B-218720.3, AUG 20, 1985, OFFICE OF GENERAL COUNSEL

B-218720.3: Aug 20, 1985

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WE HELD THAT THE AGENCY PROPERLY REJECTED POLAN'S BID AS NONRESPONSIVE SINCE POLAN'S INTENT TO SUPPLY ITEMS MANUFACTURED BY A SMALL BUSINESS CONCERN WAS NOT CLEARLY EVIDENT FROM THE FACE OF THE BID WHICH IT HAD SUBMITTED. THE IFB WAS A TOTAL SMALL BUSINESS SET-ASIDE WHICH REQUIRED THAT ALL SUPPLIES TO BE FURNISNED UNDER THE PROPOSED CONTRACT BE MANUFACTURED OR PRODUCED BY DOMESTIC SMALL BUSINESSES. POLAN INDICATED IN THAT REPRESENTATION THAT IT WAS A SMALL BUSINESS CONCERN. ALSO INDICATED THAT "NOT ALL SUPPLIES TO BE FURNISHED WILL BE MANUFACTURED OR PRODUCED BY A SMALL BUSINESS CONCERN IN THE UNITED STATES. THERE IS NO PROPER BASIS FOR OUR OFFICE TO REVERSE THE MAY 30 DECISION AND RECOMMEND AWARD TO POLAN.

B-218720.3, AUG 20, 1985, OFFICE OF GENERAL COUNSEL

PRECIS-UNAVAILABLE

THE HONORABLE ARCH A. MOORE, JR.: GOVERNOR STATE OF WEST VIRGINIA

WE REFER TO YOUR LETTER OF JULY 12, 1985, ON BEHALF OF POLAN INDUSTRIES (POLAN) CONCERNING OUR DECISION B-218720.2, MAY 30, 1985, 85-1 CPD PARA. 617, COPY ENCLOSED, IN WHICH WE DENIED POLAN'S PROTEST THAT THE ARMY HAD IMPROPERLY REJECTED ITS LOW BID UNDER INVITATION FOR BIDS (IFB) NO. DAAB07-85-B-0065, AS NONRESPONSIVE. WE HELD THAT THE AGENCY PROPERLY REJECTED POLAN'S BID AS NONRESPONSIVE SINCE POLAN'S INTENT TO SUPPLY ITEMS MANUFACTURED BY A SMALL BUSINESS CONCERN WAS NOT CLEARLY EVIDENT FROM THE FACE OF THE BID WHICH IT HAD SUBMITTED.

THE IFB WAS A TOTAL SMALL BUSINESS SET-ASIDE WHICH REQUIRED THAT ALL SUPPLIES TO BE FURNISNED UNDER THE PROPOSED CONTRACT BE MANUFACTURED OR PRODUCED BY DOMESTIC SMALL BUSINESSES. ACCORDINGLY, THE IFB CONTAINED THE STANDARD SMALL BUSINESS CONCERN REPRESENTATION CLAUSE SET FORTH IN THE FEDERAL ACQUISITION REGULATION (FAR), 48 C.F.R. SEC. 52.219-1 (1984). POLAN INDICATED IN THAT REPRESENTATION THAT IT WAS A SMALL BUSINESS CONCERN, BUT ALSO INDICATED THAT "NOT ALL SUPPLIES TO BE FURNISHED WILL BE MANUFACTURED OR PRODUCED BY A SMALL BUSINESS CONCERN IN THE UNITED STATES, ITS POSSESSIONS OR PUERTO RICO." SINCE IN ITS BID POLAN DID NOT OBLIGATE ITSELF TO FURNISH THE PRODUCTS OF A SMALL BUSINESS CONCERN IF AWARDED THE CONTRACT, WE HELD THAT THE ARMY PROPERLY REJECTED PO1AN'S BID AS NONRESPONSIVE. ALTHOUGH POLAN LATER ATTEMPTED TO EXPLAIN ITS BID BY ASSERTING THAT OTHER INFORMATION CONTAINED IN ITS BID SHOWED THAT IT WOULD FURNISH SUPPLIES MANUFACTURED BY A SMALL BUSINESS AND THAT IT HAD MISINTERPRETED THE SMALL BUSINESS CONCERN REPRESENTATION CLAUSE, A NONRESPONSIVE BID CANNOT BE MADE RESPONSIVE BY SUCH EXPLANATIONS AFTER BID OPENING. OTHERWISE, A BIDDER COULD ELECT TO BE RESPONSIVE OR NONRESPONSIVE AFTER THE BIDS HAD BEEN REVEALED AS ITS INTERESTS DICTATED. SUCH A SITUATION, OF COURSE, WOULD BE PREJUDICIAL TO OTHER BIDDERS.

WHILE WE APPRECIATE YOUR CONCERN IN THIS MATTER, THERE IS NO PROPER BASIS FOR OUR OFFICE TO REVERSE THE MAY 30 DECISION AND RECOMMEND AWARD TO POLAN.

WE NOTED FROM THE RECORD IN THE POLAN CASE, AS WE DID IN THE CASE OF MOUNTAINEER LEATHERS, INC., B-218453, MAY 6, 1985, 85-1 CPD PARA. 5O5, COPY ENCLOSED, THAT SOME SMALL BUSINESS CONTRACTORS-- ESPECIALLY THOSE CONTRACTORS UNINITIATED IN DEALING WITH THE SMALL BUSINESS CONCERN REPRESENTATION CLAUSE-- HAVE SUBMITTED NONRESPONSIVE BIDS BECAUSE OF CONFUSION IN INTERPRETING THE CLAUSE. SPECIFICALLY, SOME CONTRACTORS ARE MISINTERPRETING THE WORDS "ALL SUPPLIES TO BE FURNISHED" IN THE CLAUSE TO MEAN ALL RAW MATERIALS AND SUPPLIES THAT GO INTO THE END ITEM BEING PROCURED RATHER THAN THE END ITEM ITSELF.

IT APPEARS THAT THE PRESENT LANGUAGE OF THE SMALL BUSINESS CONCERN REPRESENTATION CLAUSE IS CONFUSING SMALL BUSINESS CONTRACTORS DEALING WITH THE GOVERNMENT AND CAUSING THE GOVERNMENT TO LOSE THE BENEFIT OF POTENTIALLY LOW BIDS. THEREFORE, BY LETTERS TO THE DIRECTOR, FAR SECRETARIAT, AND THE ADMINISTRATOR, SMALL BUSINESS ADMINISTRATION, WE HAVE RECOMMENDED THAT THE SMALL BUSINESS CONCERN REPRESENTATION CLAUSE BE REVIEWED AND CONSIDERATION GIVEN TO CLARIFYING ITS WORDING.