B-189832, SEPTEMBER 12, 1977

B-189832, SEPTEMBER 12, 1977

1. DETERMINATION TO SET ASIDE PROCUREMENT UNDER SECTION 8(A) OF SMALL BUSINESS ACT IS MATTER FOR CONTRACTING AGENCY AND SBA, AND IS NOT SUBJECT TO REVIEW BY GAO IN ABSENCE OF SHOWING OF FRAUD OR BAD FAITH ON PART OF GOVERNMENT OFFICIALS. 2. IN PROTEST INVOLVING "8(A)" PROCUREMENT, FRAUD OR BAD FAITH IS NOT SHOWN MERELY BY ALLEGATION THAT SBA IS VIOLATING ITS STANDARD OPERATING PROCEDURE, WHICH MAY BE WAIVED. EVEN IF ALLEGATION IS TRUE AND SBA IS THEREFORE REQUIRED TO PROPERLY WAIVE PROCEDURE, MANNER IN WHICH WAIVER IS EFFECTED IS FOR SBA, NOT GAO, TO DECIDE.

A.R. & S. ENTERPRISES, INC.:

A.R. & S. ENTERPRISES, INC. (A.R.&S.), PROTESTS THE DECISION OF THE NAVAL SUPPLY CENTER, CHARLESTON, SOUTH CAROLINA, TO CANCEL INVITATION FOR BIDS (IFB) NO. N00612-77-B-0076 (A SMALL BUSINESS SET-ASIDE FOR MESS ATTENDANT SERVICES IN BUILDING 352, NAVAL TRAINING CENTER, ORLANDO, FLORIDA) PURSUANT TO THE REQUEST OF THE SMALL BUSINESS ADMINISTRATION TO SET THE PROCUREMENT ASIDE FOR THE "8(A)" PROGRAM. A.R.&S. ALLEGES THAT THE CANCELLATION AND PROPOSED "8(A)" SET-ASIDE VIOLATE A PROVISION CONTAINED IN A DOCUMENT ENTITLED "SMALL BUSINESS ADMINISTRATION STANDARD OPERATING PROCEDURE, SUBJECT: SECTION 8(A) PROGRAM." THE PROVISION-- CHAPTER 2, PARA. 7(B)(2)-- STIPULATES THAT "8(A)" CONTRACTING OPPORTUNITIES WILL NOT BE ACCEPTED WHERE A "PUBLIC SOLICITATION HAS ALREADY BEEN ISSUED UNDER A SMALL BUSINESS SET ASIDE * * * IN THE FORM OF AN IFB * * * . "

A.R.&S. FURTHER ARGUES:

"IT IS CLEAR THAT THE SBA HAS VIOLATED ITS OWN INTERNAL REGULATIONS; AND, ABSENT A SPECIFIC WAIVER BY THE ADMINISTRATOR OF THE SBA IN THIS INSTANCE, AR&S CONTENDS THAT SUCH ACTION CANNOT BE TAKEN. THE SBA'S ACTIONS IN THIS REGARD SEEM PARTICULARLY QUESTIONABLE WHEN VIEWED IN LIGHT OF THE CURRENT CONGRESSIONAL HEARINGS RELATING TO ABUSES OF THE 8(A) PROGRAM AND RECENT STATEMENTS BY THE ADMINISTRATOR OF THE SBA IN WHICH HE HAS PROMISED TO INVESTIGATE AND THOROUGHLY ELIMINATE QUESTIONABLE 8(A) PRACTICES."

IN MARITIME MAINTENANCE & LABOR SUPPLIERS, INC., B-189352, JULY 13, 1977, WE RECENTLY STATED:

"OUR OFFICE NO LONGER REVIEWS DECISIONS TO SET ASIDE PROCUREMENTS UNDER THE 8(A) PROGRAM IN VIEW OF THE BROAD DISCRETION ACCORDED THE SBA UNDER THE SMALL BUSINESS ACT (15 U.S.C. 637(A)(1970)) TO ENTER INTO CONTRACTS WITH PROCURING AGENCIES FOR THE PURPOSE OF LETTING SUBCONTRACTS TO 8(A) FIRMS. SEE AUTOMATION INFORMATION DATA SYSTEMS, INC., B-185055, JUNE 15, 1976, 76-1 CPD 377; JETS SERVICES, INC., B-186066, MAY 4, 1976, 76-1 CPD 300. PURSUANT TO THAT DECISION, WE WILL NOT REVIEW PROTESTS AGAINST 8(A) SET-ASIDES UNLESS THE PROTESTER SHOWS FRAUD ON THE PART OF GOVERNMENT OFFICIALS OR SUCH WILLFUL DISREGARD OF THE FACTS BY GOVERNMENT OFFICIALS AS TO NECESSARILY IMPLY BAD FAITH. WHETHER OR NOT THE PROCUREMENT SHOULD BE SET ASIDE UNDER SECTION 8(A) IS A MATTER FOR THE CONTRACTING AGENCY AND THE SBA TO DECIDE."

FRAUD OR BAD FAITH IN THE MAKING OF THE SET-ASIDE IS NOT SHOWN BY THE ALLEGATION THAT SBA IS VIOLATING ITS STANDARD OPERATING PROCEDURE, WHICH MAY BE WAIVED. CF. KINGS POINT MANUFACTURING COMPANY, INC., B-181221, APRIL 29, 1975, 75-1 CPD 264. EVEN IF THE ALLEGATION IS TRUE AND SBA IS THEREFORE REQUIRED TO PROPERLY WAIVE THE PROCEDURE, THE MANNER IN WHICH THE WAIVER OF THE PROCEDURE IS EFFECTED IS FOR SBA, NOT GAO, TO DECIDE. CONSEQUENTLY, WE CANNOT QUESTION THE CANCELLATION OF THE IFB.

PROTEST DISMISSED.