B-139366, NOV 6, 1959

B-139366, NOV 6, 1959

PRECIS-UNAVAILABLE

SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED AUGUST 12, 1959, FROM THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), WITH ENCLOSURE, REQUESTING RECONSIDERATION OF OUR DECISION OF JUNE 24, 1959, B-139366, 38 COMP. GEN. 864, WHEREIN WE HELD THAT A CERTIFICATE OF COMPETENCY ISSUED TO A SMALL BUSINESS CONCERN UNDER SECTION 8(B)(7) OF PUBLIC LAW 85-536 BY THE SMALL BUSINESS ADMINISTRATION (SBA) INCLUDES THOSE ELEMENTS OF THE BIDDER'S RESPONSIBILITY RELATING TO ITS OVER-ALL ABILITY TO MEET THE REQUIREMENTS OF A PROPOSED PROCUREMENT.

SECTION 8(B)(7) OF PUBLIC LAW 85-536, AUTHORIZES THE SBA:

"(7) TO CERTIFY TO GOVERNMENT PROCUREMENT OFFICERS, ***, WITH RESPECT TO THE COMPETENCY, AS TO CAPACITY AND CREDIT, OF ANY SMALL BUSINESS CONCERN *** TO PERFORM A SPECIFIC GOVERNMENT CONTRACT. IN ANY CASE IN WHICH A SMALL-BUSINESS CONCERN *** HAS BEEN CERTIFIED BY OR UNDER THE AUTHORITY OF THE ADMINISTRATION TO BE A COMPETENT GOVERNMENT CONTRACTOR WITH RESPECT TO CAPACITY AND CREDIT AS TO A SPECIFIC GOVERNMENT CONTRACT, THE OFFICERS OF THE GOVERNMENT HAVING PROCUREMENT *** POWERS ARE DIRECTED TO ACCEPT SUCH CERTIFICATION AS CONCLUSIVE, AND ARE AUTHORIZED TO LET SUCH GOVERNMENT CONTRACT TO SUCH CONCERN *** WITHOUT REQUIRING IT TO MEET ANY OTHER REQUIREMENT WITH RESPECT TO CAPACITY AND CREDIT; ***."

IT IS THE POSITION OF YOUR DEPARTMENT THAT THE WORD "CAPACITY" AS USED IN THAT SUBSECTION MEANS ONLY THE PHYSICAL PLANT CAPACITY AND FACILITIES OF A SMALL BUSINESS BIDDER TO WHOM A CERTIFICATE OF COMPETENCY HAS BEEN ISSUED BY THE SBA IN CONNECTION WITH A PARTICULAR PROCUREMENT. IN SUPPORT OF THAT POSITION, IT IS CONTENDED THAT THE LEGISLATIVE HISTORIES OF PRIOR STATUTES RELATING TO ASSISTANCE TO SMALL BUSINESS, CITED IN OUR JUNE 24 DECISION, DID NOT EVIDENCE A CLEAR CONGRESSIONAL INTENT THAT THE WORD "CAPACITY," AS USED IN THOSE PRIOR STATUTES, INCLUDED MORE THAN MERE PHYSICAL PLANT CAPACITY, OR THAT THE CONGRESS INTENDED TO INCLUDE WITHIN THE MEANING OF THE WORD "CAPACITY" SUCH ELEMENTS OF RESPONSIBILITY AS EXPERIENCE, SKILL, "KNOWHOW," TECHNICAL KNOWLEDGE, MANAGERIAL ABILITY, ETC. IN PARTICULAR, ISSUE IS TAKEN TO OUR INTERPRETATION OF THE LEGISLATIVE INTENT IN ENACTING SECTION 2(6) OF PUBLIC LAW 603, 56 STAT. 351, AND SECTION 212 OF TITLE II OF PUBLIC LAW 163, 67 STAT. 232-240, BOTH OF WHICH STATUTES PROVIDED FOR THE CERTIFICATION OF SMALL BUSINESS CONCERNS WITH RESPECT TO COMPETENCY AS TO CAPACITY AND CREDIT. IT IS ARGUED THAT SINCE THE CONGRESSIONAL COMMITTEES CONSIDERING S. 2250 (ENACTED AS PUBLIC LAW 603) DISCUSSED THE POSSIBILITY OF AMENDING THE BILL TO INCLUDE SPECIFICALLY MANAGERIAL ABILITY WITHIN THE MEANING OF THE TERM "COMPETENCY, AS TO CAPACITY AND CREDIT," THE FAILURE OF THE CONGRESS TO SO AMEND S. 2250 EVIDENCED AN INTENT TO EXCLUDE MANAGERIAL ABILITY FROM THE CERTIFICATION AUTHORITY. WE CANNOT AGREE THAT THE TESTIMONY QUOTED IN THE DEPARTMENT'S ANALYSIS OF OUR JUNE 24 DECISION FROM THE HOUSE HEARINGS ON S. 2250 ON APRIL 27, 1942, IN SUPPORT OF THE ABOVE POSITION, NECESSARILY EVIDENCES A LEGISLATIVE INTENT TO EXCLUDE FROM THE CERTIFICATE OF COMPETENCY COVERAGE OF THE ELEMENT OF RESPONSIBILITY REFLECTING UPON THE BIDDER'S MANAGERIAL ABILITY. RATHER, WE UNDERSTAND THE GOVERNING RULE OF STATUTORY CONSTRUCTION TO BE TO THE CONTRARY. THE RULE OF LAW ANNOUNCED IN SITUATIONS WHEREIN AMENDMENTS ARE SUGGESTED OR OFFERED DURING THE COURSE OF LEGISLATIVE CONSIDERATION OF A BILL BUT NOT INCORPORATED INTO THE STATUTE AS ENACTED IS THAT SUCH SUGGESTED AMENDMENTS CANNOT BE CONSIDERED IN DETERMINING THE LEGISLATIVE INTENT. SEE 82 C.J.S. STATUTES, SECTION 355; 50 AM. JUR. STATUTES, SECTION 330. WE BELIEVE THAT THIS RULE IS PARTICULARLY APPLICABLE HERE WHERE MERELY INQUIRIES AS TO POSSIBLE AMENDMENT WERE DIRECTED TO WITNESSES WHO INTERPRETED "CAPACITY" IN ITS BROAD, LIBERAL SENSE. THE DEPARTMENT'S ANALYSIS OF OUR JUNE 24 DECISION CONTAINS SELECTED QUOTATIONS FROM THE HOUSE HEARINGS ON S. 2250 WHICH TEND TO DEMONSTRATE THAT A DOUBT EXISTED AS TO THE SCOPE OF THE TERM "CAPACITY AND CREDIT." HOWEVER, OTHER PERTINENT PORTIONS OF THOSE HEARINGS WERE OMITTED. WE BELIEVE THAT A CAREFUL READING OF ALL THE TESTIMONY APPEARING ON PAGES 36 THROUGH 38, 54, 85 AND 86 OF THE HEARINGS ON S. 2250 COMPELS THE CONCLUSION THAT THE LEGISLATIVE INTENT WAS TO GIVE A BROAD, LIBERAL MEANING TO THE TERM "CAPACITY AND CREDIT." IN CONSIDERING S. 2250, THE CONGRESS WAS CONCERNED OVER THE FAILURE OF GOVERNMENT PROCUREMENT AGENCIES TO UTILIZE THE TOTAL RESOURCES OF SMALL BUSINESS, INCLUDING ITS PLANT, MACHINERY, MANAGERIAL ABILITY, AND SKILLED LABOR. SEE SENATE REPORT 479, PART 2, 77TH CONGRESS, 2D SESSION. PARTICULARLY, THE CHAIRMAN, WAR PRODUCTION BOARD, WHO WAS CHARGED WITH THE RESPONSIBILITY OF MOBILIZING THE CAPABILITIES OF SMALL BUSINESS CONCERNS FOR THE WAR EFFORT, STATED ON PAGE 54 OF THE HOUSE HEARINGS ON S. 2250 AS FOLLOWS:

"*** I DO NOT CONCEIVE IT OUR JOB IN THE WAR PRODUCTION BOARD TO GIVE BUSINESS TO EVERY SMALL BUSINESS IN THE COUNTRY; I CONCEIVE IT IS MY JOB TO GIVE BUSINESS ONLY TO THOSE WHO HAVE THE MANAGERIAL SKILL, THE ENERGY, AND THE WILL TO CARRY OUT THE CONTRACT AND TO COMPLETE AND FILL IT ON TIME, ***."

THE SAME OFFICIAL TESTIFIED ON PAGES 56 AND 57 OF THOSE HEARINGS TO THE FOLLOWING EFFECT:

"NOW, AS I CONCEIVE IT, THE SMALL BUSINESS INTENDED TO BE AIDED BY THIS BILL IS THAT BUSINESS WHICH HAS THE MANAGERIAL TALENT, THE AMBITION, ENERGY, AND KNOW-HOW, BUT HAS NOT THE ENGINEERING FACILITIES, HAS NOT THE AIDS TO GET INTO THIS PROGRAM THAT MANY OF THE LARGER CONCERNS HAVE WHO HAVE RESEARCH LABORATORIES, ENGINEERING ORGANIZATIONS, PRODUCTION LABORATORIES OF ALL KINDS AND ARE, THEREFORE, MORE HIGHLY SKILLED IN THE ART OF MAKING NEW THINGS."

IN VIEW OF THE LEGISLATIVE BACKGROUND OF PUBLIC LAW 603, AND IN THE ABSENCE OF ANY INFERENCE THAT THE CONGRESS DID INTEND TO LIMIT DRASTICALLY THE SCOPE OF THE CERTIFICATION AUTHORITY, WE CANNOT AGREE THAT ELEMENTS OF RESPONSIBILITY SUCH AS MANAGERIAL ABILITY WERE DELIBERATELY EXCLUDED FROM THE COVERAGE OF THE CERTIFICATION.

THE UNINTERRUPTED CONTINUANCE OF THIS CERTIFICATION AUTHORITY BY THE CONGRESS WITHOUT MATERIAL CHANGE THROUGH SUCCESSIVE STATUTES CULMINATING IN PUBLIC LAW 85-536 CERTAINLY EVIDENCED A CLEAR INTENT TO LIMIT SOMEWHAT THE WIDE DISCRETIONARY AUTHORITY OF CONTRACTING OFFICERS TO DETERMINE ALL ELEMENTS OF RESPONSIBILITY OF SMALL BUSINESS CONCERNS COMPETING FOR GOVERNMENT CONTRACTS.

THE CONTENTION THAT NO GREAT WEIGHT SHOULD BE GIVEN TO THE STATEMENT OF REPRESENTATIVE PATMAN IN THE CONGRESSIONAL RECORD OF JULY 30, 1951, SINCE IT COULD NOT REFLECT THE UNDERSTANDING OR WILL OF THE CONGRESS, OVERLOOKS THE FACT THAT REPRESENTATIVE PATMAN WAS NOT ONLY A CO-SPONSOR OF S. 2250 WHICH WAS ENACTED AS PUBLIC LAW 603 ABOUT NINE YEARS PREVIOUS TO THIS STATEMENT, BUT ALSO THAT HE WAS CHAIRMAN OF THE SENATE SPECIAL COMMITTEE TO STUDY PROBLEMS OF AMERICAN SMALL BUSINESS. IT WAS THAT SPECIAL COMMITTEE WHICH DRAFTED S. 2250, AND ACTIVELY SUPPORTED THE BILL THROUGHOUT THE LEGISLATIVE PROCESS. IN 2 SUTHERLAND, STATUTORY CONSTRUCTION, 3RD ED., SECTION 5009, THE FOLLOWING PERTINENT RULE OF CONSTRUCTION IS STATED:

"STATEMENTS OF THE DRAFTSMAN OF THE PROPOSED BILL AS TO HIS UNDERSTANDING OF ITS NATURE AND EFFECT MADE AT COMMITTEE HEARINGS HAVE BEEN ACCEPTED IN THE FEDERAL COURTS AS INDICATIVE OF THE LEGISLATIVE INTENT. AS TO THOSE PORTIONS OF THE PROPOSED BILL UNCHANGED BY THE COMMITTEE OR THE LEGISLATURE, IT IS REASONABLE TO ASSUME THAT THE COMMITTEE, AND THUS THE LEGISLATURE, ADOPTED THE VIEW OF THE DRAFTSMAN."

FOR APPLICATION OF THAT RULE SEE DAVIES WAREHOUSE CO. V. BOWLES, 321 U. S. 144. WE THEREFORE REMAIN OF THE VIEW THAT REPRESENTATIVE PATMAN'S STATEMENT REPRESENTS AN EXPRESSION OF THE CONGRESSIONAL INTENT CONCERNING THE CERTIFICATION AUTHORITY. HOWEVER, WE DO NOT FEEL THAT THE STATEMENTS MADE ON MAY 25, 1959, DURING THE COURSE OF HEARINGS HELD BEFORE THE SUBCOMMITTEE ON MILITARY OPERATIONS OF THE HOUSE COMMITTEE ON GOVERNMENT OPERATIONS CONSTITUTE EXPRESSIONS OF LEGISLATIVE INTENT AS TO THE TERM "CAPACITY AND CREDIT." WE BELIEVE THAT SUCH STATEMENTS REPRESENT INDEPENDENT OPINIONS AS TO THE SCOPE OF CERTIFICATES OF COMPETENCY IN RELATION TO THE RESPONSIBILITY OF THE PROCUREMENT AGENCY. IT IS NOTED ALSO THAT THE ONLY REFERENCE MADE TO THE EXTENT OF COVERAGE OF THE CERTIFICATE WAS VOLUNTEERED BY A WITNESS TESTIFYING ON BEHALF OF THE PROCUREMENT AGENCY.

CONCERNING THE DEFINITION OF THE WORD "CAPACITY" AS USED IN SECTION 8(B)(7) OF PUBLIC LAW 85-536, IT IS ARGUED THAT "CAPACITY" IS NOT SYNONYMOUS WITH THE WORD "ABILITY" WHICH HAS A BROADER MEANING THAN "CAPACITY," AND THAT IF THE CONGRESS INTENDED TO HAVE THE CERTIFICATE OF COMPETENCY INCLUDE THE ELEMENTS OF RESPONSIBILITY DISCUSSED IN OUR JUNE 24 DECISION, THE CONGRESS WOULD HAVE USED THE WORD "ABILITY" RATHER THAN "CAPACITY." WE AGREE THAT THE CORRECT CONSTRUCTION OF LEGISLATIVE LANGUAGE MAY NOT ALWAYS BE REACHED BY A TOO DOGMATIC ADHERENCE TO LEXICOGRAPHICAL DEFINITION. RATHER, THE STATUTORY CONSTRUCTION OF KEY OR PRINCIPAL WORDS WHICH ARE NOT SUSCEPTIBLE OF EXACT DEFINITION MUST BE DETERMINED BY CONSIDERING THE OBJECTIVE OF THE LEGISLATION AND THE EVILS TO BE CORRECTED. SEE 111 ALR 1137; 50 AM. JUR., STATUTES, 260. IN VIEW OF THE CLEAR LEGISLATIVE INTENT TO ASCRIBE A MOST COMPREHENSIVE MEANING TO THE WORD "CAPACITY," SUCH WORD MUST BE CONSTRUED AS SYNONYMOUS WITH "ABILITY" TO EFFECTUATE THE LEGISLATIVE INTENT IN ENACTING THE CERTIFICATION AUTHORITY.

NOTWITHSTANDING THE DIVISION OF PROCUREMENT RESPONSIBILITY WHICH RESULTS FROM THE EXERCISE OF THE CERTIFICATION AUTHORITY BY THE SBA AND WHICH IS REPORTED TO RESULT IN A LACK OF CONTROL OF MILITARY PROCUREMENT TO THE DETRIMENT OF THE DEFENSE EFFORT, WE HAVE NO ALTERNATIVE TO HOLD OTHERWISE UNDER THE STATUTE AS NOW WRITTEN. WE ARE SURE THAT YOU WILL AGREE THAT OUR DECISION IN THE MATTER MUST OF NECESSITY BE BASED UPON THE LEGAL CONSIDERATIONS INVOLVED AND NOT UPON THE ADMINISTRATIVE DIFFICULTIES INVOLVED IN COMPLYING WITH THE TERMS OF THE STATUTE. WE BELIEVE, RATHER, IT IS THE RESPONSIBILITY OF THE PROCUREMENT AGENCIES TO PRESENT THE ENTIRE MATTER TO THE CONGRESS FOR ITS CONSIDERATION AS TO WHETHER REMEDIAL LEGISLATION IS REQUIRED IN THE LIGHT OF ALL THE CIRCUMSTANCES.

ACCORDINGLY, THE DECISION OF JUNE 24, 1959, IS AFFIRMED.