B-193212, NOVEMBER 9, 1978
Highlights
DIGEST: DETERMINATION TO SET ASIDE PROCUREMENT UNDER SECTION 8(A) OF SMALL BUSINESS ACT IS MATTER FOR CONTRACTING AGENCY AND SMALL BUSINESS ADMINISTRATION AND WILL NOT BE REVIEWED BY GAO IN ABSENCE OF SHOWING OF FRAUD OR BAD FAITH ON PART OF GOVERNMENT OFFICIALS. DELPHI CONTENDS THAT THE SETTING ASIDE OF THIS REQUIREMENT FOR MINORITY BUSINESSES IS IMPROPER SINCE IT WILL RESULT IN EXCESSIVE COSTS TO THE GOVERNMENT. THE CONTRACTING OFFICER OF SUCH AGENCY IS AUTHORIZED "IN HIS DISCRETION" TO LET THE CONTRACT TO THE SBA "UPON SUCH TERMS AND CONDITIONS" AS MAY BE AGREED UPON BETWEEN THE SBA AND THE PROCURING AGENCY. 53 COMP.GEN. 143 (1973). WE HAVE RECOGNIZED THAT THE DETERMINATION TO INITIATE A SET-ASIDE UNDER SECTION 8(A) AND TO DISPENSE WITH COMPETITION IS A MATTER FOR THE CONTRACTING AGENCY AND THE SBA TO DECIDE.
B-193212, NOVEMBER 9, 1978
DIGEST: DETERMINATION TO SET ASIDE PROCUREMENT UNDER SECTION 8(A) OF SMALL BUSINESS ACT IS MATTER FOR CONTRACTING AGENCY AND SMALL BUSINESS ADMINISTRATION AND WILL NOT BE REVIEWED BY GAO IN ABSENCE OF SHOWING OF FRAUD OR BAD FAITH ON PART OF GOVERNMENT OFFICIALS.
DELPHI INDUSTRIES INC.:
DELPHI INDUSTRIES INC. (DELPHI) PROTESTS THE PROPOSED NONCOMPETITIVE AWARD OF A CONTRACT FOR REUSABLE METAL CONTAINERS BY THE DEPARTMENT OF THE AIR FORCE (SOLICITATION NO. F08635-78-R-0308) UNDER SECTION 8(A) OF THE SMALL BUSINESS ACT, 15 U.S.C. 637(A)(1) (1976). DELPHI CONTENDS THAT THE SETTING ASIDE OF THIS REQUIREMENT FOR MINORITY BUSINESSES IS IMPROPER SINCE IT WILL RESULT IN EXCESSIVE COSTS TO THE GOVERNMENT, AS WELL AS CAUSE A MAJOR ECONOMIC HARDSHIP TO DELPHI.
SECTION 8(A) OF THE SMALL BUSINESS ACT AUTHORIZES THE SMALL BUSINESS ADMINISTRATION (SBA) TO ENTER INTO CONTRACTS WITH ANY GOVERNMENT AGENCY HAVING PROCUREMENT POWERS. THE CONTRACTING OFFICER OF SUCH AGENCY IS AUTHORIZED "IN HIS DISCRETION" TO LET THE CONTRACT TO THE SBA "UPON SUCH TERMS AND CONDITIONS" AS MAY BE AGREED UPON BETWEEN THE SBA AND THE PROCURING AGENCY. 53 COMP.GEN. 143 (1973). THEREFORE, WE HAVE RECOGNIZED THAT THE DETERMINATION TO INITIATE A SET-ASIDE UNDER SECTION 8(A) AND TO DISPENSE WITH COMPETITION IS A MATTER FOR THE CONTRACTING AGENCY AND THE SBA TO DECIDE. DATA CONTROLS/NORTH, INC., B-192342, JULY 21, 1978, 78-2 CPD 62. IN VIEW OF THE BROAD DISCRETION VESTED IN THE CONTRACTING OFFICER, WE DO NOT REVIEW DETERMINATIONS TO SET ASIDE A PROCUREMENT UNDER SECTION 8(A) UNLESS THE PROTESTER SHOWS FRAUD ON THE PART OF GOVERNMENT OFFICIALS OR SUCH WILLFUL DISREGARD OF THE FACTS AS TO NECESSARILY IMPLY BAD FAITH. DATA CONTROLS/NORTH, INC., SUPRA; POLI COM, INC., B-190030, MARCH 16, 1978, 78-1 CPD 211; CHEMICAL TECHNOLOGY, INC., B-190165, JANUARY 18, 1978, 78-1 CPD 46; A.R. & S. ENTERPRISES, INC., B-189832, SEPTEMBER 12, 1977, 77-2 CPD 186. NO SUCH SHOWING HAS BEEN MADE HERE.
WE POINT OUT THAT THE SECTION 8(A) PROGRAM IS DESIGNED TO ENCOURAGE THE FOSTERING AND PROMOTION OF MINORITY BUSINESS ENTERPRISES AND HAS BEEN UPHELD BY THE COURTS. RAY BAILLIE TRASH HAULING, INC. V. KLEPPE, 477 F.2D 696 (5TH CIR. 1973). THE FACT THAT THE PROGRAM OPERATES TO THE MONETARY DETRIMENT OF A PARTICULAR NONMINORITY FIRM DOES NOT AFFECT THE VALIDITY OF THE PROGRAM OR OF A SPECIFIC SET-ASIDE. SEE CHEMICAL TECHNOLOGY, INC., SUPRA.
THE PROTEST IS DISMISSED.