B-213017(1), JUL 23, 1984, OFFICE OF GENERAL COUNSEL

B-213017(1): Jul 23, 1984

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BECAUSE THE PROTESTER IS NOT AN INTERESTED PARTY UNDER OUR BID PROTEST PROCEDURES. 4 C.F.R. THE PROTEST RAISED THE ISSUE OF WHEN A CONTRACTING OFFICER FOR A DEFENSE AGENCY IS REQUIRED TO REFER A DETERMINATION OF NONRESPONSIBILITY TO THE SMALL BUSINESS ADMINISTRATION (SBA). WHICH PROVIDES THAT REFERRALS TO SBA FOR A CERTIFICATE OF COMPETENCY (COC) SHALL NOT BE MADE WHERE THE ACQUISITION IS MADE PURSUANT TO THE SMALL PURCHASE PROCEDURES. SBA REGULATIONS IMPLEMENTING THE SMALL BUSINESS ACT MAKE REFERRAL DISCRETIONARY ONLY WHEN THE CONTRACT VALUE IS LESS THAN $10. THESE REGULATIONS CONFLICT WHERE THE SMALL PURCHASE PROCEDURES ARE USED AND THE CONTRACT VALUE IS BETWEEN $10. WE HAVE HELD THAT A CONTRACTING AGENCY MAY NOT ITSELF DECIDE TO AVOID THE REFERRAL REQUIREMENT IN THE SMALL BUSINESS ACT.

B-213017(1), JUL 23, 1984, OFFICE OF GENERAL COUNSEL

PRECIS UNAVAILABLE

MR. ROGER SCHWARTZ, DIRECTOR, FEDERAL ACQUISITION REGULATION SECRETARIAT

DEAR MR. SCHWARTZ:

BY DECISION OF TODAY, OUR OFFICE HAS DISMISSED THE PROTEST OF IKARD MANUFACTURING COMPANY AGAINST THE ISSUANCE OF A PURCHASE ORDER TO WEMS, INC. UNDER REQUEST FOR QUOTATIONS (RFQ) NO. DAAH01-83-T-A634, ISSUED BY THE U.S. ARMY MISSILE COMMAND, BECAUSE THE PROTESTER IS NOT AN INTERESTED PARTY UNDER OUR BID PROTEST PROCEDURES. 4 C.F.R. SEC. 21.1(A) (1984). HOWEVER, THE PROTEST RAISED THE ISSUE OF WHEN A CONTRACTING OFFICER FOR A DEFENSE AGENCY IS REQUIRED TO REFER A DETERMINATION OF NONRESPONSIBILITY TO THE SMALL BUSINESS ADMINISTRATION (SBA).

IN THIS CASE, THE ARMY DECIDED NOT TO REFER THE DETERMINATION OF THE FIRM'S NONRESPONSIBILITY TO SBA ON THE BASIS OF DEFENSE ACQUISITION REGULATION (DAR) SEC. 1-705.4(C), WHICH PROVIDES THAT REFERRALS TO SBA FOR A CERTIFICATE OF COMPETENCY (COC) SHALL NOT BE MADE WHERE THE ACQUISITION IS MADE PURSUANT TO THE SMALL PURCHASE PROCEDURES. DAR SEC. 3-600 DEFINES A SMALL PURCHASE AS ONE THAT DOES NOT EXCEED $25,000. ON THE OTHER HAND, SBA REGULATIONS IMPLEMENTING THE SMALL BUSINESS ACT MAKE REFERRAL DISCRETIONARY ONLY WHEN THE CONTRACT VALUE IS LESS THAN $10,000 AND DO NOT DIFFERENTIATE BETWEEN SMALL PURCHASES AND OTHER SMALL DOLLAR VALUE PROCUREMENTS. THUS, THESE REGULATIONS CONFLICT WHERE THE SMALL PURCHASE PROCEDURES ARE USED AND THE CONTRACT VALUE IS BETWEEN $10,000 AND $25,000.

WE HAVE HELD THAT A CONTRACTING AGENCY MAY NOT ITSELF DECIDE TO AVOID THE REFERRAL REQUIREMENT IN THE SMALL BUSINESS ACT. SEE AMCO TOOL & DIE CO., 62 COMP.GEN. 213 (1983), 83-1 CPD PARA. 246. THIS IS THE EFFECT OF DAR SEC. 1-705.4(C), WHICH DIRECTS CONTRACTING OFFICERS NOT TO REFER DETERMINATIONS OF NONRESPONSIBILITY TO SBA IN SITUATIONS FOR WHICH SBA HAS NOT PROVIDED EXCEPTIONS.

WE THEREFORE BELIEVE THAT DUE CONSIDERATION SHOULD BE GIVEN TO RESOLVING THE DISCREPANCY BETWEEN FEDERAL ACQUISITION REGULATION SEC. 19-602.1(A)(2), WHICH SUPERSEDES THE DAR SECTION IN QUESTION, AND THE SBA REGULATIONS.

PLEASE ADVISE OUR OFFICE OF ANY ACTION TAKEN.