B-149139, OCT. 18, 1962

B-149139, OCT. 18, 1962

TO J. H. EMERSON COMPANY:

THIS REFERS TO YOUR LETTER OF AUGUST 10, 1962, REQUESTING A RECONSIDERATION OF OUR DECISION OF JULY 30, 1962, RELEVANT TO THE AWARD OF A CONTRACT MADE BY THE DEPARTMENT OF THE NAVY UNDER INVITATION FOR BIDS NO. 600-1238-62-S.

THE SUBJECT INVITATION WAS ISSUED ON MAY 10, 1962, WITH A TOTAL SET ASIDE FOR SMALL BUSINESS, FOR UNDERWATER BREATHING APPARATUS. BID OPENING WAS HELD ON MAY 22, 1962, AND OF THREE BIDS RECEIVED YOUR BID WAS HIGHEST AS TO PRICE, AT $278,946. THE AWARD WAS MADE ON JUNE 8, 1962, TO THE SECOND LOW BIDDER, SCOTT AVIATION CORPORATION, AT A BID OF $271,674. THE LOW BIDDER, GENERAL TECHTRONICS CORPORATION ($224,866) IS REPORTED TO BE NONRESPONSIVE BECAUSE IT TOOK EXCEPTION TO THE DELIVERY TERMS OF THE INVITATION.

YOUR FIRST STATED OBJECTION TO THE AWARD ARISES FROM THE FACT THAT A PRIOR INVITATION (IFB NO. 600-743-62-S) HAD BEEN ISSUED ON FEBRUARY 20, 1962, FOR THE SAME REQUIREMENT. BIDS WERE OPENED ON THAT INVITATION ON MARCH 19, 1962, AND SCOTT AVIATION, GENERAL TECHTRONICS, AS WELL AS YOUR FIRM, HAD SUBMITTED BIDS. THESE BIDS WERE EVALUATED AS FOLLOWS:

TABLE

GENERAL TECHTRONICS $234,936

J. H. EMERSON 302,706

SCOTT AVIATION 318,276

THE INVITATION, AS MODIFIED, CALLED FOR DELIVERIES OF SOME OF THE PRODUCTION UNITS WITH FINAL TECHNICAL MANUALS ON AUGUST 1, 1962, WHILE PRELIMINARY SERVICE MANUALS WERE REQUIRED FOR APPROVAL 120 DAYS AFTER DATE OF CONTRACT. THE CONTRACTING OFFICER NOTED THAT BEFORE AWARD COULD HAVE BEEN MADE A TIME CONSUMING SURVEY MUST FIRST HAVE BEEN CONDUCTED. CONCLUDED THAT BY THE TIME AWARD COULD BE MADE THE INVITATION DELIVERY SCHEDULES WOULD BE IMPOSSIBLE TO PERFORM BY A RESPONSIBLE BIDDER. AS A RESULT THE CONTRACTING AUTHORITY CANCELLED THE INVITATION, AND READVERTISED THE PROCUREMENT UNDER REVISED DELIVERY SCHEDULES.

WE CONCLUDED IN OUR PRIOR DECISION THAT THE FIRST INVITATION WAS CLEARLY DEFECTIVE IN THAT THE DELIVERY SCHEDULES WERE NOT SUSCEPTIBLE OF TIMELY PERFORMANCE. ACCORDINGLY, UNDER THE PROVISIONS OF 10 U.S.C. 2305 (C), AS IMPLEMENTED BY ASPR 2-401.1, THE CONTRACTING AUTHORITY HAD AMPLE AUTHORITY TO REJECT ALL BIDS AND READVERTISE IN THE PUBLIC INTEREST.

YOU STATE THAT YOUR FIRM, AND TO THE BEST OF YOUR KNOWLEDGE THE OTHER TWO FIRMS, WERE PREPARED TO ACCEPT THE REQUIRED DELIVERY. THUS YOU CONTEND, THAT WHILE THE DELIVERY SCHEDULES WERE INCONVENIENT, IT SHOULD HAVE BEEN ASSUMED THAT THE BIDDERS WERE ABLE TO COMPLY. THE CANCELLATION, YOU SAY, WAS A VIOLATION OF ASPR 2-401.1, WHICH STATES THAT AWARDS MUST BE MADE AFTER THE BID OPENING UNLESS THERE IS A COMPELLING REASON TO REJECT ALL BIDS AND CANCEL THE INVITATION.

WE DO NOT AGREE WITH YOUR CONTENTION. YOUR WILLINGNESS TO ACCEPT THE DELIVERY TERMS DID NOT NECESSARILY SHOW THAT THE TERMS WERE POSSIBLE OF PERFORMANCE. THE ADMINISTRATIVE DETERMINATION OF IMPOSSIBILITY WAS BASED PRIMARILY UPON THE NAVY DEPARTMENT'S INABILITY TO DO WHAT WAS NECESSARY ON ITS PART TO ENABLE THE CONTRACTOR TO PERFORM ON SCHEDULE, AND AS TO THIS WE MUST ACCEPT THE DEPARTMENT'S CONCLUSION.

WITH REGARD TO THE AWARD MADE UNDER THE SECOND INVITATION, YOU ALLEGE THAT THE SUCCESSFUL BIDDER'S SELF-CERTIFICATION THAT IT WAS SMALL BUSINESS CANNOT BE CONSIDERED TO HAVE BEEN MADE IN GOOD FAITH. THE BID OPENING ON THE READVERTISEMENT WAS HELD ON MAY 22, 1962, AND AN AWARD WAS MADE TO SCOTT AVIATION CORPORATION ON JUNE 8, 1962. IT APPEARS THAT THE SBA NOTIFIED AN OFFICIAL OF THE SCOTT AVIATION CORPORATION, BY LETTER DATED JUNE 1, 1962, THAT THE FIRM DID NOT QUALIFY AS SMALL BUSINESS, SINCE IT AVERAGED 662 EMPLOYEES, FOR THE PRECEDING FOUR QUARTERS. SCOTT HAD CERTIFIED ITSELF AS A LABOR SURPLUS AREA CONCERN EMPLOYING NOT MORE THAN 625 EMPLOYEES. YOU DID NOT CHALLENGE THE SIZE STATUS OF SCOTT UNTIL JUNE 15, 1962, AFTER THE AWARD HAD BEEN MADE. ON THESE FACTS WE CONCLUDED IN OUR PRIOR DECISION AS FOLLOWS:

"* * * CLEARLY, ON THE DATE INVITATION NO. 600-1238-62'S WAS OPENED (MAY 22, 1962) SCOTT'S SELF-CERTIFICATION MUST BE CONSIDERED AS HAVING BEEN MADE IN GOOD FAITH, AND IT IS ENTIRELY PROBABLE THAT SUCH GOOD FAITH CARRIED OVER TO THE DATE OF AWARD IN THE ABSENCE OF ANY EVIDENCE THAT SCOTT COULD HAVE TAKEN SOME TIMELY, POSITIVE STEPS TO CORRECT ITS SIZE STATUS CERTIFICATION. WE KNOW OF NO AFFIRMATIVE REQUIREMENT IN THE ASPR OR IN THE SBA REGULATIONS RESPECTING SIZE STATUS DETERMINATIONS THAT A SELF-CERTIFIED BIDDER MUST UNILATERALLY APPRISE THE CONTRACTING OFFICER OF A CHANGE IN HIS SIZE STATUS DETERMINED AFTER BID OPENING. IN THE CASE HERE, SCOTT WAS ENTITLED TO HAVE THE JUNE 1 SIZE STATUS DETERMINATION RECONSIDERED BY THE DIRECTOR, OFFICE OF SMALL BUSINESS SIZE STANDARDS, SBA, UNDER 13 C.F.R. 121.3-4 (D), OR BY THE SIZE APPEALS BOARD, SBA, UNDER 13 C.F.R. 121.3-6. WE THUS BELIEVE THAT THE JUNE 1 SIZE STATUS DETERMINATION WAS NOT OF SUCH FINALITY AS WOULD AFFECT THE BONA FIDES OF SCOTT'S SELF-CERTIFICATION AT THE DATE OF AWARD.

"IN VIEW THEREOF, WE CANNOT CONCLUDE THAT SCOTT WAS LACKING IN GOOD FAITH WHEN IT CERTIFIED ITSELF AS A SMALL BUSINESS CONCERN BASED UPON ITS BEING LOCATED IN A SUBSTANTIAL LABOR SURPLUS AREA, THAT IS, A FIRM EMPLOYING NOT OVER 625 EMPLOYEES. * * *"

YOU CONTEND THAT SCOTT MUST OR SHOULD HAVE KNOWN OF ITS TRUE SIZE WHEN IT CERTIFIED ITSELF AS SMALL BUSINESS, SINCE IT DID NOT APPEAL THE SBA DETERMINATION, AND IN FACT, ACCEPTED ITS TRUE STATUS WHEN IT SHORTLY SUBMITTED A PROPOSAL UNDER P.R. 622A-21640 (S). FURTHER, IT NEVER MADE ANY ATTEMPT TO NOTIFY THE CONTRACTING OFFICER AFTER IT RECEIVED THE JUNE 1 LETTER FROM SBA. YOU CONCLUDE THAT THE AWARD TO SCOTT SHOULD BE CANCELLED.

WE CONSIDERED THESE MATTERS IN OUR PREVIOUS DECISION AND WE DID NOT FIND THAT SCOTT CERTIFIED ITSELF AS SMALL BUSINESS IN BAD FAITH. IN ANY EVENT, THE CONTRACT WAS AWARDED BY THE GOVERNMENT UPON THE BIDDER'S STATEMENT THAT IT WAS A SMALL BUSINESS CONCERN. YOU DID NOT PROTEST SCOTT'S CERTIFICATION UNTIL AFTER THE AWARD. ASSUMING THAT THE CERTIFICATION WAS MADE IN BAD FAITH, THE GOVERNMENT'S ACCEPTANCE OF IT WAS NOT, AND WE SEE NO WAY IN WHICH THE WRONG TO OTHER BIDDERS WHICH RESULTED COULD BE CORRECTED WITHOUT PENALIZING THE GOVERNMENT UNDULY BY PREVENTING ITS TIMELY OBTAINING THE SUPPLIES FOR WHICH IT HAD AN IMMEDIATE NEED. THESE CIRCUMSTANCES THE GOVERNMENT IS NOT REQUIRED, NOR WOULD WE DEEM IT IN THE PUBLIC INTEREST, TO UPSET THE AWARD AT THIS TIME. B-145948, SEPTEMBER 21, 1961, COPY ENCLOSED.