B-207603.2, JUL 30, 1982

B-207603.2, JUL 30, 1982

DIGEST: IN ORDER TO BE ELIGIBLE FOR A LABOR SURPLUS AREA (LSA) EVALUATION PREFERENCE, A BID MUST LEGALLY OBLIGATE THE BIDDER TO PERFORM A SUBSTANTIAL PORTION OF THE CONTRACT IN AN LSA. THIS OBLIGATION IS CREATED BY DESIGNATING A GEOGRAPHIC AREA FOR PERFORMANCE THAT IS INCLUDED IN THE DEPARTMENT OF LABOR'S PUBLISHED LIST OF LSAS AT THE TIME OF BID OPENING.

VI MIL INC. - RECONSIDERATION:

VI MIL INC. REQUESTS RECONSIDERATION OF OUR DECISION IN VI MIL INC., B-207603, JUNE 23, 1982, 82-1 CPD IN WHICH WE CONCLUDED THAT THE FIRM WAS NOT ENTITLED TO A LABOR SURPLUS AREA PREFERENCE IN THE EVALUATION OF THE BIDS RECEIVED UNDER INVITATION FOR BIDS (IFB) DLA100 82-B-0532. VI MIL CONTENDED THAT IT WAS ENTITLED TO PREFERENCE BECAUSE IT PROMISED TO PERFORM THE WORK IN AN AREA WHICH IT HAD BEEN TOLD WOULD BE INCLUDED ON THE NEXT PUBLISHED LIST OF LABOR SURPLUS AREAS (LSAS) DESIGNATED BY THE ASSISTANT SECRETARY OF LABOR. THE AREA IDENTIFIED IN VI MIL'S BID WAS NOT INCLUDED ON THE LIST PUBLISHED BY THE ASSISTANT SECRETARY AT THE TIME OF BID OPENING. VI MIL CONTENDS THAT OUR DECISION IS INCORRECT BECAUSE THE IFB CLAUSE DEFINING ELIGIBILITY FOR AN LSA PREFERENCE REFERS ONLY TO THE STATUS OF AN AREA AS AN LSA AT THE TIME OF AWARD AND STATES THAT A CONCERN WILL BE CONSIDERED A LABOR SURPLUS FIRM "IF AT THE TIME OF AWARD THE FIRM IS CLASSIFIED AS SUCH BY THE SECRETARY OF LABOR ***." WE DO NOT AGREE WITH THAT CONTENTION, AND WE THEREFORE AFFIRM OUR PRIOR DECISION.

THE SOLICITATION CLAUSE IN QUESTION, ENTITLED "NOTICE OF TOTAL SMALL BUSINESS AND LSA SMALL BUSINESS CONCERN SET-ASIDE WITH PRICE DIFFERENTIALS" PROVIDES FOR A TOTAL SMALL BUSINESS SET-ASIDE, AND FOR AN EVALUATION PREFERENCE FOR SMALL BUSINESS CONCERNS THAT AGREE TO PERFORM THE CONTRACT IN A LABOR SURPLUS AREA. THE PREFERENCE FOR LABOR SURPLUS AREAS IS ACCOMPLISHED IN THE BID EVALUATION PROCESS BY ADDING 5 PERCENT TO THE BIDS RECEIVED FROM SMALL BUSINESS CONCERNS WHO DO NOT COMMIT THEMSELVES TO PERFORM THE CONTRACT IN A LABOR SURPLUS AREA.

THE CLAUSE DEFINES A LABOR SURPLUS AREA AS A "GEOGRAPHIC AREA WHICH AT THE TIME OF AWARD IS CLASSIFIED AS SUCH BY THE SECRETARY OF LABOR IN THE DEPARTMENT OF LABOR 'LISTING OF ELIGIBLE LABOR SURPLUS AREAS UNDER DEFENSE MANPOWER POLICY 4A AND EXECUTIVE ORDER 10582.'"

THE CLAUSE STATES THAT A LABOR SURPLUS AREA CONCERN IS ONE THAT "AGREES TO PERFORM OR CAUSE TO BE PERFORMED A SUBSTANTIAL PROPORTION OF A CONTRACT IN A LABOR SURPLUS AREA."

THE CLAUSE PROVIDES THAT IF THE OFFEROR "IS AWARDED A CONTRACT AS A LABOR SURPLUS AREA CONCERN, IT WILL PERFORM OR CAUSE TO BE PERFORMED A SUBSTANTIAL PROPORTION OF THE CONTRACT IN AN AREA CLASSIFIED AT THE TIME OF AWARD OR AT THE TIME OF PERFORMANCE OF THE CONTRACT AS AN LSA."

THE CLAUSE ALSO REQUIRES AN OFFEROR DESIRING "TO BE CONSIDERED FOR AWARD AS A LSA CONCERN" TO LIST "THE GEOGRAPHIC AREAS IN WHICH IT PROPOSES TO PERFORM." THE CLAUSE PERMITS THE OFFEROR TO CHANGE THE AREA IN WHICH IT PROPOSES TO PERFORM (WITH THE CONTRACTING OFFICER'S PERMISSION) IF THE "DEPARTMENT OF LABOR CLASSIFICATION OF ANY SUCH AREA (THE AREA SPECIFIED BY THE OFFEROR IN THE SOLICITATION) CHANGES" AFTER THE OFFER HAS BEEN SUBMITTED.

UNDER THIS SOLICITATION APPROACH, THEN, A BIDDER IS TO LIST ITS PROPOSED AREAS OF PERFORMANCE, AND THE LEGAL COMMITMENT TO PERFORM IN AN LSA ARISES IF THE AREAS LISTED ARE LSAS. FOR EVALUATION PURPOSES, THE RELEVANT ISSUE IS SIMPLY WHETHER AT THE TIME OF BID OPENING THE BIDDER IS ELIGIBLE TO BE CONSIDERED FOR THE LSA EVALUATION PREFERENCE BECAUSE OF THAT LEGAL COMMITMENT IN THE BID. OBVIOUSLY, THE DESIGNATION OF A GEOGRAPHIC AREA THAT IS NOT INCLUDED ON THE SECRETARY OF LABOR'S PUBLISHED LIST OF LSAS AT THE TIME OF BID OPENING DOES NOT CREATE THE ESSENTIAL LEGAL OBLIGATION TO PERFORM THE CONTRACT IN AN LSA, NOTWITHSTANDING THAT THE AREA DESIGNATED BY THE BIDDER ULTIMATELY IS LISTED AS AN LSA BY THE DEPARTMENT OF LABOR. SEE S.G.ENTERPRISES, INC., APRIL 6, 1982, 82-1 CPD 317. SINCE A GEOGRAPHIC AREA ONLY ACHIEVES THE STATUS OF AN LSA AS A RESULT OF THE SECRETARY'S PUBLISHED LISTING, AND BECAUSE THE MATERIAL TERMS OF A CONTRACT MUST BE ESTABLISHED AT BID OPENING, UFFNER TEXTILE CORPORATION, B-205050, DECEMBER 4, 1981, 81-2 CPD 443, IT IS ESSENTIAL THAT A BIDDER LEGALLY OBLIGATE ITSELF TO PERFORM IN AN LSA BY COMMITTING ITSELF TO PERFORM IN AN AREA THAT IS OFFICIALLY DESIGNATED AS AN LSA AT THE TIME OF OPENING. SEE S.G.ENTERPRISES, INC., SUPRA. VI-MIL HAS NOT PERSUADED US THAT OUR LEGAL CONCLUSION IS INCORRECT.

THE DECISION IS AFFIRMED.