURING ACTIVITY AND IN ANY EVENT NOTICE OF REVOCATION OF AWARD COULD HAVE BEEN EFFECTIVELY COMMUNICATED TO BABLER. IN THIS CONNECTION, THE CONTRACTING OFFICER HAS REPORTED THAT THE AWARD DOCUMENT WAS DULY POSTED IN THE ACTIVITY'S MAILING SYSTEM AND THAT THE DOCUMENT LEFT HIS OFFICE A CONSIDERABLE TIME PRIOR TO RECEIPT OF THE PROTEST. ADDITIONALLY, THE CONTRACTING OFFICER NOTES THAT THE MAILING SYSTEM SERVES A LARGE OFFICE WHICH DAILY PROCESSES MORE THAN A THOUSAND PIECES OF MAIL. CONSEQUENTLY, HE BELIEVES THE AWARD DOCUMENT WOULD NOT BE EASILY TRACED AND RETRACTED. IN THE ABSENCE OF A CONTROLLING REGULATION, WE CANNOT AGREE THAT THE CONTRACTING OFFICER SHOULD HAVE RETRACTED THE AWARD PRIOR TO SBA'S RESOLUTION OF THE MERITS OF SUPERIOR'S PROTEST. ADDITION, IT SHOULD BE NOTED THAT PERFORMANCE WAS SUSPENDED PENDING SBA'S CONSIDERATION OF THE MATTER.

ALTHOUGH SBA DETERMINED ON JULY 25, 1975, THAT BABLER WAS A LARGE BUSINESS FOR PURPOSES OF THIS PROCUREMENT, THE FIRM WAS PERMITTED TO PROCEED WITH THE CONTRACT ON AUGUST 22 ON THE BASIS (1) THAT THE POST AWARD SIZE STATUS PROTEST WAS UNTIMELY FILED, (2) THAT BABLER HAD CERTIFIED ITSELF AS SMALL BUSINESS IN GOOD FAITH AND (3) THAT URGENCY PRECLUDED AWARD TO ANYONE ELSE.

WHILE SUPERIOR'S SIZE PROTEST WAS RECEIVED AFTER CONTRACT AWARD, IT WAS TIMELY FILED SINCE IT WAS LODGED WITHIN THE 5-DAY TIME PERIOD PROVIDED IN FEDERAL PROCUREMENT REGULATIONS (FPR) 1-1.703-2(B)(1) (2ND ED., AMEND. 134, SEPT. 1974). IN THIS CONNECTION, THE CONTRACTING OFFICER ALSO ARGUES THAT THE PROTEST WAS UNTIMELY SINCE IT WAS INAPPROPRIATELY ADDRESSED TO THE COMPTROLLER GENERAL. HOWEVER, WE NOTE THAT A COPY WAS RECEIVED BY THE CONTRACTING OFFICER WITHIN THE PRESCRIBED TIME LIMIT AND WAS APPROPRIATELY REFERRED TO SBA FOR ACTION. THUS, THE PROTESTER'S MISDIRECTION WAS OF NO MATERIAL CONSEQUENCE IN THIS CASE.

WITH REGARD TO THE CONTRACTOR'S ERRONEOUS CERTIFICATION OF ITSELF AS SMALL BUSINESS, WE HAVE RECOGNIZED THAT A GOOD FAITH, ERRONEOUS CERTIFICATION MIGHT JUSTIFY CONTINUATION OF A CONTRACT WITH A LARGE BUSINESS WHERE A SIZE PROTEST WAS NOT TIMELY MADE. B-174807, MARCH 23, 1972 AND B-174912, MAY 16, 1972. HOWEVER, IT IS OUR OPINION THAT A CONTRACTOR'S GOOD FAITH IN CERTIFYING ITSELF AS SMALL BUSINESS IS NOT A PERTINENT CONSIDERATION WHERE A TIMELY SIZE PROTEST HAS BEEN FILED. SUCH CIRCUMSTANCES, TERMINATION FOR CONVENIENCE SHOULD BE CONSIDERED AN APPROPRIATE REMEDY WHEN A LARGE BUSINESS HAS ERRONEOUSLY CERTIFIED ITSELF AS SMALL BUSINESS, EVEN IF THE CERTIFICATION WAS MADE IN GOOD FAITH. OTHERWISE, THE EFFECTIVENESS OF SMALL BUSINESS PROTEST PROCEDURE WOULD BE SERIOUSLY DIMINISHED.

FINALLY, ALTHOUGH WE RECOGNIZE THAT URGENCY COULD JUSTIFY THE CONTRACTING OFFICER'S DETERMINATION NOT TO TERMINATE THE CONTRACT, WE FAIL TO SEE ANY EVIDENCE IN THE FILE INDICATING THAT NONE OF THE OTHER BIDDERS WAS ABLE TO PERFORM THE WORK WITHIN THE REQUIRED TIME FRAME. NEVERTHELESS, TERMINATION IS NOT FEASIBLE AT THIS TIME SINCE THE WORK HAS BEEN PERFORMED.

HOWEVER, WE ARE RECOMMENDING TO THE DIRECTOR, FPR DIVISION, GENERAL SERVICES ADMINISTRATION, AND THE ADMINISTRATOR, SBA THAT THEIR RESPECTIVE REGULATIONS BE AMENDED TO INCORPORATE THE SUBSTANCE OF ARMED SERVICES PROCUREMENT REGULATION 1-703(B)(5) (1975 ED.) WHICH REQUIRES CONTRACTING OFFICERS TO WITHHOLD CONTRACT AWARDS DURING THE 5-DAY PERIOD FOR PROTESTING BIDDER'S SIZE STATUS, UNLESS A WRITTEN DETERMINATION IS MADE THAT IMMEDIATE AWARD IS REQUIRED TO PROTECT THE PUBLIC INTEREST. PENDING ACTION ON THE ABOVE RECOMMENDATION, WE ARE FURTHER RECOMMENDING TO THE SECRETARY OF AGRICULTURE THAT APPROPRIATE ACTION BE TAKEN TO INSURE TIMELY AND FULL CONSIDERATION OF THE FEASIBILITY OF TERMINATING ANY SET-ASIDE CONTRACT ERRONEOUSLY AWARDED TO A LARGE BUSINESS CONCERN WHERE A TIMELY PROTEST HAS BEEN FILED.